The banking system will continue to operate at a loss this yeargiven the rising volume of bad loans and legislative changes, andthe 2011 direction will depend on economic revival, the "FirstHome" scheme going on, but also on the way Ordinance 50 regardingretail loans is applied, believes Lucian Anghel, thechief-economist of BCR, the biggest domestic bank in terms ofassets.
"(...) Once the economy is starting to pick up, lending may alsopick up. They are correlated. A lending increase of around 30-50%translates into GDP growth, which, further on, leads to jobcreation, consumption and even revenues going back to the statebudget on medium term," Anghel explained in an interview withZF.
Banking system losses climbed by 240.5m RON in the third quarterand reached 474m RON (110m euros) in late September. The increasecame amid the around 40% higher volume of provisions against thestart of the year, with "loss" loans in August coming to accountfor around 16% in total funding granted by banks.
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