The sales of retail loans fell 60% at BCR, the largest bank in the system, in the last quarter of last year compared with the third, due to the harsher regulations set by the NBR, as well as to the interest rate raises operated by banks.
Compared with the peak in August, sales of retail loans were six times lower in December, reaching 32 million euros, according to the data presented by Sorin Mititelu, head of the Retail Business and Product Development Department of BCR.
Sales of unsecured loans accounted for the bulk of the total sales, about 70%. Sales of mortgage-backed loans plunged in December, reaching almost 9 million euros, 15 times less than in the summer.
"The shift from the promotional to variable interest rate as a factor of calculating indebtedness and the increase in the cost of loans led to a decline in value, as well as in the number of eligible clients, especially on the mortgage loan segment," Sorin Mititelu explained. He says that November, December and January were very slow in terms of lending, but believes the market will gradually rebound.
NBR last week decided to loosen the regulations on lending to individuals that had come into force last October. Although bankers had warned as soon as the summer that introducing much harsher lending criteria could freeze the real estate market, given that they overlapped with the shortage of cash worldwide, NBR saw its plan through, waiting three months before a revision of the market trend.
Latest data reveal that consumer loans shrank in November compared with the previous month, if leaving out the effect of the depreciation of the exchange rate for the volume of financing in foreign currency. The mortgage loans witnessed a very slight increase, so that the annual growth pace slowed down to 50%, from 90% in the spring.
Meanwhile, NBR officials explained that the lending slowdown was due to the bankers' reluctance in granting loans as a result of the financial turmoil rather than to administrative barriers.
A Government Ordinance came into force at the beginning of this year that requires banks to calculate costs of loans for individual clients in a transparent manner, using independent indicators, as well as to announce any changes in advance.
BCR yesterday presented a new offer of retail loans with interests tied to the EURIBOR for euros and ROBOR for RON. The bank also offers the option of taking out loans in euros with a fixed interest rate for the entire repayment period, while interests on RON loans may remain fixed for no more than five years.
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