Banca Transilvania will start to grant loans under its new regulations by mid next month, after recently receiving approval from the NBR.
"The indebtedness level will increase from 45% to 70% depending on the income and risk profile of the customer. We will apply the 70% cap to the loans secured with a mortgage and also to consumer loans," Gabriela Nistor, retail manager with Banca Transilvania told ZF.
The maximum indebtedness level will only be available to clients whose household income stands at more than 2,000 euros. Additionally, the bank is also preparing to report positive information to the Credit Bureau, which is one of NBR's requirements to approve a maximum indebtedness level of 70%. Otherwise, indebtedness is capped at 65% of the eligible income of a client.
By applying its own regulations, BT cuts the down payment required for real estate/mortgage loans from 25% to 15%. The bank will also provide the entire financing for real estate investments, but will do so only if certain conditions are met, depending on the client profile. The differentiation in this case will no longer be conducted by using the clients' incomes as a criterion.
To calculate the eligible incomes, BT will deduct a subsistence basket from the client's incomes. The value of the basket will be 245 RON per person, in the case of a family with up to three members. For families with more than three members it will take into account additional expenses of 150 RON per person.
"We tried not to discriminate against clients with low incomes. They should be able to borrow at least as much money under the new regulations as they did under the old ones," Nistor says. The bank has calculated that clients whose incomes are equal to the average wage (some 1,000 RON) will be able to borrow up to 20% more.
"In case of clients with large incomes, the indebtedness capacity increases significantly, so that they could receive up to 80% higher amounts," BT's head of retail explains.
BT is the sixth bank in the system to have been granted the NBR's approval for its own regulations after Alpha Bank, BRD-SocGen, BCR, Volksbank and ATE Bank. Another lender, ING Bank, which operates as a subsidiary of ING Bank Amsterdam, has recently announced the modification of its lending regulations. However, It does not require the NBR's approval, because the monetary authority of the Netherlands directly supervises the bank.
The seven banks on the market can therefore offer "relaxed" loans. The Greeks at ATE Bank, a small player on the Romanian market, are also getting ready to launch their products, after receiving the NBR's approval around two weeks ago.
All seven banks also announced they would also grant real estate loans with no down payment, although this is seen more as a niche product, because of the greater risks involved for the bank.
BT will also charge more for its no down payment loans, although the bank prefers to wait for prices on the real estate market to stabilise.
BT
Is the sixth bank to have received NBR's approval to sell loans under its own regulations
Set the indebtedness cap at 45% - 70%
Will offer the 70% cap only to clients whose household incomes exceed 2,000 euros
Will report positive information to the Credit Bureau
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