Sharp decline of the interests on ROL loans: BRD-Groupe Societe Generale, the second leading bank in the system, has announced an up to seven percent cut in the rates for the credits granted to its individual customers.
The bank has only cut the rate for those credits that are taken out with fixed interest, currently at 15%, for now. The products with variable interest rate have not seen any changes made.
"Due to the rate cuts operated by the National Bank we cut our interest rates on loans, too. At the moment we are closely looking at what happens on the market and are cautious about reducing interests on deposits. We have the power to not react to NBR''s signals right away and wait and see the market trend first," Sorin Popa, BRD-SocGen''s deputy chief executive told Ziarul Financiar.
The bank''s move is part of the trend started by Banca Comerciala Romana, ABN Amro and Banca Tiriac last month. The three operated substantial rate cuts for the credits granted, as those rates had been lagging far behind those for deposits.
The commercial banks are finding themselves forced to cut interests on the loans to their clients in order to stimulate a faster lending growth, given that they have excess cash they can no longer invest for profits.
The move is vital given that the NBR and the Finance Ministry have cut their interests for the money attracted from the market down to 7-8%.
The placements with the two institutions used to be the main option of the commercial banks to invest their cash. Now that the yields of such investments went down, the banks are seeing their profit margins threatened. The only operations they have left are cutting the costs for the amounts attracted and finding other placement options. The interests paid on deposits attracted have already dropped to levels that risk discouraging savings.
Even if the gap between the interests charged for credits and those paid for deposits does go down, as the loans become cheaper, it will still remain higher than the yield offered by the placements with the NBR or the Finance Ministry.
This is one aspect the central bank is taking into account, which thus hopes to push for a faster decline in the interests for ROL loans, in order to contain migration to borrowing in foreign currency.
This is why NBR''s Board of Directors last week decided to narrow the spread between its monetary policy interest and the actual rate at which it attracts cash from the market. A reduction of the monetary policy rate to 12.5% was therefore decided.
"The existence of a margin to manoeuvre in terms of the central bank''s interest rate policy, as well as of the risks associated with the current spread between the rates on the domestic market and those on the international market, given the deregulation of the capital transactions, allows cutting the monetary policy interest, and its convergence with the rate validated by the market is to occur gradually, as the disinflation process and economic policy mix attain the goals set," a NBR release shows.
liviu.chiru@zf.ro
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