Banca Transilvania, a top ten bank, has cut interest on RON deposits by 0.25%, thus coming close to 10% a year, and Robert Rekkers, its chief executive says that loans will see gradual adjustments, too.
"We will operate step by step adjustments of both RON and foreign currency loans, but in line with the market. We have not raised the interests too much in the first six months of the year, unlike other banks; we were more responsible and did not go to over 20%. We are now cutting where there's room to," Robert Rekkers told ZF.
The bank adjusted the prime rate by 0.5% last week, which is taken into account for those retail loans whose cost is not tied to the interbank money market index ROBOR. As for real estate loans, the bank continues the promotional offer, which entails an interest rate set at the ROBOR level (zero margin), but the cost of this loan increases as a result of various fees. Such a loan comes with a 10.29% standard interest per annum, compared with 13% per annum, the standard level.
Although having taken several steps to cut the interest on RON deposits, Banca Transilvania remains in the higher end of the market, with most major players offering one-digit rates. The same goes for euro deposits, where BT's interests remain in the 4% a year range, while competitors have gone down towards 3% a year. Since it is not backed by an international financial group, BT largely depends on the funds raised from clients, so that it has traditionally maintained a more aggressive price policy.
Robert Rekkers believes that maintaining two-digit interests on RON deposits is an important factor for boosting savings.
"To me, seeing two-digit rates is an important threshold. We can pay good interests to our clients for the time being, but we will see, if the trend continues, we will rally both in terms of deposits and loans," Rekkers comments. Interests started to go down fast in early summer, when the National Bank started eyeing very carefully the interest level on the interbank market and the political environment put pressure on bankers to make funding cheaper. In June, interests on RON deposits were still standing at 13-14% a year.
Individuals' deposits have posted a significant increase since the beginning of the year, by 3 billion RON (up 3.3%), reaching 93.1 billion RON (22.1 billion euros) in June. Smaller banks, like OTP, even reached their full-year deposit target as early as this summer.
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