The first month of autumn saw the banks somewhat busierpromoting retail loans, but bankers say that the market is stillfar from the ebullience of the past years.
What is hindering lending? On the one hand, clients are stillreluctant to take loans, as they were this spring, but bankers inturn say that they are much more careful and even avoid the word"relaxation".
"We've been talking about the fresh start on the retail lendingmarket since February or March. Demand is much lower than it usedto be. The number of loan applications is increasing, though moreslowly than last year," says Sorin Mititelu, director of businessand retail product development with BCR, the biggest bank in thesystem.
With interests of 7% to 9% on mortgage loans in euros and ofover 20% for consumer financing in RON, banks clearly show thatthey are seeing a much higher risk in granting retail loans, whichlowers the number of clients actually qualifying for a loan.
Still, there have been signs of rising interest among banks ingranting loans over the last two weeks. Millennium Bank started acampaign to promote mortgage loans, which echoes a similar campaignconducted by CEC Bank. The Turks at Garanti Bank have their ownpromotional offer, giving clients that take a loan until the end ofthe month the option to choose three months when they do not haveto pay their instalments. The Greeks at Piraeus have cut theinterests of the Happy End personal loans by up to 2.75%, but evenso, the interest rate in the first part of the contract is stillover 20% per annum. At the same time, the Italians at UniCredit arepromoting consumer loans, which are sold through a newly set upconsumer finance division.
"Every bank wants lending to rebound. Everyone wants to grantloans, just not do so under any circumstances, we cannot go back tothe relaxation we had a year and a half ago," comments GabrielCretu, sales manager of OTP Bank, a medium-sized player.
If they do not sell loans, banks do not collect (applicationreview and granting) fees, which used to be an important revenuestream. In addition, after having fought to attract deposits in thefirst half, banks are now seeing they have no option to investtheir cash in.
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