Nongovernmental lending could witness a slight slowdown this year, after the population's demand for long-term loans dropped in Q1.
However, potential growth comes from infrastructure loans and from the segment of structural fund co-financing, says Sergiu Oprescu, an executive vice-president at Alpha Bank Romania, which ranks sixth in the system in terms of assets.
"Last year we forecast a 40% market growth rate, but we expect a slowdown, and the level to reach 30%," Oprescu told ZF in an interview.
The slowdown will come amid a lower demand for retail financing. Oprescu says that in the first quarter high-value home equity loans grew less than expected, while consumer loans climbed above expectations.
"This may be the outcome of delayed loan-contracting decisions, amid high exchange rate volatility in the second half of 2007," considers Oprescu. He believes one can speak of a more cautious approach on the part of customers.
Alpha Bank saw sales of mortgage loans slow down by as much as 40% in some cities amid seasonal variations and customers' reluctance to take out loans after the RON's strong decline last autumn.
On the other hand, Oprescu says that after the slowdown posted in the first months of this year, home equity loans registered faster growth in the first half of April, so that it remains to be seen how the market goes for the rest of the year. Oprescu expects the exchange rate to stabilise at 3.6-3.9 RON per euro, which would bring about a rebound in confidence.
On the other hand, he believes the market is going to shift from lending to savings this year. After last summer's international market turmoil drove up external financing costs, Romanian bankers are now finding out that it is cheaper for them to raise funds from the domestic market.
NBR governor Mugur Isarescu has recently warned bankers it is high time they were more cautious about drawing RON resources as the system's liquidity surplus is rapidly shrinking.
However, Sergiu Oprescu notes population savings had a very weak trend in the first quarter.
"This probably explains why most banks have started to heavily promote savings products".
Alpha Bank head says he will try to stand out through the promoted savings products. Oprescu maintains his plans related to income growth, though he says targets are "ambitious".
The bank will further expand its territorial network as scheduled and is set to open another 75 branches, a figure that will go beyond 200 locations at the end of 2008.
Alternative distribution channels will also be developed in parallel, after Alpha sealed partnerships with over 120 credit brokers nationwide.
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