Raiffeisen Bank, the third-largest player in the system, wants to remove the mandatory requirement from its own lending guidelines for a client to come up with a down payment in the case of high value real estate transactions.
Customers with a long history with the bank could get access to real estate funding without depositing any payment whatsoever.
Raiffeisen sent its own lending norms for individuals to NBR for approval in mid-April, but as yet has not received an answer.
"We have no expectations on the overall trend of indicators such as indebtedness or the down payment levels; we want a specialised approach instead," explains Razvan Munteanu, the vice-president of the bank in charge of retail operations.
The Raiffeisen norms, as sent to the NBR, would facilitate access to loans for certain categories of customers, while at the same time being restrictive where others are concerned, Munteanu said.
Other banks, including Alpha Bank, Volksbank and Banca Transilvania announced they were considering removing the mandatory requirement of a down payment for certain categories of customers, as well as an increase in the indebtedness level. So far, none of the banks have received an approval from the central bank in order to start lending on their own terms.
At the beginning of March, the NBR published new regulations on lending to individuals, which eliminated the old regulations regarding the maximum indebtedness level and the requirement for a down payment in the case of real estate funding. A relatively low number of banks have submitted their proposed norms to the NBR. The monetary authority has continually delayed giving an answer, and has requested additional information and even documents to be redrafted, to make sure the relaxed conditions will not threaten the quality of the loan portfolios.
The Austrians at Raiffeisen are also battling to expand their territorial presence, having opened more than 30 branches in the first quarter of the year. The bank currently operates 308 branches, a number that is expected to exceed 370 by the end of the year.
"We are trying to balance our desired market share with the number of branches," stated Steven van Groningen, chairman and chief executive of Raiffeisen Bank. He pointed out that the bank had a larger share of the market, in terms of assets, at the moment than the share its branches held on the total domestic market.
Additionally, alternative distribution channels are expected to develop over the coming years, and their contribution to the business development should increase.
Raiffeisen is currently using a call-centre platform, Internet-banking and mobile banking as alternative channels, especially for long distance transactions.
The bank also introduced the concept of "mobile bankers" last year, which are bank employees who travel to various locations, as indicated by the customer, in order to sell products. Razvan Munteanu, the bank's VP of retail operations, says the number of agents has reached 500 and they contribute to the sale of credit cards and personal loans generating about a third of new business for the bank.
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