"An upward trend for interests on RON loans can be expected, however it won't happen because of inflation-related reasons, but because of the extremely high demand as more and more people are thinking of borrowing in RON, after seeing that the euro did not drop further from its summer level," says Robert Rekkers, general manager of Banca Transilvania, the fifth largest lender on the market.
There have been a rising number of signals on the market about imminent price increases both for euro loans, which were influenced by the developments on the foreign markets, and for RON loans. However, most analysts anticipate the NBR will keep the monetary policy rate unchanged.
The euro lending is already beginning to feel the effects of a double price rise, both because of the international reference rates taken into account by many local banks, especially for mortgage loans, and because of the depreciation of the RON, mainly experienced by those who took out loans during the summer, driven by the euphoria induced by a spectacularly weak euro, as well as by the introduction of relaxed lending norms by the first banks, which allowed for an indebtedness cap of up to 70%.
Rekkers says that in Banca Transilvania's case, the introduction of the bank's own lending norms for individual customers early in August led to a doubling in the volume of all types of loans sold.
"It's just crazy, we're barely coping with it," Rekkers says.
Gabriela Nistor, the bank's retail manager, explains the number of credit applications has almost tripled. She says the details of the lending norms were discussed with the NBR so as to allow customers with low incomes to get at least as much as they did when the old standard regulations were in place for the entire market.
Rekkers adds that at the end of August, the volume of retail loans granted by Banca Transilvania amounted to 2.8 billion RON, with the target for the end of the year set at 3.4 billion RON, or around 1 billion euros.
The volume of retail loans in the total credits stands at around 40%. As far as assets are concerned, the bank aims to reach a level of 3.5 billion euros. "It's a goal we can achieve, even though the euro has increased lately," states Rekkers. He adds the bank is always trying to make sure that the balance of deposits stays at least 10-15% higher than loans, in order to allow the bank some room to manoeuvre. Rekkers also says that Banca Transilvania is currently in talks with several banks, including institutions such as EBRD and DEG to get funding in euros. "The international situation is not helping us to close a large transaction, so it won't be a large amount."
Latest NBR Board decisions:
To keep unchanged the monetary policy rate at 7.0 percent per annum;
To pursue a firm control of liquidity via open-market operations, seeking to enhance the signalling role of the monetary policy rate and reduce the volatility of interbank money market rates;
To leave unchanged the existing minimum reserve requirement ratios on both RON- and foreign currency-denominated liabilities of credit institutions.
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