It is riskier to believe that the crisis is over when itactually is not than to expect it to last longer when it actuallyends, believes Steven van Groningen Raiffeisen Bank chairman.
"Many are pinning their hopes on the third quarter, but if theyare not confirmed, the first quarter of 2010 will be completelydifferent. I am not convinced we are seeing all the effects of thecrisis and we can say 'the worst is behind us', and in case thecrisis continues, it would not be out of the question to seeconsolidation deals on various markets, including the bankingsector, where there is a capacity that needs to be reduced."
After all, the financing of acquisitions could be the maindestination of some applications for new loans in the corporatesector, because no investments are being made in new productionfacilities or real estate, either, any more.
"It is obvious that transactions, opportunities forconsolidation are being sought on the market. The crisis, however,was not harsh enough or long enough to force such moves. Many havesurvived until now on lower sales, on cost cutting and only iftheir business reaches the absolute minimum and they lose all hopewill they be ready to sell," Van Groningen says.
As for the coming months, he says one cannot overlook thepolitical situation: "Efforts will be made in the fourth quarter toavoid problems, but the big question is what will happen in thefirst quarter of next year
Raiffeisen's boss believes that the main lesson of the crisis,especially as far as banks and their clients are concerned, is thatit is not wise to take on debt to the maximum by trying to managerisks that at some point become unmanageable.
"Banks in Romania should no longer rely on refinancing fromabroad and it is important for us to be more balanced in terms ofthe loan/deposit ratio; the lesson for companies is that it is bestnot to do business with too much borrowed money. The adjustmentprocess has now begun, but it will take a while. We cannot justsay, <it's over, it's done>."
On the other hand, the banker admits that with the risingunemployment and with hardly any profit made by companies, bankshave little sources left to attract deposits from.
Van Groningen does not believe the share of the non-performingloans in the system is alarming.
"It should be taken into account that most clients pay theirinstalments on time, even if they have to make an effort for it,contrary to the impression that this might leave. We have two typesof bad payers: those who want to pay, but can no longer do it forobjective reasons and it is in our best interest to help them withsolutions, and those who can, but will not, and prefer to blame iton the crisis. The latter (category i.e.) is a phenomenon we arestill trying to figure out."
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