Romanian banks expect expansion of credit market

Romanian banks expect expansion of credit market


By Daniel Stroe – Bucharest

Over 80 per cent of the banks in Romania expect an intensification of crediting in the next period, while half of them say draft laws on consumers’ protection and the manner in which these initiatives are promoted affect their image or the trust in bank loans, shows the results of a banking barometer issued today.

In retail, over 65 per cent of the banks expect an increase of the consumption credit demand and a bigger proportion, 75 %, expect an advance as concerns the demand for credit cards. At the same time, about 70 per cent of the banks expect a rise in credit demand for companies, read the conclusions of the barometer issued by Ernst&Young and the Romanian Banks Association.

The text also concludes crediting policies will partially relax for economic sectors such as industry, agriculture, telecom, health and the small and medium enterprises.

On the other hand, over 85 per cent of the banks in Romania warn the legal framework on insolvency discourage the crediting activity. “The recent changes in the Insolvency Code improve the legal framework, but we believe there’s more to be done in applying the law to convince banks that things have changed and they can, consequently, relax their crediting policies. Maintaining financial discipline is a primary condition for keeping the banking system stability” Radu Ghetea, head of the Romanian banks Association, is quoted in the report.

Also, over 80 per cent of the banks expect a stagnation of expenses concerning credit risk provisions or even their decrease (35 %) while 75 per cent of the respondents anticipate an improvement of their financial results. At the same time, 71 % of the banks expect an average consolidation of their activity and only 14 per cent see a large consolidation. Finally, 70 per cent of the banks say layoffs are over, while 20 % say they even expect an increase of their personnel.

The banking barometer will be issued twice a year as an instrument of information for bankers and the public concerning the manner in which leaders in the country’s banking sector see the evolution of the economic, legislative and business environment and the implications on the banks they manage.