Real estate market standstill had no impact on banks

The recent decline in transactions on the residential market did not impact on local lenders' mortgages sales, bankers say. However, insecurity related to the real estate market, caused by the international financial turmoil, and more expensive financing led to a 2 percent decline in loans granted for residential acquisitions in July.

Meanwhile, the price of old apartments prices decreased by more than 10 percent in the first half of 2008.

"The current situation on the Real estate market did not have a negative impact on [Banca Comerciala Romana, the country's largest lender] BCR sales on the real estate loans segment, due to our promotion campaign between May and August," said the head of BCR'a retail services division, Sorin Mititelu.

Other bankers also denied a negative impact on their business. "In August, the bank's loan portfolio increased by €110-120 million. We plan to grow as planned but probably the National Bank regulations will impact on lending," said the President of Volksbank, the fourth-largest lender locally, Gerald Schreiner. 

Romania's National Bank (BNR) is to enforce new regulations as of October, aimed to curb lending and to lower risks for both banks and their clients.

Business Standard