Romania's BCR assigns 60% less credits in Q4 owing to central bank's lending rules

The volume of credits alloted by the country's largest lender by assets Banca Comerciala Romana (BCR) fell about 60 percent in the last quarter last year after the central bank BNR introduced new lending rules, said one of BCR's directors, Sorin Mititelu.

Mititelu mentioned interests for credits in lei and euro rose by 2-7 percentage points in the fourth quarter of last year and loans in Swiss francs were removed from the bank's portfolio as these posed the most risks.

However, BCR said it witnessed a monthly advance of credits in euro three-fold higher compared to its competitors.

Several banks on the local market saw slowdown in lending starting October 2008 following the crediting rules, but BNR's representatives deem the problem is the lack of financing of the Romanian lenders.

One of the central bank's directors, Nicolae Cinteza, said at the end of November last year lending was confined by problems with resources, not by the lowering of the maximum degree of indebtedness imposed through the crediting rules.

The set of rules approved by the central lender required banks to carefully analyze the clients' payback capacity taking into account a level of incomes seen as eligible by customers, which cannot exceed more than 20 percent the previous year's level. BNR decided last week to amend the norms and differentiate between consumer and mortgage loans in prudentiality and allow a higher degree of indebtedness of the latter.

Banks are now allowed to negotiate with their clients the level of indebtedness at each mortgage loans considering both the customers' payback capacity and their own financial resources.

BCR plans to increase people's degree of indebtedness for mortgage loans to 70 percent of their incomes, Mititelu also said. 

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