Lending to companies to resume no earlier than year-end, Raiffeisen official deems

The first positive signals of a revival in lending to companies will be seen no earlier than the end of the year, declared for NewsIn Marinel Burduja, first vice president of Raiffeisen Bank Romania, responsible for the lender's corporate division.

However, there are some necessary premises in the economy, like cheaper credit and adequate monetary policies.

"We need measures to stimulate agriculture and to attract structural funds," he added.
Burduja stressed that, in the current market conditions, companies should use their resources more efficiently.

The Raiffeisen Bank official also thinks that outside solutions for Romania's economy will be limited.

"It is important to understand that solutions will only come in a limited percentage from the International Monetary Fund (IMF) and European Union (EU) funds. This loan does not solve the economic growth problem in the Romanian system, but only softens the effects of the crisis and represents premises for necessary solutions," Burduja explained.

Raiffeisen Bank Romania estimates it will maintain the credit portfolio for companies at the same level reported at the end of 2008, as the volume of loans on the corporate segment was similar to the amount at the end of March last year. 

Loans granted by Raiffeisen to companies reached 1.155 billion euros at the end of 2008.

Externalized loans amounted to 2 billion euros on both corporate and retail segments. Burduja does not rule out the possibility that a part of these loans will return to Romania, but says this is a normal practice.

Lending became a burden for companies in the country after costs rose and banks got reticent in granting out money. The reason behind the reticence is the central bank's new set of crediting norms intended to reduce risks. However, when these new rules entered into force in October last year, the first buds of the economic crisis showed in Romania, plaguing liquidities with banks.

Romania borrowed 20 million euros from the IMF and other international lenders and plans to use it to restart engines behind the economy and help resume lending to support companies.

NewsIn