Banks still pessimistic about lending demand recovery

Publish date: 22-08-2010
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Romanian banks are pessimistic about the recovery of lending demand by companies or population, after the second quarter of this year saw more restrictive crediting conditions, except for mortgage loans, according to a survey conducted by the National Bank of Romania (BNR).

"At an aggregate level, lending terms (for companies) were tighter in Q2/2010. The measures taken during this interval were however less restrictive than in Q1/2010. Against the background of deteriorating loan portfolios' quality, the banks (a net percentage of about 25 pc) increased the bonuses for riskier loans, so they can adjust more easily to potential losses," finds the BNR survey, quoted by Mediafax. Lending demand for the acquisition of lands and dwellings was still negative in the second quarter, contrary to optimistic forecasts previously unveiled by banks.

This was a result of consumers losing confidence in the general evolution of the economy and in future incomes. "On short term, banks do not foresee a recovery of real estate crediting. Housing prices continued to adjust in Q2/2010, two years after the beginning of this trend. The net percentage of banks that reported this evolution is 60 pc, higher than in Q1/2010. The corrections of the real estate market are expected to continue in Q3 as well," reads the survey. An approximate 17 pc of banks lowered their crediting costs other than interests, after keeping them at pre-crisis levels for six quarters in a row. In a different move, consumer crediting demand in Q2 held steady, at levels similar to Q1, contrary to the optimism expressed by half of the banks.

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