Loading ...“We are willing to continue to invest in Romania and I don’t know why others would think differently,” says Eli Leenaars, a member of ING’s Executive Board, who coordinates the group’s retail operations in the Netherlands, Belgium, South-West Europe, Poland and India. ING official says that an investor will “withdraw its money from a market confronted with problems.
But this year’s economic growth in Romania, expected to stand at 9%, would therefore act as a “buffer” in case of a slowdown under external pressure.
“Liquidity constraints are not as strongly felt in Central and Eastern Europe. As far as we are concerned, the most important risk facing Romania is how the economy’s overheating is corrected. The risk of a hard landing is still there, but it is precisely the financing constraints and the higher premium risks which could contribute to a more gradual slowdown of the economy,” says the ING official, quoted by Ziarul financiar daily.
The credit growth rate already showed the first signs of slowing down in July, while banks are in tight competition to attract deposits, given that financing from shareholders is harder to access and more expensive.
The National Bank of Romania (BNR) started strengthening its monetary policy as early as last autumn, precisely in order to slow down the extremely fast expansion of lending, which was fuelling higher consumption in comparison with the economy’s ability to produce.
In case of a potential hard landing of the economy, which would also show in an abrupt exchange rate correction, Leenaars believes the private sector would be hard-hit, especially for clients who took out loans in foreign currencies, even though they earn their incomes in RON. Foreign currency credit accounts for more than half of total financing granted by the banks and it is the engine of the fast growth lately.
Leenaars noted that Romania has passed through rapid changes in the past years, but the process must continue. “It must further act in order to improve efficiency, reduce corruption and develop infrastructure”, said ING official. As for ING position on the domestic market, Leenaars says that the group remains open as for some eventual acquisitions.
As well, Leenaars anticipates a “significant” slowdown in retail lending starting with October, when the new BNR regulations will be enacted. “Tight monetary conditions will have a strong impact upon demand in the period to come and an ever-increasing number of people will probably prefer to save than to contract a credit”, underlined Leenaars. In this context, ING is to focus mainly on the development of trading services offered through the Internet-banking platform.
Loading ...
Comentează acest articol