Loading ...Romanians took banks by storm in September, pushing up the loan balance to its highest level in 2008, to 400 million euros, double month-on-month, Business Standard daily reads on November 6.
Bucharest inhabitants applied for more than 40% of total housing loans – worth 5.13 billion euros, followed by inhabitants of the northwestern city of Cluj-Napoca (Romania’s center).
Bucharest inhabitants applied for more than 40% of total housing loans – worth 5.13 billion euros, followed by inhabitants of the northwestern city of Cluj-Napoca (Romania’s center).
“Fear of the new regulations led clients to apply for more loans in September. October growth is not going to be so spectacular,” according to a statement by Radu Gratian Ghetea, President of the Romanian Bank Association (ARB).
The month-on-month growth rate for housing loans was 8% in September, double August’s monthly growth. The increase was 64% compared to September 2007. This comes amid a deadlock on the real estate market, due to high housing prices and the decision of potential buyers to stand by and wait for prices to drop. For the first time in several years, housing loans declined by 2% in July.
A considerable jump was also seen on consumer loans, the value of bank loans in September alone being of 994 million euros, under conditions in which the consumption credits balance amounts at 19.4 billion euros.
Romanians’ fear of the rules imposed by Romania’s National Bank (BNR), entered into force in October and reducing the indebtedness degree by 15-20%, has lead to a considerable advance of the mortgage loans and consumption ones in September, but bankers look pessimistic at the evolution in October.
Romanians’ fear of the rules imposed by Romania’s National Bank (BNR), entered into force in October and reducing the indebtedness degree by 15-20%, has lead to a considerable advance of the mortgage loans and consumption ones in September, but bankers look pessimistic at the evolution in October.
Mortgage loans are long-term ones, the majority being taken in euros. Housing loans account for a pretty low share in the total of credits taken by the population, Romania presenting an atypical situation compared to the European developed countries, but the consumption credits have in many situation as final destination also the purchase or construction of housing units.
Romanians’ mortgage loans totalled in August five billion euros, a surge of 63% compared to August 2007, under conditions in which the mortgage loan advanced on average by 67% in the past years.
Housing loans contraction, of 2% in July, the first in one year and a half, produced on the backdrop of lower prices on the real estate market and of higher financing costs, seemed to be the start of a tempered growth on this segment, but in August Romanians took mortgage loans at a more alert pace. September confirmed Romanians’ haste to contract credits prior to the enactment of BNR restrictions. Although BNR rules impact will become visible just in Q4 of the year.
In September, the annual crediting advance stood at 50.05%. Moreover, some bankers put a stop to credits in euros and in Swiss franks or severely restricted loan giving, under conditions of turmoil on the international financial market.
Failure to repay the loans both by companies and population accounts for 1.1% of the total loans given in Romania, of 52.27 billion euros, namely 577 million euros.
Failure to repay the loans both by companies and population accounts for 1.1% of the total loans given in Romania, of 52.27 billion euros, namely 577 million euros.
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