Banks will not stop granting mortgage loans in Romania and when the restrictions imposed by the National Bank of Romania (BNR) are lifted, mortgage crediting could recover, Chief Economist Lucian Anghel of Banca Comerciala Romana (BCR) Lucian Anghel said on November 17.
“I do not believe the banking system will stop granting mortgage loans in Romania. It is possible that the BNR’s tough loan application requirements will be lifted in the next month and we will witness a rise in the volume of mortgage crediting,” said Anghel in relation to the chances of individuals taking out loans.
He said the demand for mortgage loans from individuals has decreased, but added that the market for mortgage loans will advance to more than 8 billion euros, including the value of mortgagesecured personal loans.
“In the Czech Republic, a country with 10 million inhabitants, the volume of mortgage loans is 13.76 billion euros and 10.7 billion euros in Hungary. I do not think Romania could slip further than now,” said Anghel.
“In the Czech Republic, a country with 10 million inhabitants, the volume of mortgage loans is 13.76 billion euros and 10.7 billion euros in Hungary. I do not think Romania could slip further than now,” said Anghel.
Capital Market Manager with ING Bank Romania Florin Ilie says many of the loans extended by banks are long-term loans that carry a high risk of refinancing.
“Mortgage loans are granted for up to 30 years. Banks do not print money; they take it from a place and pass it on in loans. The banks have taken less money form local savings and more from external sources, and most often for short and medium terms.
“Mortgage loans are granted for up to 30 years. Banks do not print money; they take it from a place and pass it on in loans. The banks have taken less money form local savings and more from external sources, and most often for short and medium terms.
This poses a huge interest risk, because if the money is gone you will have to refinance at higher interest rates,” said Ilie.
Banking analysts attended on November 17 a conversation on the impact on Romania of the global financial crisis, organised by the Romanian Association of Financial and Banking Analysts.
Banking analysts attended on November 17 a conversation on the impact on Romania of the global financial crisis, organised by the Romanian Association of Financial and Banking Analysts.
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