Loading ...Romanian bankers admit it is virtually impossible for the local lenders to grant large companies loans higher than 100 million euros, as they are difficult to finance foreign currency credits, the Business Standard reads on December 4.
Moreover, some of the top five banks, in terms of assets, whose corporate activity was thriving until recently, have frozen lending large amounts to the companies.
It is difficult to finance any major loan because of funds lack. There are still ongoing negotiations, but the chances of striking a deal are less than 50%,” Bucharest-based ING Bank NV Equity Markets head Florin Ilie told the Business Standard.
Moreover, some of the top five banks, in terms of assets, whose corporate activity was thriving until recently, have frozen lending large amounts to the companies.
It is difficult to finance any major loan because of funds lack. There are still ongoing negotiations, but the chances of striking a deal are less than 50%,” Bucharest-based ING Bank NV Equity Markets head Florin Ilie told the Business Standard.
The freeze is due to a long-term lack of funds, as parent banks, which used to provided 90% of the funds for Romanian lenders, until recently, have turned off the tap. Large and longterm foreign currency loans were most affected by the decision. “All large transactions on the market are on stand-by. We are in the situation that we have no relation to the market. We cannot assume any responsibility until Romania has a new Government. Banks are no longer financing their Romanian subsidiaries due to the international crisis,” said top management source of one of the first five players in the banking system, the Business Standard reads on.
Bankers hope the current situation affecting lenders improves in 2009, although there are companies on the market, such as Complexul Energetic Turceni and Hidroelectrica, which are waiting to sign loan agreements, even at higher costs. Financing for Romania has become much more difficult, after the rating agencies downgraded Romania twice, even if the parent bank grants the funds on a short-term.
Moreover, lenders are paying closer attention to loan collaterals. The alternative is attracting local resources, but the foreign currency situation cannot be replaced by local foreign currency deposits, the Business Standard concludes.
Moreover, lenders are paying closer attention to loan collaterals. The alternative is attracting local resources, but the foreign currency situation cannot be replaced by local foreign currency deposits, the Business Standard concludes.
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