The rate on underperforming loans on the retail segment became stable, below 20 pc, but the situation of loans to companies will remain grim and no amelioration will be reported before the economy starts to recover, the CEO of Banca Comerciala Romana (BCR), Dominic Bruynseels, stated, quoted by Mediafax.
“I am confident that, once the economy starts to recover in the next 12 months, loans will rise, leading to a reduction in the underperforming loans’ rate,” Bruynseels argued. He further stated that the rate of underperforming retail loans was stabilised, at 19.3 pc. “The rate of underperforming loans will continue to rise on the corporate segment. We are expecting a gradual recovery of the market, but only once economic growth begins to pick up steam, which will have a positive effect on the cash flow,” the head of BCR added.
As regards loans, Bruynseels estimated the balance would rise, this year, by “an average to high” figure. Nonetheless, he underlined that the granting of a loan depended on a client’s history. “I admit that it is difficult, for young people in particular, to get a loan. (…) This will remain a problem. We will work hard on packages for students and for first-time employees and you will be seeing some improvement as regards overall loans in the next 12 months, but don’t expect us to stand on a street corner and start handing out money to young people,” the CEO of BCR added.
On the other hand, Bruynseels argued that those who make deposits should place more confidence in the banks, as these are well-protected. “I would say that the banking sector is fitted not with just one airbag, but with two or three. For cautious drivers, I believe BCR offers at least one extra airbag,” Bruynseels claimed. When asked what amount BCR had placed in last week’s foreign currency bond-emission, Bruynseels replied the amount invested was EUR 225 M, out of which EUR 25 M came from deposits. At the same time, the bank official stated that BCR targeted the third position on the market based on products, accessibility, the price and quality of services. Nonetheless, Bruynseels expects that RON interests will remain relatively steady in the next six months, unless changes appear in the evolution of other states.