Crediting will be relaunched in the autumn, if the economic growth rate will maintain, said Radu Gratian Ghetea, president of the Romanian Banking Association (ARB)
and of CEC Bank.
Bankers, who believe that there will be no crediting without economic growth, must reach a solution jointly with those outside the banking system, as no economic growth will exist as long as crediting does not function, said Adrian Vasilescu, aide to the governor of BNR, in a banking conference. He believes that a return in time is needed, but with the means, instruments and thinking of the present, to the moment when crediting was healthy, before the “crediting craze.” He remembered that in 2008, when crisis began, he spoke at a meeting of wine producers, sent by the governor, explaining the origins of the crisis: “they poured water in the money and started the financial torrent.” “The problem for the future is how not to pour water in the money, how we make healthy money. Before money were being made from nothing, often through derivatives, there was a time when healthy money was made,” Vasilescu mentioned.
The BNR advisor considers that the banking system needs quality and that everything must go from the idea of quality and of adjusting the banking system in order to reach quality. Plus, banks must sign with their customers contracts that leave no room for abusive clauses.
In a separate move, Radu Gratian Ghetea, president of the Romanian Banking Association and of CEC Bank appreciated that crediting will be relaunched this autumn, if the economic growth rate maintains after this period, too. “Interesting signs appear, Romania succeeds in staying on the rise. I believe that, if we further remain on the increase, there will immediately appear an increase of the appetite for crediting, much expected by everybody, also by banks. Even us (banks) wait for crediting to begin. People say <<why don’t you start?>> We do not start because we expect someone else to begin and someone else apparently started, this being the economy, which started to grow,” Ghetea said in the conference. He added that there are sources and expertise for crediting, and foreign banks are still interested by this market, while local institutions took their role seriously.
Ghetea mentioned that banks preponderantly finance local companies, but multinationals too started to ask about the conditions set by banks for loans.
Banks no longer pay for their past mistakes, but of economy as a whole
Oana Petrescu, a Deloitte partner, who attended the conference, said the banks no longer pay for their past mistakes, such as giving out loans on basis of ID card only, which came to a halt in 2008, but of economy as a whole « There has been a great deal of talk about ID card-based, consumerist exuberance, so on and so forth/ ID loans came to a stop in 2008, in 2010 banks had provisioned or sold 80 pc of the ID loans. This means the summing-up, profit impact happened in 2009 – 2010. Those loans, no longer are in the banks’ summing-up reports, bad loans. The performing loans continue generating profits, though lower since they are fewer,” Petrescu said.
The Deloitte partner also referred to the mistakes made by the companies that borrowed at overvalued collaterals, which were paid during 2010 -2012, when the banks constituted provisions. “The thing is the system has adjusted, stabilized itself already and is facing Romania’s real potential for economic growth. Now, the system has enough capital, enough financing resources, unfortunately, the projects are not there to generate yields higher than that level of interest ,” Petrescu said, who added that, until economy gets a boost, banks would be unable to go further, given they still have significant provisions from the past.