Isarescu, BNR: Banks’ profitability improved in last five months

“I believe banks have a very important role in changing mentality regarding the re-launching of credit’, Adrian Vasilescu, adviser to the Governor of the National Bank of Romania, said.

Inflation has followed an uneven descending trend, most volatility coming from non-core components, BNR Governor Mugur Isarescu said at a meeting with Romanian Banks Association (ARB) bankers, according to ‘We hope to return to the target-interval in the second half of 2013. Economic growth will decelerate thanks to industry, especially the export-oriented (automotive) one. Public debt is still a lot below the Maastricht criterion. Financial intermediation is back to 2008 levels, with genuinely negative rates of annual growth of credit stock to companies and population’, the central bank head also noted. Isarescu added that we have a notable decrease of consumer credit denominated in foreign currencies and the peak of the rate of bad loans is about to be reached. ‘The banking system continues to be liquid and well capitalised. Banks’ profitability has significantly improved in the last months’.
Also, banks should restructure their staff, however not by laying-off people but by making certain departments, such as risk assessment, stronger and pay psychologists and sociologists in order to help them prepare for re-launching credit, Adrian Vasilescu, adviser to the Governor of the National Bank of Romania, said during a seminar on credit subjects. Among many other things, the BNR governor’s adviser stressed the population has a moral right to access bank loans, but very few people now meet eligibility criteria once ‘the beautiful brides have got marries’. He also pointed out that 3.5 M people with a  right to take credit had already used that right and took loans, and now banks are looking ‘everywhere’ for people who are becoming eligible.
An important aspect Adrian Vasilescu emphasised the ‘prospecting’ currently happening, as the real economy is waiting for re-launch based on credit and banks, in their turn, are waiting to re-launch credit after the economy re-launches itself. ‘If this mentality continues, we will wait a long time before lending begins again in Romania. I believe banks have a very important role in changing mentality regarding the re-launching of credit’, Vasilescu also said. At the end of May, 2013, non-government loans granted by credit institutions added 0.8 percent (0.5 percent in real terms), from April 2013, to RON 221.658.8 million lei, announced the BNR. In connection with the credit to economy, the central bank official also brought up the idea of re-industrialising Romania launched by Economy Minister Varujan Vosganian, noting he did not believe Romania had completely ceased to be an industrial country.
At the seminar, Claudiu Cercel, BRD-Groupe Society Generale Deputy CEO, also noted that Romania cannot afford too much fiscal room for massive public investment and the only solution is has is to become friendlier to the markets, Mediafax informs. As far as the European funds are concerned, Cercel says they are directed to an economy that has a certain structure and that ‘they are pointlessly attracted’ as long as they do not drive a multiplication effect in the economy. The President of the National Credit Guarantee Fund for SMEs (FNGCIMM), Aurel Saramet, in turn noted that SMEs should change their business models – something even more important than for banks – as companies in that category are an absolute necessity in any economy, however now benefiting from few instruments with the role of helping them.

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