“It all depends on how the economy evolves in 2010. If we consider IMF [International Monetary Fund] forecasts, which put forward about a 0.5 percent increase in gross domestic product, the need for loans should not be significantly higher. On the retail segment, I do not believe that lending will boost consumption, due to accumulated arrears and limited eligibility. It is the mortgage segment that could register growth. The First Home program bolstered loans for the acquisition of homes, but on the whole I do not believe there will be spectacular differences compared to 2009, except perhaps some stabilization,” said the official.
Regarding interest rates on lei-denominated loans, the Piraeus representative said that these are high, but that this is normal when there is pressure on the exchange rate, which must be balanced by the interest rate on lei.
“From this point of view, this is leverage that helps with the stability of the exchange rate. On the euro loans segment, we must look at the cost of resources. And from this point of view, the country risk is not helping us, especially since the Romanian banking system has more loans than deposits. So we are clearly financing the loans here with resources from abroad. When you do this, you pay a price, which is related to the Credit Default Swap, at three percent. Hence, a three percent margin above Euribor should be applied to all euro loans,” added Parvu.
The official said that the evolution of lei-denominated loan demand in 2010 will depend on how clients perceive the currency risk. “In 2009, the currency risk was compensated by the decline in the Euribor rates. Next year, if there is a depreciation, the interest rate will no longer be an outlet, because the Euribor is at an all-time low. I believe that 2010 will bring a higher potential risk for those with foreign currency loans,” indicated Parvu.
