Banks have arrears worth €1.5 bln for advertising

“The promotion campaigns of financial institutions tried to shift the focus from an acute money problem to motivation and finality of personal investments, appealing to the fundamental needs of safety and wellbeing, on the one hand, and proposing a way of reaching a new status, on the other hand,” psychologist Alexandru Iordan told Business Standard. “My advice is: forget about the money. There are other things to consider when you’re thinking about buying a house...,” is the advice in a spot by Banca Comercială Română, the largest lender in the Romanian banking system. And everybody followed this advice.

“The reaction they were expecting could be but one: the population would rush to the bank, ask for information about the product, and apply for this. And apparently this worked very well: Romania registered one of the highest growth rates in terms of value of loans. While this value of loans rose by up to 25 percent in Bulgaria and the Czech Republic, we had a growth rate of 100 percent,” said Adrian Preda, Chief Creative Officer of the Tempo advertising agency.

This gross amount of some €500 mln represents the catalog fees for advertising space paid for by banks. However, the real amounts are far lower, because various discounts are offered in the trading of advertising space, depending on the media channel, the invested budget, and the history of the relation with the print publications, radio, or TV channels.

“There were two products that took the lion’s share of the lending market - consumer and real estate loans. Of course, the choice of the target [Ed. n. - of potential clients] for a certain lending product was also influenced by communication. But, most important, were the “hard facts,” namely annual interest rate, lending period, the time the bank takes for approving the loan application, the minimum salary level, etc.,” Preda added.

Sociologist Mircea Kivu believes that it is not the advertisements of banks that changed the financial behavior of Romanians, but rather the economic boom since 2005.

“Before 2005, people saw their income sliding regularly, and this is why they put off important expenses. As of 2005, they began earning more, and developed an appetite for consumption. They realized they could buy things they could only dream of before. And revenues increased year by year, with banks seeing this trend,” Kivu said.