Swiss franc denominated loans more expensive than loans in euro

Bankers are “asked” to abandon Swiss franc denominated loans, but hesitate to do this due to competition.

“The Swiss franc quotation margin, or the difference between the sell and buy quotation, is two times higher than in euro, which represents a hidden cost,” said Anghel.

The Swiss franc appreciated 18 percent compared to the leu between July 2007 and May 2008. Banks like Bancpost, Banca Romaneasca, Credit Europe Bank, Millenium Bank, OTP Bank, Piraues Bank and Raiffeisen Bank are some of the banks that offer Swiss franc denominated loans.

The Vice Governor of the National Bank of Romania (BNR), Cristian Popa, said the central bank cannot prohibit commercial banks from offering Swiss franc denominated loans, but that it would be preferred if banks were to abandon this lending option. If BNR prohibits loans in Swiss francs, European banks can provide these by opening local branches.

The Executive Manager of Raiffeisen International, Herbert Stepic, said that BNR should take administrative measures to limit loans in exotic currencies, because if one bank gives them others will follow. “We would like to abandon Swiss franc denominated loans, but as long as others do not, we also cannot remove ourselves from the market,” said Stepic.