The financial crisis is also bringing shock measures adopted by bankers into the spotlight, with the unemployed, who no longer have any source of income, forced to pay 30 percent more on their installments, due to the depreciation of the leu and higher interest rates, especially since the national currency is reaching new all-time lows on a daily basis.
“For individuals who lose their jobs, we could postpone the obligations they have to the bank for a very brief period of time. Any decision regarding this matter will be made at on a case-by-case basis,” said Sorin Mititelu, CEO of BCR’s Business Development and Retail Products Division. The strategy adopted by Briton, Dominic Bruynseels, former Manager for Emerging Markets of the Barclays lender for 27 years, and current CEO of BCR, could also be adopted by other bankers, since the number of individuals with arrears in bank portfolios is increasing alarmingly as promotion periods expire and the level of arrears closes in on the €1 billion threshold.
The bank’s offer comes only one day after Manfred Wimmer, who once headed BCR and currently the Financial Manager of Erste, BCR’s majority shareholder, said that a RON 4.9/€1 exchange rate would cancel the bank’s earnings from foreign currency loans. The stoppage on financing brought a contraction of 60 percent of the value of loans granted by BCR in the last quarter of 2008, compared to the previous three months. Company officials intend to ask the National Bank of Romania (BNR) to approve the application of an indebtedness degree of 70 percent of income on mortgages. BCR’s current regulation allows an indebtedness degree of 60 percent of the net income of clients, but the average on the bank’s portfolio does not exceed 45 percent. BCR’s shareholders agreed yesterday on the company’s budget for 2009, but declined to comment on this issue. Market sources say that the initial proposals for the bank’s strategy included a 20 percent rise in revenues and expenses, and the maintaining of profit at its 2008 level. The problem is the attracting of resources and client stand-by, while BNR officials admit that lending will advance by less than 15 percent.
