21 Octombrie 2008

Five banks in Romania cast off loans in Swiss francs

Volksbank, Piraeus Bank, Credit Europe Bank, Banca Romaneasca and Millennium Bank have withdrawn from their offers of loans in Swiss francs and Raiffeisen Bank and OTP Bank have limited access to loans on this foreign currency as they have reached to similar costs to loans in euro, due to global crisis.

Volksbank Romania, subsidiary of Austrian-based financial group Volksbank announced it will cast off offers of loans in Swiss francs in the context of new lending regulation enforced by National Bank of Romania and international financial crisis.

Piraeus Bank has similarly halted lending in Swiss francs; however the bank refused to comment the reasons that led to this measure. Credit Europe Bank Romania and Banca Romaneasca have not disclosed any additional details as well.

Millennium Bank Romania has also blocked its offer of loans in Swiss francs, saying “in the actual context, loans in CHF offer almost the same lending conditions as loans in European currency; therefore, there is no reason to keep two similar products within the portfolio”.

Share of loans in Swiss francs granted by brokers skyrocketed in first half 2008 up to 53% of overall volume, from 31% in first half last year, according to a research made by Romanian Association of Credit Brokers (ARBC).
Overall volume of loans in European currency dropped in first half, down to 38% of all brokered loans, from 59% share registered in late June 2007.

Representatives of Raiffeisen Bank Romania said they hadn’t halted loans in Swiss francs, “but the costs with this type of loans have reached to similar costs with loans in euros, therefore it is normal for the people to choose credits in euro or in lei”.

On Thursday, Raiffeisen International - parent company of Raiffeisen Bank Romania – said it started to direct clients to local currencies in Hungary, Romania and Ukraine and that it would be “selective” is granting loans in foreign currency to companies.

“OTP Bank Romania – the first bank in Romania that implemented the loan in Swiss francs in 2005 – did not cast off lending in Swiss francs, however, in the context of international financial crisis the bank will call for a lineup of interests afferent to CHF to the actual market conditions, which will inevitable lead to a rise of costs for these loans,” said Adrian Chichita, deputy managing director of OTP Bank Romania.
GarantiBank and Bancpost kept their lending offer in Swiss francs.

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