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Banks discard Swiss franc loans

Romanian banks are discarding Swiss franc loans from their offer, because their costs are higher than the costs with euro loans.

Swiss franc loans, some 15 percent of the individual loans taken out in a foreign currency in Romania, have been shed from most of the banks' offers, and they are the most affected credit instrument following the implementation of new restrictive crediting rules by the National Bank of Romania (BNR) and the ongoing world credit crisis. Romanians having taken out Swiss loan francs can refund their loans in euro or the local currency to deal with costs, analysts say.

Daily Business standard says five players - Volksbank, Piraeus Bank, Credit Europe Bank, Banca Romaneasca and Millennium Bank - have halted granting Swiss franc loans, while Raiffeisen Bank and OTP Bank decided to limit them on grounds that their costs are similar to euro loans.

BCR Chief Analyst Lucian Anghel says the balance of Swiss franc loans is standing at some 2 billion euros. Out of the total loans granted in another foreign currency than the euro, Swiss franc loans make up 95 percent and most of them are in the form of consumer loans. Anghel says one of the reasons the banks discarded granting Swiss franc loans is because the forex risk as a result of the implementation of the new restrictive BNR rules is higher, at 25 percent, compared with the risk entailed by the loans denominated in the single European currency, which cancels out any interest margin.

Raiffeisen Bank Chief Analysts Ionut Dumtiru believes the decision of the banks to limit or even discard Swiss franc loans is perfectly reasoned, because the Swiss franc, a cover currency, continues to strengthen against the euro, and the euro continues to strengthen against the local currency, the leu (RON). That is why, the analyst says, the decision meets the customers' needs, because of the greater repayment efforts of Swiss franc loans under the new circumstances.

The effect of the accelerated rises of 2007 on the segment of individual loans, of the implementation of the restrictive BNR loan rules and the cancellation of the Swiss franc loans by the banks is expected to be a contraction in the advancement of crediting to 30-40 percent at the end of the year, down from 60 percent, analysts believe.

The annual growth pace of non-governmental credit strongly tempered in the last two months of summer by 13 percentage points, down from 63.4 percent in June, to 55.8 percent in July and 50.4 percent in August, amidst discussions about the new BNR crediting rules and rising loan costs.

Forex loans are still preferred by many Romanians, having advanced to 54.53 percent of the total loans in August, from 54.12 percent a month before.

 

Sursa: http://www.rompress.ro

Tags: loans franc swiss currency percent euro banks costs bcr bnr otp

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