Banks should aim at companies

More optimistic forecasts regarding economic growth and inflation in Romania should make banks resume loans aimed at the corporate sector, Radu Gratian Ghetea, chairman of the Romanian Bankers Association, was quoted as saying by Mediafax.

The recession posted in the late nineties and the inflationary rate that exceeded forty percent made banks reluctant towards the companies, in a time when they could have gained at the expense of the public debt by operating attractive interests, as the credit contracting risks were low.

Romania’s economic growth rate this year is estimated at 4.5 percent, following the high export volume in 2000 and the improvement posted in the corporate sector performances.

The Government is planning to obtain more loans from foreign sources, while the inflation in decline is expected to have a beneficial impact on the domestic debt.

“We will have to reconsider corporate loans. Companies need credits and the banks are eager to lend,” Ghetea said.

The banks, however, are still hesitating, due to the enthusiasm soon after 1989, when a lot of banks lent money to companies which turned out to be non-performing, due to the slow restructuring pace of the state-run companies and the economic standstill.

This cautiousness displayed by the banks left many companies in Romania with no capital, and many of them, in large part private companies dealing in industry and services, found themselves unable to make payments.

“The reluctance of the banks is a sane attitude, but we are hardly giving loans for the economy,” Ghetea added.

The yearly interests for the loans granted to non-banking clients range between forty-six and forty-nine percent, while the interests for T-bills reach about fifty percent, which is deemed as quite an attractive level.

The new government announced it was planning to derive approximately seventy percent of the funds it needed from foreign sources, measures deemed by many analysts as a signal that the banks had started to lend companies.