Bogza, Bancpost: One needs to stimulate the economy to revive lending

Loan demand from the private sector is very weak and the National Bank has no levers to intervene, with measures that will target the resumption of economic growth in general being needed, believes Mihai Bogza, Bancpost chairman and former governor of the NBR (Romanian central bank).
“The problem (of the low demand for financing i.e.) is not in the hands of the NBR. It is an economic problem. Measures should not be aimed strictly at reviving lending, but at resuming economic growth,” Bogza told ZF in an interview.
He says Bancpost has not been able to boost its portfolio of loans granted to private-sector clients, although it had sought a two-digit rise for this year, and even had promotional campaigns in spring.
“On the corporate segment, there are certain companies, rather than whole sectors that are performing well. Mortgage loans are also seeing a slight rise. But as far as small companies and consumer loans are concerned, demand is very weak,” Bogza says.
On a separate note, the head of Bancpost says the price of loans needs to consider the cost of risk (provision costs for unpaid loans), with its rise overcompensating for the cheapening of financing resources.