BRD's bonds fund only 1% of its loans

The volume of loans Banca Romana pentru Dezvoltare (Romanian Development Bank – BRD) granted last year was 64% larger from the year before, compared with the 19% growth in the amount of cash attracted from clients. The figures are closely resembling those seen across the entire banking system where banks’ placements with clients rose 68% in 2003 from 2002, while the clients’ placements with banks progressed by only 22%. This piece of information came from BRD’s president Bogdan Baltazar on the occasion of BRD releasing the first bond issue of a bank in Romania after WW2. Albeit the 500bn ROL (12.2 million euro) issue covers only 1% of the total credits granted by the bank, BRD’s bond issue is justified by the need to raise some medium and long-term funding resources, a problem most of the banks in Romania are having, after all. “A 500bn ROL bond issue will not dramatically change the situation of the bank’s assets and liabilities,” general manager Patrick Gelin said. BRD’s long-term loans rose 191% last year, Baltazar says, medium-term loans rose 107% and short-term loans gained a mere 26%. ZF