BRD to reduce indebtedness level from 70% to 60%

BRD, the second-largest bank on the market, is preparing to adjust the maximum indebtedness level for clients’ real estate credits from 70% to 60% of incomes, while interest rates will undergo “moderate increases” for RON- and euro-denominated credits, according to Sorin Popa (photo), Executive Officer of BRD in charge of retail. “As from March, BRD will introduce a series of new measures to filter clients that are interested in real estate credits, based on income. We have made this decision in order to avoid repayment difficulties, and to keep clients from ending up in an uncomfortable position,” Popa told BUSINESS Magazin. He added that, for the bank, this decision would mean a reduction in the number of loans it can grant. “It is better to be safe, than to do business at any cost and pay dearly later.” Under the new standards, it will be difficult for families with a monthly income of less than 500 euros to get a BRD real estate loan. BRD was among the first lending institutions that received the National bank’s approval to grant credits to individuals according to its own norms. Since June last year, the bank has accepted an indebtedness level of up to 70% of a client’s monthly income, as well as a less than 25% down payment (the standard sum) for real estate credits. The foreign currency risk, the level of foreign investments, the rapid and somewhat uncontrollable growth of consumer credit, the recommendations made by foreign analysts concerning Romania, the crisis on the international markets – these are just a few of the elements that BRD is now considering.