First signs of consumer lending thawing

Retail lending seems to be rebounding as Raiffeisen bank is coming up with a consumer loan offer, after Banca Transilvania announced interest rate cuts for RON last week. Raiffeisen is the first top player coming with a promotional offer for the sale of car loans, thus sending a clear signal it plans to embrace more aggressive lending, after a period of several months when the market has been almost completely frozen. The volume of RON loans taken out by the population dropped in January to 40.5bn RON (9.44bn euros), from 41.3bn RON last October, in line with NBR data. Foreign currency denominated loans shrank from 14.85 to 14.5bn euros over this period. Since last November, retail lending has declined in real terms, as banks have significantly tightened criteria for lending. At the same time, the rising interests and the RON decline of recent months have eroded customers’ indebtedness capacity, in the context where, for the same contracted sum, monthly instalments have climbed considerably. Bankers say these constraints have been doubled by declining demand from the part of customers, who chose to postpone the decision to take out a loan amid uncertainty about the economy’s evolution. Now, Raiffeisen comes with a promotion part of which it offers loans for car acquisition, for which it does not apply any interest rate in the first year of contract. Starting the second year, the interest is variable. Loans are granted only in RON, with a ceiling of 75,000 euros.