How much cheaper would loans be should bank wages drop by 25%?

The still high level of interest rates is stalling lending, bankers reckon, but they are still reluctant about cutting wages to make room for cheaper loans. Last year, banks’ wage expenses hit 4.2bn RON (around 1bn euros), taking into account an average gross monthly wage of 5,000 RON and an average number of 70,000 employees. Thus, a 25% cut in wages would equal savings of around 1bn RON (250m euros). Against a private lending volume of almost 49bn euros, the weight is modest, though. Bankers state the price of loans is influenced by a series of factors, with fixed costs having a relatively low impact. Domestic banks collect interests worth 4.8bn euros together every year, against a volume of private lending of almost 49bn euros. Cutting wages by 25% would equal a little above 5% of interest rates collected by banks during a year. NBR governor Mugur Isarescu, who last year lashed out at bankers for not making loans cheaper, has tempered down his tone in recent months, saying it is more important for them to stay cautious and for margins to allow taking in non-performing loans.