Raiffeisen: Demand for corporate loans on the rise

Steven van Groningen, head of the Raiffeisen Bank, the seventh leading local bank, says he has been seeing an increase in demand from companies and expects it to be the growth driver for the lending business for the rest of the year.

“Demand for corporate loans has been rising, I expect the SME segment to follow. As for individuals, we are constantly selling above the repayment level, which is a good sign, considering the rather low confidence of consumers in the economy,” Steven van Groningen told ZF.

At the end of September Raiffeisen was seventh among local banks, with 19.2 billion RON (4.5 billion euros) in assets. The bank has an about two million-client portfolio.

Corporate lending was the only one that moved last year, too, though only the foreign currency part of it, with the funding in RON remaining low. On the retail side of business, the “First Home” scheme drove the stock of mortgage loans up, but sales slowed down towards the end of the year.

Bankers begin the year moderately optimistic, the same as the forecasts that point to resumption of economic growth, which will be modest, though, as the Gross Domestic Product will go up by about 1% after two years of decline in a row.

Cătălin Pârvu, head of Piraeus Bank, told ZF in a recent interview that he expected a slight increase in lending partly fuelled by the need of banks to expand their revenue base to cope with provision expenses, which are still high. Because of the modest economic growth, Pârvu, too, expected lending to only see a one-digit growth, doubting feasibility of plans of some players to speed up to two-digit growth.