Weiss, RBS: Only companies that can come up with capital will survive

Only companies that can receive support from their shareholders and those that were careful about the indebtedness level will be able to cope with the difficulties in the economy, says Peter Weiss, head of RBS Romania, one of the banks with an established presence in corporate banking. “Some companies got into too much debt. In the good years of the past, the debt to capital ratio rose too much. Now it’s a good thing if they have shareholders that can come up with capital. If they don’t, and additionally incur losses, the capital dries up quickly,” Weiss says. The economists’ forecasts are increasingly bleak after the shock of the 6.2% GDP decline in the first quarter of the year, with most forecasts now indicating a deepening of the economy’s contraction in the second and third quarter. Weiss says it is very difficult to make a credible economic projection at present. “Nobody knows how deep the hole is and how long it will take us to climb out of it. I am constantly astonished to hear people say things will be better starting in October, and I ask them what day exactly,” says the head of RBS Bank.