Faced with falling sales of new loans, bankers are maintaining the pressure on current clients and trying to generate revenues that should cover their bad loan charges by applying interest margins that are 2.5% higher than before the crisis. The spread between average interest rates for RON-denominated retail loans and deposits underway in late September reached 8.12%, with the profit margin being thus one percentage point above the level of the similar period of 2009, despite a slight drop in August and September. By comparison, in September 2008, the interest margin on the retail segment stood at 5.6%.
“Banks are trying to offset bad loan costs with a secure income. For the time being, they are able to keep margins for current loans up as there is not enough competition on the market and clients cannot too easily get refinancing from other banks. Once clients will be able to more easily move from one bank to another, margins will also start decreasing,” comments Dragoș Cabat, managing partner with Financial Views.

Subiecte #Bankers