Six of the top ten banks in H1 cumulated net profits worth almost 350m euros, like in the good times of 2005-2006, while their corporate clients are struggling for breath, faced with plummeting sales and soaring loan interest rates.
Six-month figures show that the businesspeople’s accusations against bankers were not unfounded: lending institutions are enjoying substantial gains from raised interest rates, while non-financial companies are fighting for survival.
The NBR started cutting the key interest rate in February, starting from 10.25%, but in May banks were still levying interest rates of above 20% per annum for new RON-denominated corporate loans worth up to 1m euros, while for bigger sums clients still paid 14-15% per year.
For loans of up to 1m euros costs are as much as 6% higher than a year ago, up to no less than 20.5%, while for loans exceeding this threshold they reverted to May 2008 levels after having jumped to over 20% per annum in January-February.
Businesspeople are furious, as the high interest rates are pushing them into insolvency, while they see banks continuing to report profits of tens of millions of euros.
“Banks have been milking the companies for money, but, if they keep this going, I wonder what they will do when they don’t have anybody left to take money from,” comments Ionut Negoita, who owns 29m euros to several banks.
“(…) Banks are not charities and, in a crisis period, they know how to speculate and profit from interests; the industry foots the bill,” stated Sorin Minea, head of the Angst charcuterie producer.
Vicentiu Zorzolan, manager of retailer AAV Group (Esprit, Springfield, Cortefiel), points that, while banks have reported profits, electrical and car companies have seen 40% slumps, while FMCG and pharma companies have dropped by 5% and those in fashion retail – between 25 and 35%. On the other hand, bankers say they will not risk a scenario where they cannot pay back their depositors because of being too permissive in loan granting.
“Banks do not grant loans from their own money, but from the depositors’ money. I wonder if anyone would deposit one’s money with a loss-making bank,” says Dan Pascariu, chairman of the managing board of UniCredit Tiriac Bank.