The Finance Ministry did not manage to collect from banks any more than 68.6 million euros – whereas the initial demand amounted to 200 million euros, even though banks oversubscribed the issue at first, bidding for more than 303 million euros’ worth.The reason for this is the 4% yearly interest that did not please the banks, which still have other options to invest liquidity and get much higher yields than the interest level.
The treasury bills are due in one year. Out of the 68.6 million euros, the banks bought T-bills worth 36 million euros for themselves, with 32 million euros’ worth of bills purchased for their clients.
“Most banks are likely to have more profitable options to invest their liquidity, such as lending, the yield of which may readily dwarf the interest paid by the Finance Ministry,” said Liviu Olaru, senior dealer of ABN AMRO Bank, one of the brokers on the primary government securities market.
“Besides, if a bank grants a loan in foreign currency, it benefits from a higher interest at the moment, but most often banks are after much more. Such as the further investments that may later translate into earnings for the bank,” said Claudiu Cercel, BRD – Groupe Societe Generale head of the market operations department. For the time being, the interests on the credits granted in foreign currencies by the important players on the banking market range from 6% to 10%, depending on client’s creditworthiness or the volume of its banking operations.
It is equally true that granting a credit entails much higher costs and risks for a bank than those of investing the money with the Finance Ministry, where there is no risk whatsoever, but the interest paid for T-bills was thought to be too low. There were, however, bids for interests amounting to 6.57 – 7%, submitted by clients. oana.nuta@zf.ro