Retail Promotions, Corporate Funding Set Private Lending Moving In April

05.26.2011 ZF English

April finally brought good news for bankers and not only for them: private lending posted the first increase this year, even though tentative as it was, owing to promotions for consumer loans and stepped up corporate lending.

In nominal terms, the non-governmental lending climbed by 0.3% month-on-month and reached 204.6 billion lei (EUR49.5 billion) in April, with the volume of new funding released by bankers topping, for the first time in 2011, clients' repayments, according to BNR data.

The private lending rebound is due to the 1.5% increase in leu loans, which went beyond RON78 billion for the first time in the past year, considering that the only segment that saw growth in previous months was the foreign currency lending.

"RON lending advance was spurred by the still low banking interest rates, being particularly visible on the segment of companies that have their borrowing cost directly linked to the Robor trend and that have started shifting to leu for short-term loans. The narrowing spread between leu and euro interest rates is no longer encouraging taking on foreign currency risk," comments Melania Hancila, chief economist with Volksbank. (EUR1=RON4.129)