Unicredit: Leu Consumer Loans Market Is Shaping Up

05.30.2011 ZF English

The rising euro financing costs, particularly for consumer loans, will spur the shaping up of a market of consumer loans in lei, says Rasvan Radu, executive vice-president with UniCredit Tiriac Bank.

"It is just a matter of time until we have a market of consumer loans in lei. How will this happen after clients saw that forex risk has not materialized as the BNR took care to moderate leu decline tendencies? The cost of euro funding for consumer loans will rise as the associated risk is greater. The general trend is for the euro reference interest rate to go up. Euro refinancing sources are at much lower volumes than in the past and the domestic market will make a necessary liquidity pool.

The Italian group sells consumer loans domestically through a specialized vehicle, UniCredit Consumer Financing (UCFin), set up in 2008. According to their own estimates, they rank third on the domestic market.

At the end of April, the company had a loan portfolio worth EUR145 million. In the first four months, the loan volume climbed by 39% from a year ago, with the offer including both lei and euro funding.