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Loans In Romanian Lei Suffocated By High Margins – Ctrl Bker

Romanian banks are smothering the development of loans in Romanian lei with the high margins they apply, which went up to 7.3 percentage points in August from 2.4 pps late last year, central bank’s chief economist Valentin Lazea said Tuesday.
Loans In Romanian Lei Suffocated By High Margins – Ctrl Bker
27 oct. 2009, 11:15, English

„I believe the banks are killing the goose with the golden eggs,” Lazea said on the sidelines of a banking seminar.

Judging by the ratio between demand and supply, the loans in Romanian lei should have topped euro-denominated loans by now.

„This isn’t happening, and the loans in hard currency went up 13.25% on the year in August, while loans in lei dropped by 9% on the year. Overall, private lending rose 3.1% in real terms,” Lazea said.

The loan-deposit ratio in Romania fell to 1.23 in September from 1.31 in December last year. The same ratio for loans in lei dropped to 0.8 in the first nine months from 0.85 at the end of last year, the central bank’s official said.

As to the euro-denominated loans, the loan-deposit ration fell to 1.85 in September, from 2.09 in December 2008.

„Instead of an expansion of loans in lei, we witness a contraction,” Lazea noted.