IOAN NICULAE: "Banks are more exchange houses than lenders"

Banks are more exchange houses than lenders, says businessman Ioan Niculae, the president of the Union the Council of Romanian Investors, who says that in the last few years, the relationship between banks and companies has "devolved".

He said: "During the economic crisis, both Romania, as well as other countries have used up a large chunk of the money from the IMF and the World Bank. Banks aren't helping the Romanian economy in any way, they are more like exchange houses than lenders. Businesspeople are wasting their time with them".

According to Mr. Ioan Niculae, at the moment, the most frequently encountered forms of lending is the intragroup lending, with companies which belong to the same corporation lending to each other. To a lower extent, companies resort to foreign banks. On our market, there are at most two banks that get involved, to a small extent, in the restructuring of companies, the businessman said.

• Blănculescu: "The banking system is paying the price of its recklessness"

The Romanian banking system is paying the price of its recklessness, says Ionel Blănculescu, honorary advisor of prime-minister Victor Ponta. "When it comes to the banking system, there are three stages in its evolution. Until September 2008, there was the stage of bank recklessness, where banks were eager to grant as many loans as possible, reaching a very high exposure, to all sorts of projects. In the second stage, between September 2008 and until last year, it was found that the level of non-performing loans reached an incredible amount for a country such as Romania. During these years, the crisis was felt by the environmental sector, and banks were unable to deal with the blow. We can say that, for banking institutions, this was the period of indifference, which led to restructurings, contractions etc. The third stage, which began in 2012 and will end two years from now, can be described by the fact that banks were seriously affected by the crisis, paying the price for their recklessness".

The high level of recklessness is outsourced at very high costs, and debt collector are ravaging across the country, said Ionel Blănculescu, who added that at the level of the companies and the population, there are tragedies happening, and the effects are being felt by the national economy.

"Regardless of how many promises were to happen, the banks are refusing to restart lending, in any way. They are now concerned with managing their current portfolios, not of creating new portfolios", the honorary advisor of the prime-minister said.

He said that banks are in the middle of a debt-collection process, and that they are not willing to make any concessions, which means that they are only getting back about 9-10% of their receivables: "After 2015, when this stage will expire, there will be a new period of strong growth for the private sector, until 2018".

According to Ionel Blănculescu, there are currently alternative sources of financing available on the market, far more complex and ingenious, based on all types of funds, including investment funds.

• Ovidiu Nicolescu: "Banks have all kinds of fees and concealed costs"

The relationship between the banking institutions and the real economy is not seeing any spectacular changes, as the number of loans still remains low, says Ovidiu Nicolescu, the president of the National Council of Small and Medium Enterprises (CNIPMMR).

Ovidiu Nicolescu says that the delays for obtaining a loan are very long. There are times when the banks keep the application for a long time, and then they say that the company does not qualify for a loan. "Banks have all kinds of fees and concealed costs and they do not have a very transparent policy which would involve posting all the lending terms on the website", said Ovidiu Nicolescu.

According to him, for very important customers, banks accept the rescheduling of the loans, as this is the only way they can collect their claims, as the real estate market is deadlocked, and it is difficult to sell the properties put up as collateral by the debtors, especially at the value they were pledged.

"Banks have very little cash available, as most of it is invested in government bonds, because those types of investments have no risk, and the revenues are very safe. What is very important is also the fact that about 97% of the Romanian banks are owned by foreign lenders. It doesn't matter that 15% of the SMEs say that they have a market, if they don't get access to loans", said Mr. Nicolescu.

The representative of the CNIPMMR says that, for the first time, 93% of the companies are resorting to self-financing. Less than 30% turn to borrowing: "Unless a major change is implemented to change that, the economic turnaround will be delayed, because without money no economy can be turned around".

• Valeriu Nistor: "Lending is very low because of low supply, as well as low demand"

Lending is very low, in general, because of low supply and low demand, as well, according to Valeriu Nistor, the president of AmCham.

He told us that businesspeople are wary of borrowing, as they have borrowed so much during the times of economic boom, and the resulting uncertainty creates a state of long-lasting fear.

Lending criteria have become far stricter, which is another reason why companies don't want to borrow anymore. Also, we don't have enough economic projects that viable enough to be financed, the president of the AmCham says.

Still, banks are more involved in understanding the business model than they were a few years ago, said Valeriu Nistor, who added that, depending on the situation that they are going through, banks are getting involved in the recovery of the loans than they did 2-3 years ago, through rescheduling, the granting of grace periods etc.: "This helps the debtors, as well as the creditors, who understand far better the business model and what the creditor would need to be able to repay the money".