Gheţea, ARB: Banks are focusing on savers

Looking for financing solutions to the rising number of non-performing loans, bankers are turning to savers, Radu Gheţea, the president of the Romanian Banking Association said yesterday, during a finance and banking seminar.

Mr. Gheţea said: "We are looking at a situation where, for the last year and a half there has been no demand for loans, either in foreign currency or in lei. Banks are willing to lend, but unfortunately there is no demand. Retailers and banks need to find a solution to this issue. The population doesn"t want to borrow at the moment. Right now we are more interested in saving than we were before. Some time ago, when we were short of money to lend, we would phone Vienna, Athens or Paris and we would have the money we needed, but times have changed".

Mr. Gheţea, who is the head of the Romanian Banking Association and of CEC Bank, considers that agriculture could be the one that rescues us from the crisis: "CEC Bank has no bad loans for the agricultural sector, which accounts for 18% of its loan portfolio. What"s more, we have increased the interest rate for deposits to 16% to stimulate saving and to help our customers".

Out of 100 loans that CEC Bank gave to companies, which were restructured, 25 of the customers can"t meet their payments, while 75 of them managed to save themselves.

Radu Graţian Gheţea considers that it is lack of demand that has caused the freeze in borrowing, not the high interest rates or strict lending terms. Concerning the activity of banks in the first semester, Gheţea said that it is hard to draw conclusions based on that period, saying only that "the first six months of the year were characterized by the ongoing impact of the crisis on companies and individuals".

However, even though the state has decided to tax the interest on bank deposits starting with July 1st, the chairman of the RBA says he doesn"t expect the measure to discourage saving.

"This is happening in other countries, where bank deposits are taxed, but we hope this measure will be repealed", said Gheţea, who said that he has already sent a 12-page letter to the National Consumer Protection Agency (ANPC), in which he requests answers and clarifications concerning some of the articles of the law.