Government Re-Allocates 220-280 Mio EUR Within First Home Programme To Stimulate Best Performing Lenders

The Government will subtract 220-280 million EUR from the quotas of seven or eight banks participating in the State-driving housing scheme First Home Programme and re-allocate it to the banks that have managed to disburse the most significant volumes of loans within the programme, according to Aurel Saramet, President of the National SME Loan Guarantee Fund (FNGCIMM). The diminution of the quota will apply to the banks that disbursed the lowest volumes of State-back mortgage loans.

According to FNGCIMM President Aurel Saramet, seven or eight banks participating in the First Home Programme have disbursed between zero per cent and 3 per cent of their respective quota, so the remaining funds will be re-allocated.

After meeting with Prime Minister Emil Boc, Saramet announced that the best performing banks in the First Home Programme were BRD / Groupe Societe Generale, BCR, Banca Transilvania, Alpha Bank, Volksbank and Raiffeisen Bank. He further stressed that the top four banks had disbursed 88 per cent of the overall volume of State-backed mortgage loans issued so far.

Referring to State-run CEC Bank, Saramet said that the bank had at some point experienced "better dynamics" on RON-denominated loans but, as the interest rate was notably higher for RON than for EUR, lending dynamics had plunged to "unsatisfactory." "I have spoken with CEC Bank and they are looking for solutions. However, we will certainly re-allocated some of their quota, too," he said.

FNGCIMM President Aurel Saramet stressed that three banks had used zero per cent of their quota whereas four or five banks had used between 0.1 and 3 per cent. He declined nominating the banks in question. "All these banks will lose some of their quota, which will be re-allocated," Saramet concluded. "According to our first estimates, the overall sum (i.e. to be re-allocated) stands at 220 - 280 million EUR," he said.

Saramet further said that 25.5 per cent of the approximately 4,800 housing units sold via the First Home Programme so far had been built after 2008. Following the re-allocation, a distinct portion of 25-30 per cent of the re-allocated funds will be reserved for to-be-built homes.

Referring to the average duration for processing an application for a mortgage loan under the First Home Programme, Saramet said it had decreased by 10 days from 47-48 days before the optimization.