Robert Rekkers, BT: BNR Should Take Another 0.5 Points Off The Key Rate

Ana Săbiescu

It would be best if the National Bank of Romania (BNR) reduced the key rate by another 0.5 percentage points during the Board meeting scheduled for 30 June to help banks to resume lending and the economy to recover, Robert Rekkers, General Manager of Banca Transilvania, told BURSA.

"We hope that the interest rates on deposits will decrease in the near future. The decrease has already started, but we hope that it will continue step by step, for both lei and euros," Rekkers said, adding that Banca Transilvania was one of the first banks to start decreasing interest rates for both loans and deposits.

The Board of Directors of the National Bank of Romania will convene on 30 June. The previous meeting decided to reduce the key rate by half a percentage point to 9.5% p.a. to stimulate the economy. The decision exceeded the analysts" expectations who were counting on a reduction of 0.25 percentage points in the most optimistic scenario. A further reduction would lead to a gradual decrease in the interest rates on loans and thus stimulate lending and the economy. However, a possible side effect would be a devaluation of the national currency.

The same meeting of the Board decided to remove liabilities with a maturity higher than two years from the basis for the calculation of the minimum mandatory reserves that commercial banks must deposit with the National Bank. Robert Rekkers explained that the decision to reduce the minimum mandatory reserves had provided Banca Transilvania with additional funds in the amount of some 120 million EUR. Following discussions with National Bank experts, the mutual conclusion was that BT did not need to increase share capital.

• Banca Transilvania introduces readily guaranteed loans

Banca Transilvania yesterday introduced the a new product from the crisis-containment range. The readily guaranteed loan is offered in partnership with the National SME Loan Guarantee Fund to companies that do not have the required collateral, but need a credit line of up to 250,000 EUR. Eligible customers can receive such credit line without having to post any collateral as the National SME Loan Guarantee Fund guarantees for 80% of the loan, while Banca Transilvania underwrites the remaining 20%.

"As a bank for entrepreneurs, our initiative to introduce the readily guaranteed loan is a natural continuation of our range of products that facilitate access to financing precisely at times of difficulty. Although we have always been preoccupied with innovation, this is not the time to innovate. It is the time for simple lending products that solve the liquidity problems of the entrepreneurs," Rekkers said.

For this type of loan, Banca Transilvania charges 15% p.a. for RON and 9.5% p.a. for EUR, which is below the market average by several percentage points. The maximum duration of such loan is 1 year. The readily guaranteed loan is designed for small- and medium-sized enterprises in need of operating capital to cover, for instance, payments to suppliers, utilities, salaries and various debts to the State. To be eligible for such loan, applicants need to have been in business for at least 2 years, to have an operating profit and to prove a positive turnover or a turnover decrease of maximum 25%.