THE "ROMANIA'S DEVELOPMENT IN THE NEW EUROPEAN FINANCIAL CONTEXT" CONFERENCE / BOGDAN BELCIU, PWC: "There are no premises for lending"

There are no premises for lending in Romania, even if the interest rate charged by banks has dropped gradually over the last few years (reaching a reasonable level compared to 2007-2008), the economic situation has stabilized to a certain degree, the prices on the real estate market are down by half compared to the period in question, and consumption has recovered, especially on the durable goods segment, says Mr. Bogdan Belciu, partner at PwC Romania.

In his opinion, the basic issue, in this case, differs from one bank to the next and concerns both the moral hazard of the products offered, as well as the asymmetry of the information provided by the financial institutions.

"The level of financial education can improve a lot in Romania, banks have to educate the client, to find the way to make their products attractive", says Mr. Belciu, who went on to say: "Banks must teach their employees to sell better, to deliver products and services that interest the customers".

The representative of PwC mentioned that there is a certain lack of confidence among consumers when it comes to the macroeconomic premises, the geopolitical context, a pessimism among customers, but there is also a potential for lending growth, especially in the area of companies, of SMEs.

Mr. Belciu says that now, the financial institutions should wait for demand from customers to increase, to boost lending, but should take steps to adapt to the current economic context.

"There is more that can be done. It is up to the banks to devise a better pricing strategy, along with advertising and marketing", says Mr. Belciu, who added that at the present time, the prices practiced by banks should be competitive.

The representative of PwC thinks that loans are still expensive, even though the interest rates have decreased over the last few years.

In the opinion of Mr. Belciu, the reorganization of the Romanian banking system was done rather slowly and late. Bogdan Belciu says: "In this system, there has been a significant level of inertia when it comes to cleaning up the portfolio of non-performing loans, as well as in the restructuring of the loans". The PwC official also says that, under these circumstances, banks have very high costs, which have been felt in the portfolios, as well as in their pricing policies.