Traian Stancu, COO KIWI Finance: Most banks are showing interest in lending again

The majority of banks are showing interest in lending again, considering that the generation of exposure to customers has a positive effect on short term profit, said Traian Stancu, COO of loan brokerage firm Kiwi Finance.

He explained: "Because of that, we are seeing an increased interest of banks in granting loans for personal use, as well as in maintaining or improving the non-performance ratios of their own portfolios. Only by granting new loans, can a bank improve its loan portfolio, considering the fact that natural and early repayments constantly erode the value of their portfolio.

There is still solvent demand for loans, on the segment of personal needs loans, as well as for acquisition loans".

The volume of personal loans guaranteed with mortgage intermediated by Kiwi Finance has fallen almost 70% in the first six months of the year, compared to the similar period of 2011, whereas the number of acquisition loans, including the First Home, is seeing a slight increase.

Traian Stancu says that on the other hand, the number of unsecured personal needs loans intermediated by Kiwi Finance has remained constant in the first quarter of 2011.

Referring to the mortgage backed loans for personal needs, the representative of the company said that over the last two years, the main destinations for this type of product were completion of home construction or debt consolidation, by significantly reducing monthly debt.

Loans for personal needs are overwhelmingly taken in lei (99%), as loan in national currency have similar or even lower interest rates than those in Euros, said Traian Stancu.

Furthermore, there is the offer of loans in lei with a fixed interest rate, which gives the customer the peace of mind that they can repay their loan without problems, regardless of the fluctuation of interest rates or of the exchange rate, the representative of Kiwi Finance said.

On the other hand, in the case of loans guaranteed by mortgage, both those for personal needs, as well as the acquisition ones, the interest in loans denominated in lei has increased, as the banks' margins have shrunk, said Traian Stancu, who went on to say:

"In spite of this, the customers still opt for loans denominated in Euros, which still show lower interest rates. Still, for the first time, on the retail market we are seeing the case where mortgage backed loans denominated in lei have become a real alternative to those in Euros".

• Traian Stancu: Banks review the client's profile, correlated with information on the evolution of the industry in which they operate

There are cases where banks refuse to grant the loan, even though the applicants meet the requirements, said Traian Stancu, who went on to say:

"There are such cases, some justified, some of them less, but in this latter case this is where we come in to provide an argument to the customer's application, so we can get a favorable outcome.

On one hand, we need to consider that the role of the risk department in a bank does not consist exclusively of ticking off a number of standard criteria on a form, but also includes an analysis of the client's profile, in correlation with information about the evolution of the industry in which they operate or with the particular situation of the customer's employer".

On the other hand, a distinction needs to be made between the eligibility criteria stated in the description of the product, which are general in nature, and the customer profile, the representative of Kiwi said.