BCR, BRD and CEC Bank have announced in the past week they were extending their refinancing campaigns into July, and cutting fees, saying applications from clients had exceeded expectations. Austria’s Raiffeisen has a refinancing campaign that will extend until mid-August.
“We have decided to extend the promotional offers until mid-July thanks to the high loan refinancing demand recorded so far,” said Phillippe Lelarge, executive manager of BRD’s strategy and marketing department.
BRD was among the first banks to launch a refinancing product this spring. The bank sells consumer refinancing loans denominated in lei, with a nominal interest of 7.25% a year, but the annual percentage rate exceeds 12% a year. In the case of real estate loans, the nominal interest rate is between 4.5% and 5.25% a year depending on the down-payment, and is made up of three-month Euribor plus a fixed margin of 3 to 3.75% a year.
Reliable clients from the competition began being targeted by banks back in the autumn of last year, with competitiveness encouraged by the enforcement of Ordinance 50 on consumer loans, which eliminated the early repayment fee.
Competition intensified this spring, as interests fell by an average two or three percent since the beginning of the year, and many banks even dropped loan application processing and management fees. While the first refinancing products became available a year ago, now half the lenders promote this type of loan.
“The ongoing refinancing campaign has led to an over 50% increase in refinancing loans. New loans versus refinancing loans have held an approximately equal share in the volume of sales lately,” specified Ionut Stanimir, head of the BCR’s external communication department.