The decline of lending mainly comes from the corporate client segment and bank officials blame it on low demand.
“The third quarter, of the year saw a continued low demand for bank services considering that the economy has yet to recover, with the rise being a modest one,” said Guy Poupet, president and chief executive of BRD.
Financing granted to companies fell 5% against September 2010, to RON16.8 billion (EUR3.8 billion), while retail loans remained at around RON16.4 billion.
In the third quarter the volume of retail loans went up 2% compared with the second quarter, while corporate financing fell 2.8%.
The portfolio of retail lending clients fell by around 100,000 in the past year, to 2.2 million. Clients shifting from one bank to another has become a phenomenon in the last year, after the coming into force of Ordinance 50 on lending to individuals, which practically unfroze refinancing of old debts.
But the decline recorded by BRD comes against a background of a 6.5% rise in the last year in the volume of loans granted to individuals and to companies in the overall banking sector, to RON221 billion (EUR51 billion). BRD’s lending market share therefore fell from 16.4% to 15%.
The bank’s loan portfolio diminished by the equivalent of RON1.3 billion against the end of last year, while non-performing loans continued to pile up. Therefore, the bank had to set up RON904 million (EUR215 million) to cover non-performing loan losses.
However, provision costs fell 14% against between January and September, down 9%.
(English version by Daniela Stoican)