“We will not see a boom. I am more optimistic about corporate lending, primarily lending to major companies,” Lhotte told ZF in an interview.
There are positive signals on the small business segment, as well. The market is highly competitive, Lhotte added.
BRD, held by France’s Groupe Societe Generale, had a net stock of loans of 26.5 billion lei (EUR5.9 billion) at the end of 2014, down 5% on 2013. Lending across the banking system went down by only 3% in 2013.
The loan stock shrank because the bank cleaned up its loan portfolio, reducing its non-performing loan ratio by more than 5% to 16%. “(…) We are ready to grant more loans but there is not enough demand on the market,” BRD’s chairman and chief executive says.
Lending decline was more abrupt on the corporate segment, where demand for new loans remained low last year. The retail loan stock did not shrink because of the higher sales of consumer loans and of the First Home scheme. New consumer loans increased to RON2.5 billion.
Net banking revenue went down by 8% to RON2.5 billion. Lhotte says the interest spreads narrowed and the bank also dropped a number of fees charged for various operations. Net interest income amounted to RON1.5 billion. As the bank dropped fees at the end of last year, the aggregate fee income only fell by 1% to RON737 million.
Lhotte does not believe there is room for further interest rate cuts soon, as loan costs are already very low as they are. BRD has attractive loan offers, he says, but the decision to take on debt rests solely with the customers and customers need a dose of confidence in the future to take out a loan.
(English version by Loredana Fratila-Cristescu)