Banks granted government-secured loans of almost EUR3.2 billion in three and a half years, while total real estate loans in the banks’ portfolio amount to EUR8.4 billion. The government guarantees 50% of the ‘First Home’ loans, which means an exposure of EUR1.6 billion.
The average government-secured loan is higher than a loan granted by a bank on its own, which means the former are fewer, less than one third of the total, despite accounting for 40% of it. Banks have granted more than 80,000 government-secured loans out of 260,000 real estate loans in their portfolios.
‘First Home’ loans generated about 90% of the new mortgage loan sales, and as such have been keeping the retail business of banks afloat.
Mortgage loans were the only retail loans that increased during the crisis, while consumer finance slumped. Bankers have regularly tried to assess demand for consumer loans through promotional offers and are now trying to revive this type of loans.
Banks sold 17,000 home buying loans in the past year or three loans per each branch and only one in eight loans was leu-denominated. Mortgage lending increased by EUR750 million in the past year according to central bank (BNR) data.
“No bank projected lending decline this year. Some even budgeted ambitious growth. They are divided, however: some want consumer finance growth, others want mortgage lending growth,” says Gabriel Cretu, sales manager of loan broker Kiwi Finance.
(English version by Loredana Fratila-Cristescu)