“Everybody thinks bankers are very upset when interest rates drop, but they are not, because low rates boost loan demand. Lending rates account for the bulk of banks’ revenues and this volume (of revenues – e.n.) can be kept at this level or boosted either by increasing interest rates, which is a disaster, or by increasing the lending volume,” Ghetea, who also serves as the chief executive of state-run lender CEC Bank, told a press conference Thursday.
He said interest rates will drop for all categories of loans, adding that, according to statistics, the sale and purchase of homes is starting to “pick up”, which points to a revival in mortgage lending.
Asked why banks fail to reduce their own margins included in lending rates, Ghetea said these margins indicate the risks banks are taking and will decrease when competition in the banking system increases.