Thursday, January 22, 2009

Romania BCR retail lending down by 60 pct in Q4

BUCHAREST, Jan 22 (Reuters) - Retail lending at Romania's biggest bank BCR, owned by Austria's Erste Bank (ERST.VI) ERST.BX, fell 60 percent in the last quarter of 2008 compared to the prior three months, a senior bank official said.

The drop was due to higher interest rates and harsher lending rules for individual borrowers imposed by the central bank late last year.

Retail lending in December dropped to 128 million lei ($39 million), said Sorin Mititelu, a BCR executive director.

"A switch from a promotional interest rate to a floating interest rate as a way to calculate indebtedness levels and a rise in credit costs led to a drop in value and number of eligible clients," Romanian newspaper Ziarul Financiar quoted Mititelu as saying. Earlier this month, Romania's central bank relaxed conditions it had placed on banks issuing new mortgage loans in a bid to offer support to the emerging economy.

The bank had imposed harsher rules on lending last August, aimed at limiting risks related to fast household credit growth, seen as a key threat to macroeconomic stability. (Reporting by Luiza Ilie; Editing by Dan Lalor)

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