BRD, Romania's second-largest bank, yesterday gave the first strong signal aimed at reviving demand for retail loans by cutting interest rates across the entire range of products, and making up to three percent cuts to interests on unsecured consumer loans.
Whilst so far banks resorted mainly to promotional interest rate cuts, applicable only for a limited period, and meant to test clients' appetite, BRD now comes with a "resetting" of nominal interest rates to lower levels, in a bid to attract clients' attention.
"We want to take the first steps and show our willingness to finance our clients' needs. We believe our signal will get a good reception on the market and clients will have more confidence in us in the future, which will increase lending demand," said Roxana Cosmescu, who has recently been appointed executive manager of the Commercial Pole of the BRD. The move comes after 2010 saw a 1% decline in the volume of loans granted by the BRD, while the number of active retail clients fell by around 45,000.
The biggest interest rate cuts, of up to three percent, were made on unsecured consumer loans, which usually entail lower amounts so demand for them is likely to be revived more quickly. For lei-denominated loans, interests are fixed, and range between 7.5% and 9%, depending on the duration of the loan, while for euro-denominated loans, the bank levies fluctuating interests consisting of the three-month EURIBOR plus margins of 6.5% and 8.5% respectively, depending on the loan duration.
BRD, Romania's second-largest bank, yesterday gave the first strong signal aimed at reviving demand for retail loans by cutting interest rates across the entire range of products, and making up to three percent cuts to interests on unsecured consumer loans.
Whilst so far banks resorted mainly to promotional interest rate cuts, applicable only for a li
