Today, the BURSA newspaper is organizing the third conference with the topic "The Role of banks in the restructuring of companies". The agenda of the conference is comprehensive and it is trying to answer some questions of major current interest, such as the ones concerning the regaining of trust by the banking system, the ways of increasing the loans extended to companies or of the role of banks in attracting European grants.
But what if it is too late to restructure the huge volume of non-performing loans in the banking system, and banks can only help SMEs by turning down their loan applications?
Why? Because the restructuring can begin before the granting of the loan. That statement may seem absurd, but only at first glance.
How many times were entrepreneurs or even major companies encouraged to take out greater loans than they initially intended, by banks who were very "lax" with the appraisal of the collateral, and only taking a very cursory glance at the competitive environment and the sector outlook? To say nothing of the "solutions" offered to individuals, who did not have the required downpayment for a mortgage loan?
Amid the exuberance and the rush for market share in the period which preceded the crisis, the banks did not fulfill their role of partner of the business sector, which should have also included warning the client about overleveraging or about applying for a loan that far exceeded their repayment ability.
The officials of the NBR repeatedly said that bank's credit analysts should know how to read a balance sheet. But it that enough? No, because the balance sheet reflects a past situation and does not guarantee that a company will be able to overcome the obstacles it may face in the future, especially if the time frame is greater than a few years, and the world's and regional economy is shaken by an unprecedented cr
