Romanian Lender BCR To Reschedule 20,000 Retail Loans

Romanian lender Banca Comerciala Romana, or BCR, plans to reschedule 5,000 mortgage or consumer mortgaged loans and 15,000 consumer loans, out of around one million loans granted by the bank on the retail segment, BCR’s Executive Vice President Martin Skopek said Monday.

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Skopek, the Vice President in charge with the retail business line, said the lender monitors its clients' situation, permanently updating the lists of persons with delay-payments.

He said the loans subject to reschedule have different values, specifying the average value of the mortgage loans in the bank's portfolio is of EUR40,000. But he added the aforementioned value is not necessarily in line with the loans to be rescheduled.

BCR has set certain rescheduling conditions, as the period of the payment’s delay or the client’s history in having a habit to postpone paying its installments, he said.

Generally, a bank loan is rescheduled to allow the client to pay his loan more easily and to increase the money-return probability. The loan reschedule process implies giving the client a grace period to pay the interests or the main loan, rescheduling his debts or renegotiating several reimbursement terms.

Skopek said that several payment delay cases of between 1 to 15 days are caused by the clients’ habit to pay their installments in cash, mentioning that around 65%-68% of the bank’s clients use this payment modality.

By rescheduling its clients’ loans, the bank is also trying to eliminate the clients who might take advantage of the current economic crisis to no longer pay their debts.

Skopek also said the new retail loans granted by BCR in the first quarter are 60% lower than in the same period a year before.

In addition, Skopek said the clients have become more careful in contracting a loan.

"As of 2006, the local market has been dominated by consumption. The good part of the financial turmoil is that the people become more prudent," Skopek added.

BCR’s loan balance, according to the International Financial Reporting Standards (IFRS) rose in the first three months by 1.5 billion lei (EUR1=RON4.1560), respectively 3.3% compared with end-2008, at RON46.533 billion, the bank stated.

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