Bankers managed to post a 100 million-euro net profit in the first quarter of the year even though the economy is most likely still in recession, precisely because of the lack of funding, which blocked consumption and deprived companies of clients, reads the Ziarul Financiar daily. Non-governmental loans have been on an uninterrupted slide for a good few months, but banks boost their revenues by increasing the spreads - i.e. they are much slower to cut credit interest rates than deposit interest rates. Bankers thus take advantage of the fact that they have sufficient liquidity and are not pressured to fight over clients' money, and are not forced to cut interest rates on loans, because competition is limited by the much stricter lending criteria, informs the same source. According to Nicolae Cinteza, head of the central bank's supervisory department, this is a sign banking activity has resumed. Provisions remained on the rise, but the operating income successfully overcame the financial loss. Loans started to pick up, and banking activity has resumed on several segments, he said. The 42 local banks reached a net aggregate profit worth some 100 million euros in the first quarter this year, after having reported a net loss amounting to 50 million euros in the first three months of 2009, whereas provisioning costs did not pose so many problems anymore. The profit was also higher than the one reported in Q4 2009 of only 22 million euros. BNR data show bankers have started extending loans especially on the corporate segment and the demand is almost exclusively focused on foreign currency-denominated financing. However, banks have started to promote retail loans over the past months as well. Also Cinteza has recently mentioned the revival of the loan commercials after a one-year break, explaining that bankers’ appetite for selling loans shows there are no problems in the system. Source: Agerpres.
RCA insurance polices to be issued electronically as of January 1
The RCA insurance polices will be issued electronically in Romania, as of January 1, 2010, according to a release of the Insurance Supervisory Commission (CSA). By issuing the policies electronically, CSA expects fewer instances of human error being recorded in filling out RCA policies and also an increased CEDAM database accuracy. The database was aimed at offering a centralized recording system for the mandatory civil liability car insurance policies (RCA) contracted in Romania. Source: Agerpres.
Three new players in life insurance market
Three new players entered this year the life insurance market, despite the 10% decrease thereof due to rising unemployment and plunging incomes of the population. The new entrants are Aegon Insurance, controlled by the Dutch from Aegon, BRD Life Insurance – a member of French group Societe Generale, and Ergo Insurance, controlled by Germany’s Ergo (the majority shareholder of which is reinsurer Munich Re). According to the legislation in force, the minimum required share capital to establish a life insurance company is 12 million lei, reports daily Ziarul financiar. In the first nine months of this year the life insurance market got close to 1.2 billion lei, 10% below the level of the similar period of 2008. The largest companies in the industry are ING, AIG Life (that changed its name to ALICO) and BCR Life Insurance. Source: Agerpres.
