Bucharest, 29 October 2015 – Romania needs long-term savings in RON to grant loans in the domestic currency for longer periods of time, and building a yield curve for government securities in RON is a step in that direction. Out of the overall currently existing bonds issued in RON by the Ministry of Finance, only 7% are due later than 2025, as deriving from a BCR report conducted on the occasion of the World Savings Day.

“In other words, we need to seek lower dependence on foreign financing and to put in place financing for economic growth by resources collected domestically. At the same time, it is necessary to reduce long-term pressure on the public budget, by using alternative private systems relying on savings over several decades. The ageing population only adds pressure in that regard”, states the reports.

One of the alternatives for ensuring long-term housing investments consists of collective saving-crediting. Saving-crediting for the housing field witnessed consistent progress in recent years.  

The outcomes so far confirm it. The progress achieved by BCR Banca pentru Locuinţe (BCR BpL) until the present reveals a deposit balance of more than RON 2.6 billion. The portfolio of BCR Banca pentru Locuinţe includes over 386,000 saving-crediting agreements, with the value of the concluded agreements reaching RON 2.5 billion.

The portfolio of loans granted by BCR Banca pentru Locuinţe S.A. increased by 16%, exceeding RON 176 million.

“The intention to invest in house improvements continued to be high over the years, 56% of the population having that wish in the medium term (5 years), 29% in the short term (the following 12 months), while 71% of the people wishing to improve their housing comfort lack own funds necessary for the house renovation or redesign plans”, is stated in the survey conducted by IRSOP.

“Investments in the housing field, by creating domestic funds, sustainable in the long run, are a key requirement in improving the housing fund. Collective saving and crediting for the housing field generates such funds and provides solutions for tackling the housing challenges”, said Carmen Schuster, Chairperson of BCR Banca pentru Locuinţe. 

The following range among the most important housing improvement directions envisaged by our clients: house renovation, improvement of plumbing, electricity installation, heat insulation, load-bearing structure repairs, land acquisition, country house, heating, roof/terrace repairs, house acquisition, building a house, extending the current lodging. The survey indicates that 71% of the people already owning an apartment and 29% of house owners state that their lodging needs repairing.

Pursuant to the latest surveys, the housing fund in Romania consists of 22.7 million lodgings. Lodgings have, as an average, approximately 2.7 rooms, the total living area amounting to 398 million sqm. The average size of lodgings in Romania is 47.1 sqm. In EU, one individual has 1.6 rooms, while in Romania there is significantly more dramatic situation – one individual only has 0.9 rooms. The surface area per individual in Romania is 21 sqm, as compared to 36 sqm in EU.

The numbers above point to poor housing conditions in Romania, and an increase of the housing fund below 1% per year (2014 = 0.27%) is entirely insufficient in changing this status. Therefore, almost half (41.5%) of Romanian households face severe difficulties in the housing field: damaged walls, floors, joinery (52.3% of houses face challenges), inappropriate heating systems (50%), damp walls, floors or house foundation (40%), leaking roofs (27%), insufficient light (18%) or other issues (21%).

In the case of one quarter of Romanian households, the ratio between house quality and lodging costs is deemed less than satisfactory.

Saving-crediting products are products with a long lifecycle. Clients conclude a saving-crediting agreement for an amount reflecting their intentions in the housing area. A certain amount of money is deposited on a monthly (or annual) basis, into the account of the saving-crediting agreement, until it reaches a saved amount of 40% - 50%, depending on the type of saving-crediting agreement. This type of approach towards ensuring future housing comfort requires good planning of own resources and personal financial discipline over an extended period of time; furthermore, it encourages citizens’ own initiative to play an active role in improving their own housing conditions. 

The government encourages citizens’ effort of seeking to improve their own housing situation, by regular deposits, giving up immediate consumption in favor of long-term investments in the housing field. The government’s incentive for the citizens’ effort is in the form of a state premium (25%, no more than the equivalent of EUR 250/year for the amounts deposited every year). Upon the completion of the saving process and provided that the distribution conditions were fulfilled, the client becomes entitled to access a loan of 50% - 60% of the contracted amount from the savings-crediting bank. Both in respect of saved amounts, and for crediting, the bank provides fixed interest.

Banca Comercială Română (BCR), a member of Erste Group, is the most important financial group in Romania, providing universal banking operations (retail, corporate & investment banking, treasury and capital markets), and covering specialty companies working on the leasing market, private pensions and housing banks. BCR is Romania’s No. 1 bank in terms of asset value (€14,4 bn.), in terms of client base and in terms of savings and crediting. BCR is also Romania’s most important financial brand, judging by the client trust rate and by the number of persons who consider that BCR is their main banking partner.

BCR uses a network of 22 corporate business centres and 23 mobile offices devoted to corporate clients, and 509 retails units located in most communities inhabited by at least 10,000 citizens in order to provide a full range of financial products and services. BCR is Romania’s No. 1 bank running on the banking transactions market, since BCR customers have the largest ATM network at their disposal – nearly 2,000 ATMs and 13,500 POS terminals, enabling customers to use their cards for shopping purposes, as well as the complete Internet Banking, Mobile Banking, Phone-banking and E-commerce services.

Erste Group is one of the main suppliers of financial services in Eastern European Union. About 46,500 bank officers working in 2,800 branches in seven countries (Austria, the Czech Republic, Croatia, Hungary, Romania, Serbia and Slovakia) assist 16.2 mn. customers. Erste Group reported a total asset pool worth €202,6 bn. and a 56.1% cost-to-income ratio at the end of Q1 of 2015. First-ranking common equity index (Basel 3 implemented partially) has improved to 10.2%.

BCR – External Communication 

Cezar Marin, e-mail: cezar.marin@bcr.ro

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