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Banks have relaxed mortgage lending standards, tightening those for consumption

The credit institutions have relaxed the lending standards in the third quarter of this year for mortgage loans and tightened those for consumption, National Bank of Romania (BNR) report reads.

”The monetary policy or prudential policy decisions of the National Bank of Romania, the expectations regarding the real estate market, changing the competition in the banking sector, the expectations regarding the financial situation of the population and the risk associated to customer creditworthiness are the influencing factors of these developments,” the document shows.

The main factor mentioned by the credit institutions that led to the relaxation of mortgage lending standards in Q3 of 2017 is the increased competition in the banking sector. At the same time, the banks took into account factors such as BNR monetary and prudential policy decisions and expectations regarding the real estate market to set credit standards for this segment, the report also reads.

For the fourth quarter, the banks anticipate a significant tightening of consumer credit standards and their steady maintenance in mortgage lending.

 

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