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Raiffeisen Bank Romania cuts interest rates on Swiss franc loans

Raiffeisen Bank Romania cuts interest rates on Swiss franc loans cozyta/Shutterstock.com

BUCHAREST (Romania), January 21 (SeeNews) - Raiffeisen Bank Romania said on Wednesday it will lower interest rates on Swiss franc-denominated loans, starting on January 23, in order to lower costs for its clients, which have surged following the franc's recent appreciation.

According to the terms of the contracts, the operation of re-setting interest rates should have been carried out at the end of June 2015, Raiffeisen Bank said in a statement.

The most efficient way to support clients, however, remains loan restructuring, which has been available since 2009, the bank's Retail Banking Vice-President Vladimir Kalinov said in the statement.

Raiffeisen Bank has a reduced portfolio of franc-denominated loans, with a total of 8,800 clients, and all credits are backed by real estate mortgages.

Thousands of home-buyers in Romania took out Swiss franc-denominated mortgage loans over the past 15 years, attracted by the low interest rates offered by local banks for these type of credits.

On January 15, the Swiss National Bank decided to scrap a cap against the euro it introduced in September 2011. Following the decision the franc appreciated to 4.4354 lei on January 20 from 3.7415 lei on January 14, according to data from Romania's central bank.

On Tuesday, Volksbank Romania, which is in the process of being acquired by local blue-chip lender Banca Transilvania [BSE:TLV], said it has frozen the leu/Swiss franc exchange rate at the end-December level for its clients who have franc-denominated loans.

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