Proposals for relaunching the residential construction sector in Romania

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Proposals for re-launching the residential
construction sector in Romania
Bucharest - 2009, March 25th
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Summary

• RE-LAUNCHING THE LENDING
• MAINTAINING THE LIQUIDITY IN BANKING SYSTEM
• DECREASING THE LOANS INTERESTS
• RE-SCHEDULE THE NON-PERFORMING MORTGAGE LOANS

2/12
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Re launching the lending (I)

• GOVERNMENTAL GUARANTEES
• Founding a Guarantees Fund for individual with
  admission
• based on eligibility criteria (like age,
  social stage, no of
• properties, working experience, etc)
• FINANCING SOURCES
• Decreasing the MRR
• New public debt dedicated to kind projects
  financing
• Financing lines from BEI, BERD, ECDB
• INTEREST SUBSIDIZING
• Up to 10 / year for loans in local currency,
  granted
• directly to the individuals through decreasing
  other taxes
• (ex salarys taxes)

Individuals
3/12
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Re launching the lending (II)
Companies

• GOVERNMENTAL GUARANTEES
• Founding a Guarantees Fund for companies with
  admission
• based on eligibility criteria (profitability
  ratios quality of
• activity and financial behavior' ratios,
  etc.)
• Decreasing the costs of FNGC IMM destination
  real estate
• residential developments (currently 4)
• Setting up of a range of maximum prices,
  function of location
• and works quality for real estate development
  companies
• FINANCING SOURCES
• Decreasing the MRR
• New public debt dedicated to kind projects
  financing
• Financing lines from BEI, BERD, ECDB

4/12
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Re launching the lending (III)

• ADMINISTRATIVE ACTIONS
• Easiness of land acquisition settlement and
  utilities
• connections
• FISCAL ACTIONS
• VAT compensation with other tax category, more
  favorable
• conditions for depreciation recognizing,
  fiscal facilities for
• investment in assets restructuring
• INTEREST SUBSIDIZING
• Up to 10 / year for loans in local currency,
  granted directly
• to the companies through decreasing other
  taxes

Companies
5/12
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Summary

• RE-LAUNCHING THE LENDING
• MAINTAINING THE LIQUIDITY IN BANKING SYSTEM
• DECREASING THE LOANS INTERESTS
• RE-SCHEDULE THE NON-PERFORMING MORTGAGE LOANS

6/12
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Maintaining the liquidity banking system

• DECREASING THE MRR
• SYSTEM releasing the correspondent quota for new
  mortgage loans granted to individuals and
  companies.
• MONITORING monthly report send to NBR
• NEW PUBLIC DEBT DEDICATED TO KIND PROJECTS
• FINANCING
• FINANCING LINES FROM BEI, BERD, ECDB

Liquidity
7/12
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Summary

• RE-LAUNCHING THE LENDING
• MAINTAINING THE LIQUIDITY IN BANKING SYSTEM
• DECREASING THE LOANS INTERESTS
• RE-SCHEDULE THE NON-PERFORMING MORTGAGE LOANS

8/12
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Decreasing the loans interests
EU
ROMANIA
CDS gt6!
Cost of finance
Cost of finance
2 6 2 0,5-1 10,5-11
2 0 0,2 0,5-1 2,7-3,7
EURIBOR CDS RMO SPREAD BANCAR TOTAL
EUR
16,35 0 2 1,5-3,65 19,85-22
ROBOR CDS RMO SPREAD BANCAR TOTAL
RON

• Solutions
• IMPROVING THE PROGRAM BANCA PENTRU LOCUINTE
  by increasing the governmental
• premium
• SUPPORTING THE RON LENDING through the packages
  of measures for individuals and
• companies

9/12
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Summary

• RE-LAUNCHING THE LENDING
• MAINTAINING THE LIQUIDITY IN BANKING SYSTEM
• DECREASING THE LOANS INTERESTS
• RE-SCHEDULE THE NON-PERFORMING MORTGAGE LOANS

10/12
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Reschedule the nonperforming mortgage loans
Individuals

• Grace period granted at the beginning of the
  schedule
• Re-schedule the loan by extending the maturity
• Conversion of the loan currency in other
  currency
• Freezing the loan repayments up to 6 months

Companies

• Transfer of the debts from the company to the
  shareholder / administrator
• Grace period granted at the beginning of the
  schedule
• Re-schedule the loan by extending the maturity
• Conversion of the loan currency in other
  currency
• Freezing the loan repayments up to 6 months

• Criteria
• 3 installments not paid
• The client is requesting loan re-schedule
  solutions for avoiding permanent default

11/12
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Thank you for your attention !
12/12