Romanian state bank CEC to boost lending after capital injection

Romanian state-owned lender CEC Bank will get a capital increase of RON 940 million (some EUR 200 million) that will allow it to grant new loans worth RON 30-35 billion (EUR 6.3-7.4 billion), CEC Bank president Laurentiu Mitrache said on April 17 in a meeting with entrepreneurs in Baia Mare, Ziarul Financiarreported.

The Government included in the 2019 budget planning a RON 940 million contribution to the bank’s capital.

CEC Bank is “less interested in making a profit and more interested in the cost-benefit ratio of the loans granted, and the benefits for the community,” the bank's official said.

CEC reached an advanced stage in completing the documents required by the European competition authorities to approve the capital increase as a legitimate investment of the state as an investor and not object to it as state aid, Mitrache announced.

He added that the credit market in Romania holds a strong growth potential, since the stock of loans is currently around 38-40% of GDP, compared to 100% in Central and Eastern European countries and 150% in Western Europe. Banks account for only 15% of the financing of the Romanian small and medium-sized businesses, with the remainder covered by shareholders, commercial credits or investment funds.

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