The risk that the Romanian market gets contaminated by the US subprime mortgage crisis is low, Alpha Bank Romania Executive President Sergiu Oprescu told a business summit on Wednesday.
“We are not yet exposed to shocks, but we must stay vigilant and can expect precaution in lending,” said Oprescu at the Investment and Business Summit, organized by the European Finance Convention. According to Alpha Bank, at the end of H1 of 2007, the population’s mortgage credits stood at €11.2 billion ($15.1 billion), of which €6 billion in foreign currency.
Alpha Bank estimates that the aggregate mortgage loans are secured with some 270,000 residences, accounting for 10% of Romania’s total housing stock fit for mortgaging, that is buildings meeting the banks’ requirements on age and technical parameters.
The mortgage credit came in use in Romania in 2001. Due to the restrictive disbursement terms and the steep increase in house prices in the last years, the amount of the mortgage loan stands below 50% of the market value of the house, specified Oprescu. In Romania, the effects of the US financial crisis were noticeable mainly on the currency market, where the local leu lost 10%, and on the capital market amid foreign investors’ growing risk aversion. (people.com.cn)