The high leverage of many Romanian households, or high debts compared to assets, may push them into default if broad economic growth and expected revenues are not met, the central bank's chief economist Valentin Lazea stressed yesterday. He said that even if the banks do not face systemic problems following household default, the central bank will take steps to prevent such developments. Lazea estimated that non-government credit will increase by 20% to 25% this year after last year's 34% surge. The share of loans extended to individuals increased to 35% of total non-government credit at the end of last year, from 28% a year earlier. During the same public debate over bank credit, the president's advisor, Theodor Stolojan, former Prime Minister and Finance Minister, accused banks of greed, and of charging high lending rates and countless fees to the boundaries of legality.
Bank Asya, which was formerly known as Asya Finans, announced that it started preparations for an initial public offering. The bids will be collected through the end of April. The capital of the bank, which operates according to Islamic rules, will be raised by 20% to 300 million Turkish lire ($223 million) during the public offering. In addition, 3% of shares held by current shareholders will be offered for sale during the IPO and the free float rate will be 23%.
News from Euromoney Group sources