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Mortgage boom in Emilia Romagna, trust is back
05 February, Il Resto del Carlino
According to the latest figures from Prometeia and Unioncamere, Emilia Romagna has just surpassed the other driver of the Italian economy, Lombardy, in terms of GDP. In fact, Emilia-Romagna has reported a +1.9% growth in the last year and +1.8% for the current year, while Lombardy is stuck at 1.8%. The data ends for good the longest and most dramatic economic recession the country ever recorded and “it signs the begin of a solid growth for Emilia-Romagna, confirmed by the number of the GDP and of the export”, comments Antonio Patuelli, at the guide of Abi, the Italian banking association. Patuelli, originally from Emilia-Romagna, is particularly happy with the results concerning credit for the first quarter of 2017 of his region.
Emilia-Romagna has become the main driver of the Italian economy. Is such a result due to companies, families, or banks?
“It’s due to a virtuous circle included in a system that has always been excellent. The international situation has helped a lot: 2017 was a great year, recording excellent performances in the export and tourism sectors. Even construction and real estate, that suffered from the recession for many years, have managed to recover a little. In conclusion, we’ve turned page, and this reflects in all the economic sectors”.
Even though the deposits of families have slowed down a little in the first part of 2017…
“It means that companies set aside less liquidity because they used a bigger part for investments. For what concerns families, a part of the liquidity was used to buy houses since the time of mortgages financing 100% of the purchase is definitely over. The increase of mortgage loans confirms that this is the right moment to apply for a mortgage, being interest rates so low”.
The numbers are positive also regarding bad loans.
“Yes, because the numbers in Emilia-Romagna are improving. The rate of the new mortgages is set at levels similar to those before the crisis of 2008. The parameter regarding funding to construction companies has decreased, going from 9.4% to 8.2%”.
The situation is not that positive in Marche.
“Here, the manufacturing sector is not so solid as in Emilia-Romagna. Moreover, Marche is one of the regions that suffered the most from the banking crisis. However, even here the figures concerning deposits, that decreased from 3.7% to 2.2%, can be explained by the increased tendency of investing rather than setting liquidity aside. Regarding the ratio between new bad loans over investments, in Marche, this parameter has decreased for families (1.8%), while it has slightly increased for companies (4.8%).
Speaking about banking crisis, in the last few years Marche and Emilia-Romagna have been impacted by it pretty badly, with inevitable loss of trust by money savers towards banks. Do you think the trust has been regained?
“The answer is in the figures regarding the increase of collections. Already in 2016, considering that the crisis exploded in 2015, deposits started to grow, and money savers are more trustful nowadays. After all, if deposits are growing, it means that there is money to deposit along with the trust of the person who deposits that money. European authorities guarantee the wellbeing of the banking system, and it is confirmed also by Banca d’Italia”.
Your pleas for transparency in the baking system have always been very strong. Do you think that they’ve been acknowledged?
“There is no doubt that Italian have become more cautious. Moreover, the Mifid 2 has just been introduced, namely the new prudential regulation of the relationships between who sells financial products and who wants to buy them. That doesn’t concern banks only”.
Indeed, but for money savers is not easy to deal with forms and charts.
“Mifid 2 must not be seen as more paperwork, but as an increased awareness of the consumer when buying a financial product. Almost all of us have a driving license that we obtained by passing an exam. In the same way, the terms and conditions must be carefully written, the applications must be evaluated one by one, in order to acknowledge the implications of the financial investment. I recommend everyone filling personally these forms, not only signing them”.
Perhaps, it’s better to get the help of a clerk in the branch. But with the advancement of digitalisation, will the physical branch disappear?
“Nowadays, the competition is fierce, traditional banks are expanding their online services, and online banks are opening physical branches in order to be closer to their customers. There is a wide choice for the consumers, but the physical branch will survive, even though in a limited number”.
Source: Il Resto del Carlino
Translator: Cristina Ambrosi