Banks worried about 850 million euros lent for malls in Bucharest

Eight banks have granted 850 million euros in financing for the malls in Bucharest over the last four years. Sun Plaza, the latest such project, is a bet of the Austrians at Erste and Vienna Insurance Group.

The Germans at Hypo Real Estate, Eurohypo and WestImmo, along with the local subsidiary of UniCredit group, UniCredit-Tiriac, are the banks with the highest exposure to the malls in Bucharest, which required 850 million euros in loans, an analysis by Ziarul Financiar reveals.

Mall owners borrowed money to buy, build or refinance their shopping centres, a business that is becoming less and less certain at this time, when consumer spending keeps dwindling. Therefore these banks are the most worried about the future performance of the malls in Bucharest, a market with a 1.5-2 billion euro consumption, which doubled over the last two years.

How do banks end up dependent on the spending of the consumers they have been only sporadically financing over the last two years? Repayment of the tens or even hundreds of millions of euros granted for the malls is directly connected to the first link in the client - tenant- mall owner - lending bank chain.