BOSNIAN BANKS TO INCREASE INTEREST RATES ON ALL LOANS

SARAJEVO, Bosnia (July 14,2008) - Some banks operating in Bosnia have increased their interest rates, after the latest Euribor increase. In June, the European rate was up to 5.1 per cent (compared to 1.9 per cent from March 2004).

Those banks that failed to revise their rates now say they are watching the market closely, and do not exclude the possibility of doing the same subsequently. Depending on the bank, the new rates apply to new loans only or to those that had been signed earlier, as well.

Raiffeisen bank’s PR office said their interest rate would be adjusted for each contract individually, and new rates will apply from August 1. They also said giving an average rate of increase is impossible at the moment. The bank also underlines that interest on mortgage loans would not change, as well as that a revision is unavoidable.

Volksbank increased its rates on July 1, and Nova banka will do the same on September 1. A decision by Hypo Alpe Adria banka is expected in the following days.
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