Danescu (ARB): Non-performing loans rate on Romanian market cut in half to 11.3 pct in June

Newsroom 27/09/2016 | 17:14

The non-performing loans rate (NPL) reduced to half compared to the level from the post-crisis period and reached 11.3 percent in June, according to the executive president of the Association of Romanian Banks (ARB), Florin Danescu.

„The clearing of balance sheets and the change of computation methodology of non-performing loans led to this reduction,” said Danescu for Agerpres.

According to the data of National Bank of Romania (BNR), the NPLs rate was 13.61 percent in 2015, a drop of 7.1 percentage points compared with the level from 2014.

Danescu also says that half of the NPLs from the banks’ balance sheets are generated by companies in insolvency.

He adds that BNR statistics show that NPLs from banks’ balance sheets in the SMEs segment amounted to 31.5 percent at the end of 2015.

„The banks’ prudence in giving loans to the real sector of the economy is determined by the corrupt financial discipline, the abusive manner of the companies of using the insolvency procedure in certain situations, as well as the financing constraints implemented during crisis,” said Danescu.

In these conditions, Danescu believes that some solutions for SMEs financing should be found.

Moreover, the ARB official said that the interests for the new loans in RON given by banks dropped significantly lately to an average of 3.49 percent per year.

Georgiana Bendre