Mihai Busuioceanu (Raiffeisen Bank): NPLs deals will continue in Romania as market matures

The transactions involving non-performing loans (NPLs) will continue on the local market, with prices ranging depending on the size of the portfolio, says Mihai Busuioceanu, vice president in the risk division of Raiffeisen Bank.

“It would be good to have in Romania to have an organized market for the sale of NPLs,” said Busuioceanu, during a press conference marking Raiffeisen’s 20 years’ presence on the local market. He cited the example of the Czech Republic, where banks have set up individual platforms for the sale of bad loans.

He said that the prices for portfolios of NPLs range from 2-3 percent to 35 percent of the total value of the loans, depending on its structure. The increase of transactions in this field also shows that Romania’s banking market matures, he added.

“Romania has one of the biggest costs for recovery from insolvency. On the other hand, at European level the sale of NPLs is encouraged. Probably, the sale on NPLs will continue this year and next year,” said the vice president.

He added that the bank has continued to record a reduction of its portfolio of loans in Swiss francs.

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Since 2017 to date, Raiffeisen has converted 1,993 loans from Swiss francs to RON with a combined value of EUR 78.5 million.

This year, the bank’s portfolio in Swiss francs stood at EUR 185 million, compared to EUR 449 million in 2008. The number of loans has fell from 11,600 in 2008 to 5,221 in 2017.

Speaking about the remaining stock of CHF loans, Busuioceanu said that more than half accounted for consumer loans.

Romania’s banking system recorded an NPLs ratio of 8.3 percent at the end of the second quarter of this year.