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Romania 9-Mo Bad Loans Rise To 8.5% Of Total Lending Vs 3.5% In ’08

Romanian loss-classified loans amounted to 8.5% of the total lending at the end of September, from 3.6% of the total loans in the same period the year earlier, central bank first deputy governor Florin Georgescu said Friday.
Romania 9-Mo Bad Loans Rise To 8.5% Of Total Lending Vs 3.5% In ’08
10 nov. 2009, 14:59, English

„The standard loans amounted to 60.6% of the overall lending, down from 66.4% in September 2008, which means some loans were transferred to riskier categories, particularly in doubtful and loss-bearing categories,” Georgescu said.

He added doubtful loans reached 2.8% of the total lending in Romania in the first nine months, up from 1.2% in the same period of 2008.

In addition, substandard loans accounted to 7.4% of the overall loans end September, from 5.3% in September 2008.

However, watch loans decreased to 20.7% of the total loans in September from 23.5% in the same month the year before, Georgescu said.

„The good news is that the banking system’s profitability was positive, at 680 million lei (EUR1=RON4.2961) after the first nine months, despite a substantial decrease of over five times (on the year),” he added.

Overall net assets rose stood at RON322.46 billion at the end of September, 2.55% higher compared with the end of 2008.

Georgescu said the local banks are solid and their solvency ratio increased to 13.7% in September from 11.9% in the corresponding month the year earlier.

„All banks have solvency ratios above 10%, a very good level compared with the international standard (of minimum 8% – e.n.). The central bank has all required instruments to maintain banks’ solvency at appropriate levels,” he added.