Banks set up loan loss provisions worth above 5.3bn euros (the RON equivalent) by late September, covering almost 11% of the amount of private loans.
Each quarter of this year, banks set aside 2.5bn RON to keep up with the rising risk of not recovering lent money. The provision building pace sped up from last year, when the average stood at 1.7bn RON per quarter.
As the weight of doubtful or loss loans went beyond 20% in late September, the provision volume climbed to 22.6bn RON (around 5.3bn euros), marking an increase of above 75% from a year ago.
Since the start of the year, bankers have piled up credit risk reserves worth almost 7.7bn RON (1.8bn euros). Pressure generated by the deteriorating loan portfolio quality has been kept high since the beginning of the year. Despite some initially upbeat expectations about the economy picking up in the second half, the wave of insolvencies among corporate clients, then the announcement about the public sector salary cuts and the VAT hike triggered new loan late payments.Agerpres, Mediafax, Romanian Vancouver Sun,Global News, Financial Times,Le Monde,Tribune, ,Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today
Each quarter of this year, banks set aside 2.5bn RON to keep up with the rising risk of not recovering lent money. The provision building pace sped up from last year, when the average stood at 1.7bn RON per quarter.
As the weight of doubtful or loss loans went beyond 20% in late September, the provision volume climbed to 22.6bn RON (around 5.3bn euros), marking an increase of above 75% from a year ago.
Since the start of the year, bankers have piled up credit risk reserves worth almost 7.7bn RON (1.8bn euros). Pressure generated by the deteriorating loan portfolio quality has been kept high since the beginning of the year. Despite some initially upbeat expectations about the economy picking up in the second half, the wave of insolvencies among corporate clients, then the announcement about the public sector salary cuts and the VAT hike triggered new loan late payments.Agerpres, Mediafax, Romanian Vancouver Sun,Global News, Financial Times,Le Monde,Tribune, ,Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today
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