Speaking at a finance conference, Sergiu Oprescu said the low debt recovery rate from insolvent companies has a negative impact on lending policies as banks try to avoid future losses.
“Our data show that almost 90% of the insolvent companies have ended in bankruptcy and the sums recovered doesn’t exceed 2% to 2.5% of the total debt to banks,” Oprescu said.
Loans to companies in insolvency process amount to EUR5.4 to EUR5.5 billion, or 10% of the overall private lending.
Total funds of some EUR25 billion are currently inactive due to the high number of insolvent or bankrupt companies. The figure equals around 20% of Romania’s gross domestic product, estimated at EUR140 billion.