The central bank collected the preliminary results of the 40 banks on the Romanian market and found a record-high total loss of RON2.12 billion last year, almost three times as wide as in 2011.
2012 was the third year in a row when the overall Romanian banking system ended in red. Behind the steeper loss was the continued deterioration of the loan portfolio quality, as well as the decline in the volume of new loans and many banks sold packages of non-performing assets. Large banks and small ones alike recorded losses.
Romanian banks’ aggregated loss amounted to RON777 million in 2011 and to around RON516 million in 2010.
According to preliminary estimates of the central bank, the non-performing loan ratio climbed to 18.2% system-wide at the end of last year, almost four percentage points higher than in the previous year.
The rise is not surprising given that the economy did not rebound, insolvencies continued to appear, and many of the loans restructured in the first years of crisis were in default again. The banking system was also shaken by several cases of fraud currently still being investigated, while the high non-performing ratio suggests weaknesses in the risk assessment systems.
Amid losses of RON2.1 billion, the system’s return on equity remained at minus 5.4%. As in previous years, the central bank continued to press the shareholders of banks with negative results to add to their capital, so the system’s average solvency ratio remained at 14.6% at the end of the year.
(English version by Daniela Stoican)