“There were a few major cases of companies whose loans were restructured three or four times in the last two years, but which defaulted in the third quarter. This was caused by the prolonged recession we have experienced,” explains Dominic Bruynseels, CEO of BCR.
The BCR group reported a net loss of 91 million lei (EUR21 million) in the third quarter, compared with a profit of RON6 million in the similar period of last year, because of significant risk provision spending. The BCR set up RON663 million (EUR156 million) in loan-loss provisions between July and September, up nearly 8% on the third quarter of 2010.
“The provision rise comes especially on the corporate segment and we expect this trend to continue to manifest itself, but at a slower pace. On the retail segment one can notice an improvement in asset quality because the quality of loans granted in the last two years is very good thanks to the more cautious foreign-currency lending and to the lower indebtedness level,” specified the head of BCR.
Bruynseels says the resumption of lending will occur slowly, considering that at present only leu-denominated loans and corporate financing is sold. Although firms have been the main clients for loans in the last two years, the head of BCR says bankers are much more cautious when it comes to corporate clients at present because of the high default ratio.
(English version by Daniela Stoican)