“The non-performance in the system exploded, [the ratio] was 21.6% in September. But the growth in October was very small, of just 0.1 percentage points,” said Nicolae Cinteza, the head of the central bank’s Supervisory Department.
“I think [the non-performing loan ratio] will continue to grow next year at a pace similar to that in October this year.”
Cinteza said he is not worried by the high level of NPLs, as the central bank also included in its analysis the level of provisioning. “Banks provisioned 64% of the NPLs, and the difference is guaranteed with collaterals… A third indicator, the solvency ratio, shows the banks can absorb the losses that cannot be covered by the already-booked provisions and the collateral,” Cinteza said.
He said the central bank has recently checked banks in the system on suspicions they were deleveraging too quickly. “In September, we noticed a decrease by EUR5 billion in resources, of which EUR4 billion came from increases in locally-attracted funds, and EUR1 billion from switching from Romanian accounting standards to the IFRS international standards.”
The central bank official also said the Romanian banks will undergo a new series of stress tests and asset checkups in 2014.