The NPL ratio of the retail lending, however, was lower, peaking at 10% in March 2014, according to the data Romania’s central bank supplied to ZF.
The sluggishness of the economy during the crisis years affected the banking sector, as well, with the system-wide NPL ratio going beyond 20%. One in five loans turned sour during the crisis. Loan portfolios tended to rapidly deteriorate and the process was much faster than on any other market in the region, so the NPL ratio kept rising until last year.
The NPL ratio in the system rose from 2.8% in 2008 to more than 22% in the spring of 2014. Banks have been cleaning up their loan portfolios so the NPL ratio dropped to less than 14% in the first quarter of 2015. NPL ratio stood at 13.8% in March, while the loan-loss provision coverage ratio remained high, 70.2%, according to the central bank.
(English version by Loredana Fratila-Cristescu)