Holders of leu-denominated credit cards generated more than 90% of the NPLs, while the past due loans of the holders of foreign currency-denominated cards amount to only RON32 million equivalent.
“A higher NPL ratio for credit cards is normal, considering the risk profile of the product. Constantly educating customers is essential for the sustainable development of lending,” said Mihai Patrulescu, senior economist of UniCredit.
The NPL ratio stands at 16% for leu-denominated credit cards and 23% for foreign currency-denominated cards. Credit cards are precisely the lending product that caused the worst headache to banks, because its NPL ratio is the highest of all products. NPL ratio of the entire banking system stands at less than 20%.
Average interest on a standard credit card with a limit of RON5,000 amounts to about 25% per annum, compared with 12% for a consumer loan.
Banks once tried to sell credit cards as an option to consumer loans because applicants had to meet stricter requirements for the latter and not all of them did.
(English version by Loredana Fratila-Cristescu)