Banks have lost patience with bad payers and sped up recovery after non-performing loans reached one fifth of the total loans. The major banks have set up their own portals where they post ads and information about prices, how to participate in an auction and where the properties are.
“Major banks postponed acknowledgement of the troubled loans for as long as they could but ended up in a position where they can no longer do that. Many acknowledged such losses in their financial statements, therefore have to take steps and sell the foreclosed assets,” financial analyst Dragos Cabat commented.
“Those that started the process will surely go ahead with it, while the small banks will have to follow suit.”
Romania’s largest bank by assets, BCR, has more than 1,700 houses and apartments for sale and hopes to collect EUR69 million for them. Non-performing loan rate reached a record high of 31% this June and is putting pressure on the management who decided to speed up foreclosure sales.
Most foreclosed homes are apartments, ranging in price from EUR3,000 to EUR275,000. The most expensive apartment that the bank wants to sell for EUR275,000 plus VAT is a four-room 155 square meter apartment in northern Bucharest near the Baneasa Lake.
The second largest bank in the system, BRD, has posted ads for more than 350 apartments on its websites and expects to get EUR12 million for them. It also has 450 houses for sale, and seeks to get EUR30 million.
The bank’s officials say they publish 65 new foreclosure sale ads every month. They sell about 30 homes each month, according to ZF’s calculations.
“BRD sold 50% more foreclosed properties in the first seven months of the year compared with the year-ago period,” BRD officials said. The bank did not say exactly how many homes that was, but ZF has calculated that it must have sold more than 200 based on the first-half 2012 figures.
The most expensive piece of property BRD has put up for sale is a 1,600 square meter landmark building in Bucharest. The bank hopes to get EUR2.5 million for it. The building belongs to a businessman and is used for a restaurant, but the bank has been unable to sell it so far.
Raiffeisen is promoting 427 homes on its website and hopes their sale will generate EUR11 million revenue.
There are not that many buyers on the market and the bank usually sells about 20 to 30 homes per month, Vladimir Kalinov, the retail VP of the bank told ZF in an interview. Some homes put up for sale are not foreclosed properties, but properties the owners want to sell after reaching an agreement with the bank, he added.
Banca Transilvania, too, has 393 foreclosed homes for sale and expects to get about EUR23 million for them. State-owned CEC Bank has fewer homes, about 70, whose market value is EUR2.5 million.
(English version by Loredana Fratila-Cristescu)