“We have noticed a slight decline of non-performing loans lately,” Mihaescu told ZF in an interview. The capital adequacy ratio has remained rather high in the meantime, which she says was why the bank did not have a very active response to the crisis. According to her, Romanian banks were well capitalized, well supervised by the central bank, and their management started the loan restructuring early on. “It now remains to be seen if these restructured loans perform, if the restructuring has been conducted on a truly economic basis,” she adds.
Mihaescu says the IFC mission is currently in talks with a bank
in view of potentially taking over non-performing loans in one
economic sector, without providing further details.
As for increasing IFC stakes or prospects of IFC becoming a
shareholder of Romanian entities, Mihaescu says there have been no
such talks.
At the end of April, non-performing loans in the banking system totaled 45 billion lei (EUR10.6 billion), accounting for around 22.4% of all loans.
The investment arm of the World Bank has $630 million worth of exposure to Romania, around 70% of which to the financial system and the rest to energy, retail, logistics and health. The institution has also arranged syndicated loans amounting to $100 million. IFC holds 3.5% in Banca Transilvania and 15% in ATE Bank Romania.
The investment arm of the World Bank has shown willingness to help banks process non-performing loans and invested in funds that handle restructuring of non-performing loans. However, no Romanian bank has so far resorted to the IFC program of taking over toxic assets. (EUR1=RON4.2233)