Individuals totaled RON11.7 billion in past due loans, up 22% on February 2013. However, this is the lowest growth rate during the crisis. Overdue loans had gone up 30% in the previous year.
Overdue loans accounted for more than 11% of the retail loan stock of banks and non-bank financial institutions (NBFI) at the end of February. Retail loan stock stood at RON109 billion at the end of that month.
Past due loans taken out by consumers increased almost 20-fold during the crisis from RON600 million in 2009, while retail lending was flat, relying on mortgage loans alone. Bankers set aside RON36 billion as (retail and corporate) loan-loss provisions. The volume of corporate and retail troubled loans stands at RON44 billion.
Analysts expect that after the slowdown of the past due loan increase rate last year, things would soon stabilize and the troubled loan share in the total would go down as the economy recovers, bringing a lending rebound with it.
“I don’t think non-performing loan stock continues to cause trouble for the lending business, since it has already been provisioned for,” says Vlad Muscalu, chief economist of ING Bank.
(English version by Loredana Fratila-Cristescu)