The cumulated value of installments consumers and companies are late in paying topped 20 billion lei (EUR4.7 billion) in late August, accounting for 9.3% in the overall loan volume, according to central bank data.
Leu-denominated loans, which are largely unsecured consumer loans, are causing bankers the biggest headache, with the weight of past due installments on this segment going beyond 11%. For instance, past due leu loans in Bistrita, a county with a population of over 300,000, stood at 19.8% of the total at the end of August, while in Suceava (over 700,000 inhabitants) they reached 19.5% and in Galati (300,000 people) they were close to 18%. The largest overdue payments are generally registered in economically weak areas.
“Everything is closely related to the economic development of a region. A tight relationship between companies’ and individuals’ overdue payments is only natural, as in the areas where companies were in trouble the number of laid-off people was higher,” said analyst Dragos Cabat.
Bistrita-Nasaud and Suceava are two of the counties with the weakest economies, while Galati is dependent on two industries (steel and shipbuilding), affected by the crisis in 2009 and the first half of 2010.
In the case of foreign currency-denominated loans, there are also wide fluctuations in terms of the weight of overdue payments. Thus, while the national average revolves around 8%, there are counties such as Ialomita where the weight goes as high as 17%.
The cumulated value of overdue loan installments, in leu and foreign currency, climbed 36% in August compared to a year ago. While at the beginning of the crisis the fastest increase was registered by leu-denominated loans, in recent months delays in the payment of foreign currency-denominated loans have soared.
Overdue payments for foreign currency loans reached RON11 billion (EUR2.6 billion), while the cumulated value of past due payments for leu loans stood at RON9 billion, according to central bank data.
There are, however, counties where the weight of overdue payments is almost half the national average. For instance, in Gorj and Dambovita only 5.3% and 5.5%, respectively, of loans registered payment delays in late August.
(EUR1=RON4.3159)
(English version by Catalina Apostoiu)