Overdue loans in lei (retail plus corporate) climbed by 23.7%, similar to the 24% rise of overdue loans in foreign currency.
The bulk of overdue loans are in foreign currency. They account for over 60% of all past due loans. Things have turned around since the start of the crisis in August 2008, when almost 75% of overdue loans were in lei.
Since the start of the crisis, overdue loans in lei have increased nine-fold. Past due loans in foreign currency rose 40 times.
Over 45% of overdue loans in foreign currency have been taken out in Bucharest.
Banks kept waiting for clients’ payment behavior to improve, but clients’ ability to repay their loans worsened because of economic conditions. On top of this came a counterproductive approach from banks, which either transferred market shocks to clients or were not willing to adjust lending conditions to the actual ability of clients to pay back the loans.
(English version by Daniela Stoican)