Trade companies have the lowest credit risk, Romania’s central bank data show. The NPL ratio in the real estate and construction sector fell to less than 10% nine months into 2019, going to 9.2% from 12.6% in the same time in 2018. In 2017, the NPL ratio in the construction and real estate sector stood at almost 30%.
“An analysis by sectors shows an overall decline in the NPL ratios. However, the real estate and construction sector continue to record the highest NPL ratio,” the latest financial stability report of Romania’s central bank reads.
Another vulnerability of the companies in the construction and real estate sector, according to the central bank, is that borrow mostly from abroad (61% of the total debt), so the foreign debt went up 10% compared with the previous year and the bank loans rose by more than 7%.
Industry records the second highest NPL ratio, 9.1%. Utilities and services sector saw the NPL ratio drop to 6.6% last year, below the 8.7% level of the first nine months of 2018. The same level, 6.6% is also where the NPL ratio for the agricultural companies dropped from 7.5% in the first nine months of 2018. Companies in the trade sector had the lowest NPL ratio, 6.1%, below the 8.2% in January-September 2018.
(English version by Loredana Fratila-Cristescu)