“When financial reports of banks become available you will see I was optimistic when I estimated the loss at RON2 billion. Losses widened in November and December,” Cinteza said during a debate in parliament concerning loans in Swiss francs, in reply to a proposition of social democrat MP Ana Birchall.
Birchall had proposed that banks set up a social solidarity fund from their profits to intervene in social cases.
Cinteza explained the system’s massive loss saying banks have been forced to make large provisions to cover non-performing loans (NPL) and clean their balance sheets, a process that started in summer last year, following a central bank directive.
“The loss on November 30 was very large due to provisions, the NPL rate peaked at over 23%. The NPL rate reached 14.6% in November and dropped below 13% in December,” said Cinteza.
He added not all banks cleared their balance sheet by the end of September and had promised to finish the process by the end if the year.
Late November last year, Cinteza said banks in Romania had total losses of nearly RON1.6 billion at the end of September and the losses for the full year were seen exceeding RON2 billlion.
The Romanian banking system posted a profit of RON497 million in 2013, as 23 banks had a total profit of RON2.05 billion and 17 banks totaled losses of RON1.55 billion.
The banking system posted losses of RON2.3 billion in 2012 and of RON777 million in 2011.