Non-performing loans ratio down to 4.8% at end-Feb in Romania

Romanian banks continued to clean up their balance sheets and the average non-performing loans (NPL) ratio in the country’s banking system calculated under European Banking Association (EBA) methodology dropped to 4.82% at the end of February 2019, down from 4.95% at the end of 2018, according to Romania's National Bank (BNR).

The EBA NPL ratio thus dropped to the lowest level since the end of 2014, when it stood at 20.7%. Based on NPL reported under national methodology, the EBA NPL ratio can be estimated to have reached a maximum of just over 25% during 2014 when it peaked as a result of the 2008-2009 credit crunch and economic recession.

In related news, BNR reported the total amount of overdue loans denominated in local currency at the end March 2019 reached RON 4.92 billion (just over EUR 1 billion), up 0.27% compared to the reported amount in February, while the overdue foreign currency-denominated loans decreased by 2% month-on-month to RON 2.82 billion (EUR 600 million).

Total local currency loans reached RON 167.9 billion (up 1.35% month-on-month), while the volume of loans denominated in foreign currency was RON 89.7 billion at the end of March 2019 (up 0.89% month-on-month).

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