BNR: bank debtors may default on 5.2% of bank loans in Romania by Dec 2021

The share of non-performing loans (NPL) would increase to 9.2% at the end of 2021 and 9.9% at the end of 2022, from just under 4% currently, according to the baseline stress test scenario carried out by the National Bank of Romania (BNR) and included in its 2020 annual report, quoted by Ziarul Financiar.

This means that the debtors would default on loans amounting to over 5% of the current loan portfolio by the end of the year, and, furthermore, the situation would not improve over the next year.

On the contrary, the NPL ratio would come close to the double-digit region by the end of 2022.

This would lead to a repositioning of the indicator in the high-risk category, according to the approach used by the European Banking Authority.

The deterioration of the bank loans portfolio coincides with the exit from the loan repayment moratorium.

The main sectors of activity with financial difficulties that have resorted to the moratorium on deferred payment are the manufacturing industry, real estate and wholesale and retail trade.

To a lesser extent, accommodation and restaurant services, construction and transport and storage services were also affected.

The NPL rate remained below 4% in the first four months of 2021, standing at 3.94% in April.

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