Romanian banks to remove EUR 1 bln of bad loans from their portfolios this fall

Romanian banks are expected to sell non-performing loans (NPLs) worth about EUR 1 billion, in nominal terms, this fall, either publicly or internally, through low-profile procedures, according to local Ziarul Financiar.

Local banks are being pressured by Romania’s National Bank (BNR) and by the European stress tests which are performed on foreign parent-groups to clean their portfolios fast, which will bring several NPL portfolios to the market at the same time.

BCR, Romania’s largest bank, has by far the largest NPL portfolio on sale, of EUR 550 million. BRD-SocGen, the second bank by assets, could sell at least EUR 100 million worth of NPLs, but this could go up to as much as EUR 200 million. Volksbank has a EUR 127 million NPL package for sale.

UniCredit Tiriac Bank, Raiffeisen and Banca Transilvania are also trying to get rid of their NPLs, but more quietly, through silent procedures.

In the first half of this year, NPL portfolios worth a total of EUR 600 million were sold in Romania, with some of the largest portfolios sold by BCR and Volksbank.

The total volume of loans granted by local banks to companies and individuals stood at some EUR 49 billion, in April this year, and the non-performing loans rate was 22.2%. This means almost EUR 11 billion worth of bad loans.

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