Provisions set up by bankers to cover losses from bad loans climbed by 4.7% in March to a new high of almost 17 billion RON (4.1 billion euros), as loan portfolios continued to deteriorate, especially corporate loans.
In the first quarter of 2010 banks spent almost 2 billion RON (half a billion euros) to cover prospective bad-loan losses. The amount is lower than in the first quarter of 2009, according to data from the NBR.
In the meantime, banks also managed to improve their operating revenues, which enabled the overall banking system to record a 100 million-euro profit, compared with a 50 million-euro net loss in the first quarter of 2009, according to data from the NBR (National Bank of Romania).
"Everyone will have difficulties this year because a lot of loan restructuring was done in 2009, but it becomes difficult to do rescheduling after rescheduling," said a banker who preferred to remain anonymous.
Dominic Bruynseels, head of BCR, the largest bank on the Romanian market, has recently said provisions set up for retail loans could fall this year, as individuals start to adjust, but that problems linger on the SME segment, where demand is still weak.
Provisions set up by bankers to cover losses from bad loans climbed by 4.7% in March to a new high of almost 17 billion RON (4.1 billion euros), as loan portfolios continued to deteriorate, especially corporate loans.
In the first quarter of 2010 banks spent almost 2 billion RON (half a billion euros) to cover prospective bad-loan losses. The amount is lower than in the first quarter of 2009, according to data from the NBR.
In the meantime, banks also managed to improve their operating revenues, which enabled the overall banking system to record a 100 million-euro profit, compared with a 50 million-euro net loss in the first quarter of 2009, according to data from the NBR (Nat
