Loading ...Personal and corporate loans denominated in the local currency that are in default in Romania recorded a surge of 143% this August, year on year, according to data with the National Bank of Romania (BNR).
Loan applicants paid back forex-denominated loans more easily, and the default rate in their case was only 81%.
The aggregate value of the loans in default (both RON and forex denominated) was 123% more in August 2008 than in August 2007.
The aggregate value of both individual and corporate loans of both RON and forex-denominated loans stood at RON 1.92 billion (nearly 545 million euros). The value was up 9.44% from July’s RON 1.75 billion (nearly 497 million euros).
The aggregate value of the loans in default (both RON and forex denominated) was 123% more in August 2008 than in August 2007.
The aggregate value of both individual and corporate loans of both RON and forex-denominated loans stood at RON 1.92 billion (nearly 545 million euros). The value was up 9.44% from July’s RON 1.75 billion (nearly 497 million euros).
“Given the starting base, the rise is obviously huge. Yet, there is no danger as far as bad loans are concerned, because they are still at a low level as a percentage of the total of loans granted.
Moreover, we have to compare the situation in Romania with the situation in other countries in the region, and then we will see that Romania is above the European average,” Alpha Bank Chief Economist Ella Kallai told daily Ziarul financiar on October 20.
Moreover, we have to compare the situation in Romania with the situation in other countries in the region, and then we will see that Romania is above the European average,” Alpha Bank Chief Economist Ella Kallai told daily Ziarul financiar on October 20.
As a percentage of the total loans, loans in default made up 1.04% in August 2008, up from 0.7% the year before. Analysts argue there is no reason to worry about the slight increase of the outstanding loans, because crediting is expected to advance 70% a year.
Forex-denominated loans are faring better than RON-denominated ones. The percentage of forex loans in default in the total of forex loans was 0.48% in August, compared with 1.72%, as was the case with RON-denominated loans.
Forex-denominated loans are faring better than RON-denominated ones. The percentage of forex loans in default in the total of forex loans was 0.48% in August, compared with 1.72%, as was the case with RON-denominated loans.
In terms of outstanding repayments, RON installments recorded the poorest results. Almost 75% of the outstanding repayments were recorded in relation to RON-denominated loans, with a negative balance of RON 1.43 billion (nearly 407 million euros), compared with a negative balance of RON 488 million (some 138 million euros) in the case of forex loans.
Analysts argue that forex loans outnumbering RON-denominated loans is because forex loans are generally long-term, secured loans, while the RON-denominated ones are consumer loans. Total forex loans reached 28.6 billion euros in August 2008, while RON loans neared 23.6 billion euros.
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