Quality of bank assets in Romania keeps deteriorating at steady pace in July

By bne IntelliNews October 4, 2013

The official NPL ratio reported by Romania’s central bank increased to 20.93% at the end of July from 20.3% a month earlier, while the cost of provisioning kept rising under both IFRS and RAS calculations at rates comparable to those seen in the past 12 months – according to our calculations based on central bank data.

The annual rise of NPL (non-performing loans) accelerated slightly to 3.63% at end-July from 3.54% a month earlier.

The stock of RAS prudential adjustments [calculated only for prudential purposes] increased by 22.5% y/y to RON 41.0bn [EUR 10.1bn] at the end of July. Prudential provisioning cost calculated under the RAS system [but not enforced under fiscal procedures] increased to RON 7,775mn - or 3.9% of the average bank exposure* in the past 12 months ending July vs. 3.7% z month earlier.

The IFRS [fiscal] provisioning cost, used for fiscal purposes, was RON 7,126mn – or 3.4% of the average exposure. The stock of IFRS provisions [adjustments for impairment] was RON 33.15bn [EUR 7.53bn] at the end of July. This was 15.9% of the banks’ exposure at the end of July – up from 15.7% a month earlier and 12.1% a year earlier.

* loans extended and sums placed

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