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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