Romanian banks sell EUR 682mn of bad loans in 2011.

By bne IntelliNews April 19, 2012
The Romanian banks sold out EUR 682mn worth of bad loans in 2011 as most of the transactions was closed in the fourth quarter when smaller banks aimed to clean their balance sheets before the years end, the Romanian association of debt recovery firms, AMCC, said as quoted by Ziarul Financiar daily. This was only 1.4% of the years average stock of bank loans, out of which 16.1% was classified as loss (over 90 days overdue payments) at the end of December. Overall, the AMCC members, who are estimated to cover some 80% of the market, purchased bad debt worth EUR 1.8bn in 2011, which was only 6% up on the year. The market has visibly slowed down from the 54% increase in 2010 and 76% rise in 2009. Further substantial growth in these transactions is expected only if banks decide to sell their claims against large companies and small and medium sized enterprises, according to AMCC. Lenders preferred selling only consumer loans but negotiations are under way for the sale of mortgage loans and corporate loans also. The consumer loans are sold at 5-8% of their nominal value, or even 3% for older loans, the daily reads, quoting unofficial sources. The price of higher quality loans would be significantly bigger, the source suggested.

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