Volksbank Romania has highest share of bad loans.

By bne IntelliNews September 9, 2010
Among the ten largest local lenders, Volksbank Romania has the highest share of bad loans, namely 21.6% -- loans under the category of doubtful and loss, according to a survey of Ziarul Financiar daily based on the data reported by banks; the rate was reported at end-Mar, as the bank has not revealed yet its end-Jun financials. Smaller banks face however higher problems, like Carpatica which has a bad loan share of 56%. At end-Jun, the average rate of bad loans for the local banking system was 17.5%, up from 11.3% one year earlier; we expect higher rates through H2 as the fiscal austerity package produces its effects (lower households' incomes, higher consumer prices). Other local banks with high rates of bad loans are BCR (Erste Group, 14.7%), BancPost (EFG group, 12.9%) and UniCredit Tiriac (UniCredit group, 10.9%). Interestingly, the banks with the worst quality of assets are also those where the retail customers are most aggressive in enforcing the new retail lending regulations (ordinance 50/2010). Volksbank and BancPost were also the banks with the highest expansion in terms of assets over the past years before 2008. However, while Volksbank has constantly reported high profit ratios also, BancPost recorded losses in the past years to break even only after the expansion on the credit market ended. The banks with the best quality of assets are Banca Transilvania (6% bad loans), BRD-SocGen (5.9%) and AlphaBank (5.8%).

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