Romanian banking system to end 2014 with over RON 2 billion losses

The banking system in Romania registered a RON 1.6 billion loss after the first nine months of this year, National Bank of Romania (BNR) Supervision Department Director Nicolae Cinteza said in the EU-COFILE seminar.

“On the ground of the high provisions registered, and many will follow, on September 30, 2014, the system recorded a RON 1.6 billion loss. It was natural! The massive provisions registered in the third quarter led to this loss. When the amount of RON 2 billion was mentioned, we did not have the audited figures. I believe the loss will easily exceed RON 2 billion overall in 2014,” Cinteza explained, Agerpres informs.

He also pointed out that the loan level went down from April to September, from 22.3 percent to 15.33 percent, and the provision cover level of non-performing loans stands at 66.22 percent.

In october, president of the Romanian Banking Association (ARB), Radu Ghetea, warned that the banking system will record huge losses in 2014 and will pay bill crisis, mostly banks. Largely, banking system pays crisis’ bill because all these provisions that we must make for bad loans mean the number of money that we did not have recovered from customers that went bankrupt, which, perhaps, we are not going ever to recover it at the initial value for the meantime. Because customers will not be able to move at all, or the guarantees that we have, no longer have the value that they had before” Ghetea explained.

At the end of 2013, 23 banks in Romania reported profit and 17 banks reported losses. The cumulated profit of the aforementioned 23 banks stood at RON 2.05 billion (EUR 450 million), whereas the other 17 banks registered losses of up to RON 1.55 billion (EUR 340 million).

 

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