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Banks in Romania to outsource NPL portfolios of EUR 1.6 bn

Domestic banks intend outsourcing some of the bad loans portfolios of EUR1.6 billion for 2017-2018, according to Top Factoring, one of the largest companies of the debt collection market in Romania.

Top Factoring specialists say that most of the 12 largest banks in Romania will outsource portfolios of bad loans in the future.

In 2016, the total value of outsourced portfolios of non-performing loans (NPL) reached EUR 1.1 billion and e transaction of EUR 310 million is on the way by year-end, Catalin Neagu, General Manager Top Factoring said.

NPL rate in the local banking system amounted to 9 percent in June, a level comparable to end-2008, when it stood at 8 percent, BNR first deputy governor Florin Georgescu stated in November during a press event.

According to central bank data, Romania recorded in November 2015 a NPL rate of 11.65 percent, while the highest level amounted to 22 percent and was recorded in 2013.

However, Romania’s largest banks will cut the large stock of problem loans on their books, Moody’s Investors Service says in a report published recently. According to rating agency’s analysts, Romania’s growing economy will gradually improve borrowers’ debt servicing capacity and create more opportunities for banks selling their problem loans.

According to Top Factoring analyse, Romanian debtor pays an average debt of RON 155.05 for telecom services and RON 307 to banks.

In telecom, Romanian debtor client has 43.4 yo on average and he has not paid the bill for a year and seven months. Best debtors in this area are artists, medical personnel and priests, and those who pay the least are those in high positions, athletes and entrepreneurs.

In banking, Romanian borrower customer has 43 yo and he has consistently paid his credit for about four years.

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