The biggest bank of Romania has prepared a detailed report on loans granted and associated risks for shareholders. BCR in late 2008 had in its balance sheet loans included in the "doubtful" (a delay of over 60 days in repayment) and "loss" categories worth more than 933m euros, double the level of 2007, according to the bank's financial statements.
According to the NBR rules, doubtful loans must be 50% provisioned, while for those classified as loss provisions are 100%. The volume of provisions specific to the credit risk has doubled accordingly, to an equivalent of 631m euros. At the end of last year, the total provisions of the banking system amounted to 1.9bn euros, more than double the 2007 level.
Maximum exposure to a client amounted to 800.5m RON (201m euros), up 8.5% from 2007. Depending on the structure of the corporate loan portfolio, BCR's biggest exposures are to the trade sector (1bn euros), constructions (862m euros), public administration and defence (804m euros) and the food industry (541m euros).
At the same time, BCR's receivables from retail customers at the end of 2008 totalled the equivalent of 5.24bn euros, with this segment likely to feel the rising unemployment pressure, after the portfolio quality was hurt by RON decline coupled by raising interests. From this point of view, a respite period has already started. Loans granted to clients totalled 11.2bn euros before provisioning.
To support its loan portfolio and secure resources on a longer term, the bank further resorted to foreign financing, inclusively from its parent company, Erste Group.
At the end of last year, BCR had contracted loans from foreign banks, including international financial institutions, worth some 888m euros, at an interest rate ranging between 3% and 6.9% in euros and dollars and maturities ranging between June 2009 and October 2022. The biggest sum (253m euros) comes from a bank of Ireland. Compared with 2007, the volume of foreign financing dropped by over 280m euros, with a substantial loan taken out from a bank of Cyprus having been paid back.
In 2008, BCR also contracted two subordinated loans from Erste, both in RON and falling due in 2018.
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