Non-performing loans ended up amounting to one third of theportfolio of non-bank financial institutions (NBFIs) double as muchas in the summer of last year, and almost five times more than twoyears ago. This progression is another blow dealt to financingcompanies, after the 72% decline of the leasing market in 2009,which followed increases of over 40% a year.
Therefore, according to Adriana Ahciarliu, secretary general ofthe Association of Financial Companies (ALB), which includes 98% ofleasing companies and the largest players on the consumer loanmarket, non-performing loans accounted for 33% of the NBFIs'portfolio. Last summer, they made up 15% of the overall portfolio,from 7% two years ago. In the banking system, non-performing loanscurrently account for 15% of all loans.
"This is a very high level. The main problem is that compulsoryexecution of bad payers takes very long, months even, which leadsto an increase in the loan-loss provisions allocated by NBFIs. Thatis why shareholders need to come up with fresh money, which willlead to a rise in financing costs for new clients," Ahciarliuexplains.
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