Overdue loans climb to 1.7bn euros at the end of October

25 nov 2009 Ziarul Financiar

Romanian companies and the individuals had 7.2 billion RON (1.7 billion euros) in overdue loans to banks in October, almost three times more than in October 2008, amid a rise in the number of the unemployed and of bankrupt companies, and amid a decline in available income. The volume of overdue loans rose by around 700 million RON, according to data from the NBR (National Bank of Romania). Analysts say the rate of increase in overdue loan is showing signs of flattening, although the rise will not stop until mid next year. "There will be further fluctuations, but the trend goes towards a flattening. The unemployment increase rate has already slowed down and we should see a similar trend as far as overdue loans are concerned in the coming period," says Nicolaie Chidesciuc, chief-economist of ING Bank. The biggest overdue payments were recorded for RON-denominated loans, exceeding 4 billion RON, i.e. 5% of the overall loans granted on this segment. Overdue loans in foreign currency saw the fastest rise, climbing 3.8 times in the last few months of 2008 and in the first part of this year, amid a steep depreciation of the RON. Overall, the share of late payments in the total volume of loans climbed in October to 3.55%, which compares with 3.25% in September and 1.28% in the similar month of last year.