Credit in foreign currencies continues to be an issue of both stock and flow, states the 2011 stability report published by the National Bank of Romania (BNR) yesterday. The weight with loans in foreign currencies in the balance of local banks is 62.9 per cent (June 2011) and such loans pose a higher credit risk compared to loans in the RON.
The rate of non-performance in this case is therefore higher or close to the one of RON loans, and the dynamic of the volume of bad loans in foreign currencies granted to companies is more accelerated than in the segment in RON (posting 185 per cent growth for foreign currency compared to a rough growth of 91 per cent in the case of loans granted in RON from December 2009 to June 2011), the report further notes.
The central bank says it will continue to closely monitor the trend of foreign currency lending and, as announced also with the previous report, will take the necessary measures to make sure any loans in other currencies are granted in such a way as to avoid the risks posed by debtors who are not covered against foreign exchange risk not being properly managed and accurately illustrated in the price of financial services. Financial stability in Romania has remained robust in the meantime since the previous financial stability report (out in August 2010), despite the difficult local and international economic circumstances characterising the year 2010. The credit risk continued to be the main vulnerable spot in the banking sector. The rate of bad loans reached 11.9 per cent in June 2011 (from 7.9 per cent in December 2009 and 11.9 per cent in December 2010).