The non-performing loan (NPL) ratio reached 12.4% at the end of May, down 7 percentage points compared to the same month of last year. Compared to April, the bad loan rate decreased by 0.7pp.

The Central bank has been asking banks to recognize bad loans and remove them from their portfolios so that the NPL rate drops below 10% this year.

The central bank is trying to strengthen the banking system, by forcing the players that can’t support their business with additional capital to exit the market.

Bad loans represent loans that are overdue by more than 90 days for which recovery actions have been initiated.

editor@romania-insider.com