Local lenders BCR, BRD, and Raiffeisen Bank will benefit from the robust growth of the Romanian economy in the process of cleaning their balance sheets of bad loans, according to Moody’s analysts.

The analysts also consider that the three banks’ profitability may be affected by the recent legal changes.

“The increase in Romania’s economy will lead to the gradual improvement of the debtors’ ability to pay and will create new opportunities for selling problematic loans,” according to Moody’s.

The non-performing loan (NPL) ratios of BCR, BRD, and Raiffeisen will drop by 2-3 percentage points in the next 12-18 months.

The bad loan share in the total loans granted by the three banks has significantly dropped in the last two years, according to Moody’s. At the end of June, the NPL ratio amounted to 14% for BCR, 14.4% for BRD. In the case of Raiffeisen Bank, Moody’s estimated a NPL rate of 8.5% at the end of last year.

editor@romania-insider.com