The non-performing loans (NPL) ratio dropped to 9.9% in Romania at the end of November last year, according to data published by Romania’s National Bank (BNR).

The NPL rate decreased by 3.6 percentage points from the beginning of 2016 until end-November, reports local Ziarul Financiar. BNR has pressured local banks to recognize bad loans and quickly remove them from their balance sheets.

The NPL ratio rose sharply during the crisis years to a maximum of 25% of the total loans. The local banking system had one of the highest NPL rate in the region back then. By comparison, non-performing loans had a share of only 2% in Romania before the crisis.

Banks' balance sheets started to look better starting the second half of 2014. In recent years, Romania has been leading the region for the sale of bad loans, surpassing countries such as Poland or Slovenia. Local banks sold non-performing loans of EUR 1.2-1.3 billion last year, and experts expect the transactions with NPLs to continue next year, but at lower values.

editor@romania-insider.com