Romania had the worst non-performing loans (NLP) ratio in South-Eastern Europe in the first quarter of 2012, 20.1 percent from 15.6 percent in 2011 and 7.2 percent in 2009, according to Ensight Management Consulting, citing a recent study. Meanwhile, in the region, the average growth in these loans was of 7.3 percent, up 2.5 percentage points compared to 2009.

“Not surprisingly, the longstanding economic crisis in the whole European area has been seriously affecting credit quality. Following the 2008/09 period, non-performing loans increased rapidly across Central and Eastern European (CEE) countries, from 3.5 percent before the crisis to over 11 percent at the end-of 2011 in regional average,” according to Ensight Management Consulting.

European banks are more oriented towards adjusting payment terms, in general avoiding interest capitalization or refinancing, rather than towards selling non performing loans portfolios or enhancing collection activities, which are still relatively rare, according to the consulting company.

editor@romania-insider.com