Counting losses is bankers' new activity

Bankers’ new major concern is weighing losses from loans that
can no longer be saved, having moved on from loan restructuring,
says Dominic Bruynseels, CEO of BCR, the biggest bank on the
Romanian market. “At the current stage, we are concerned about how
big losses from unrecovered loans will be. The level of losses
depends greatly on quality of the collateral, but the trouble is no
one can tell how much the collateral is worth any more,” Bruynseels
says. The head of BCR says the growth trend of non-performing loans
continues on the corporate segment, whereas things have stabilised
on the retail segment. “The increase of non-performing loans could
be resumed on the individual segment, as well, if unemployment
rises, especially in the public sector.” However, Andreas Treichl,
head of Erste Group, majority shareholder of BCR, does not think
the level of non-performing loans accumulated in Romania is
alarming, and says it does not call for a capital increase at the
BCR. “The BCR does not urgently need a capital increase, although
non-performing loans have risen. We compare their share in the loan
portfolio with the interest rate margin, which is very comfortable
at the BCR, around 7-8%,” Treichl told ZF. Cristian Popa,
vice-governor of the NBR (National Bank of Romania), says the
volume of non-performing loans in the banking system as a whole is
manageable, and expects the slowdown of the growth rate to continue
this year.