Large banks see because of provisions

Individuals’ overdue loan payments have started climbing again, as Government’s austerity measures are coming into effect, and high provision expenses come to eat up large banks’ entire operating incomes, says Nicolae Cinteză, head of NBR’s supervision department.

“Large banks are in the black from what they piled up in the first half of the year, but they have started raking up losses lately. Provisions are being set up as the effect of Government’s steps starts being felt. Individuals’ overdue payments are rising and the worst is yet to come,” Cinteză warns.
He says that there are significant losses in the entire banking system after the first seven months of the year, without specifying their level, yet.
In the first half, net losses amounted to 56m euros at system level, generally as a result of losses accumulated by medium-sized and small players, while large banks still reported profits.
Cinteză added that the provision outburst is now compounded by the impact of the ordinance regarding consumer loans, which is likely to generate significant losses to some players, if it is not amended.