Non-performing loans up to 3% of BCR's retail portfolio

As a result of the default risk for unsecured consumer loans being no longer insured and the revision of client segments, non-performing loans in BCR’s retail portfolio have doubled from 1.5% to 3%, according to the annual 2007 report published by Erste Bank, the majority shareholder. On the other hand, the volume of non-performing loans remained stable as far as corporate funding, mortgage loans and collateralised consumer loans are concerned. However, the volume of unsecured consumer loans went up rapidly and reached 58% of the total loans granted to individual clients, showing that mortgage loans and collateralised consumer loans did not keep up the pace, despite the increase in housing loans by 76%. BCR’s retail lending picked up the pace last year, with the volume of such loans coming to account for 53% of the total loans granted by the bank. The volume of loans granted by BCR went up by 41% last year and reached a total of 10.9 billion euros. Lately, more and more people have been talking about the worsening quality of banks’ loan portfolios. An important factor is the significant upward trend of interests on both loans in RON and in euros, even in case of older loans. In addition, the steps taken to make loans on the domestic market more costly looks set to continue, given that the NBR has just upped the key-rate to 9.5% and the market is sensing increased pressure for RON.