Bad loan ratio in the bank’s books started to increase gradually from the beginning of the year, the process being fueled by the sharp devaluation of the local currency which caused many borrowers to default on their loans.
In January, the bad loan ratio stood at 0.48% and climbed to 0.63% in February, to 0.66% in March, 0.85% in April and 0.97% in May.
In June, it passed the 1% mark, reaching 1.03%. Analysts polled by Wall-Street said the non-performing loan rate is to increase further up to a peak we may see in early 2010.
The non-performing loan rate is likely to reach 15-20% of the Romanian banking system in mid 2010, due to the ongoing deterioration of bank assets quality in Eastern Europe, according to the latest Deutsche Bank report.
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