OTP Bank Romania starts foreclosing procedures against bad debtors

“We have restructured around 2,000 loans. We have started the foreclosing procedures against borrowers who didn’t make their payments not even two months after being subject to restructuring procedures”, said Laszlo Diosi, CEO of OTP Bank Romania.

Borrowers are facing financial hardships and stopped making their monthly payments since the beginning of the year due to the steep devaluation of the local currency and pay cut. However, the banks were forced to set up huge loan loss provisions and sought to help their clients by offering the possibility of restructuring the loans.

Year, to-date, the local subsidiary of OTP group has tried to ease the debt burden of nearly 2,000 clients unable of making their payments, but was also forced to increase its loan loss provisions to 6.8 million euros.

OTP Bank Romania plans to thoroughly analyze the current credit and financial data of loan applicants to evaluate the lending risk, as well as to cut back on unsecured lending.

“We have no intention of relapsing to the early stages of the consumer lending industry or to grant unsecured loans. Nevertheless, we will continue selling credit cards and to cap the overdrafts, but only after an in-depth evaluation of the credit profile”, said the head of OTP Bank Romania.