Bankers set more cash aside for future loan losses

Provisions made by banks soared 40.1% in first four months this year, from 10.63 bln lei (2.54 bln euros), the majority of the provisions for non-accrual loans and loss loans exceeding the decline of provisions for less risky loans, according to data made public by National Bank of Romania.

At the end of last year, the total value of provisions set aside by banks stood at 7.59 billion lei.

In April, the provisions made by Romanian banks increased by 3.7% from 10.25 bln lei a month earlier.

Compared to end-April 2008, when the total value of provisions stood at 4.62 billion lei, their value increased by 130.1%, NBR shows.

Nearly 81.5% (8.66 bn lei) of end-April provisions were destined for loans classified as loss loans, which are 90 days past due.

In case of substandard loans, provisions reached 431.7 million lei in the mentioned period, slightly lower than end-March, while for doubtful loans, banks have boosted their provisions to 585 mln lei, NBR informs.

For the loans classified as standard, provisions dropped at the end of April when compared to March, to 490 million lei, from 526.1 mln lei, while for close-watch loans banks set aside 465 mln lei, slightly down from a month earlier.


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