Romania’s banks struggle to remain profitable while their business is remaining steady

KUALA LUMPUR, Malaysia - July 10, 2013 - PRLog -- The stock of loans has remained steady over the past quarters but the share of bad loans has increased significantly diminishing the volume of revenue-generating loans. Depending on the methodology, the bad loans account for some 30% of total loans [loss and doubtful loans], 25% [loss-type loans] or 19% [standard NPL rate calculated by the central bank]. Amid this difficult situation, the banking system have still managed to achieve profits in Q113 after record losses in Q412. Their business volume is however not likely to expand, therefore further consolidation and network downsizing is expected. A couple of deals had already took over this year  – but they are more to portfolio of loans.

Distrust dominates the relationship on the credit market. Banks trying to recover the past losses from high loan rates do not help in this regard. Nor the companies’ reliance on insolvency procedures does. Central bank’s promise to cut the policy interest rates will also hardly improve the situation.

Read more from our analyst>> http://insighter.me/2013/06/12/romanias-banks-struggle-to-remain-profitable-while-their-business-is-remaining-steady-at-the-best/

         Romanian banks report deep losses in 2012, returns to profit in Q1/13.