PwC: Romania NPLs Up 67% On Year In 2010

04.14.2011 By Florentina Dragu

Romanian non-performing loan market (NPL) rose 67% on the year to EUR5 billion in 2010, the fastest growing pace across 13 European states included in a report from tax and consultancy firm PricewaterhouseCoopers.

Romanian non-performing loan market (NPL) rose 67% on the year to EUR5 billion in 2010, the fastest growing pace across 13 European states included in a report from tax and consultancy firm PricewaterhouseCoopers.

Citing data from Romania's central bank, PwC said local NPLs may have exceeded 10% of the total loans in 2010, up from 7.8% in the previous year, driven mostly by defaults in retail loans.

At the end of 2008, the NPL ratio was 0.32% of total loans granted by non-government credit institutions, the report noted.

"Overall, we expect the NPL market will continue to register growth in default rates since lending criteria have historically been very weak. We see little change in the market for mortgage assets, as we expect that the banks will continue to work out the loans internally," PwC said.

PwC's report includes data from 13 European states, namely Romania, Germany, UK, Spain, Italy, Ireland, Greece, Russia, Poland, Ukraine, the Czech Republic, Hungary and Turkey.

Germany posted the highest value of NPLs in 2010, of EUR225 billion, followed by the UK with EUR175 billion and Ireland with EUR109 billion.