BCR has rescheduled up to 20% of distressed loans

The CEO of Banca Comerciala Romana (BCR) lender, Dominic Bruynseels, says that some 10-20 percent of the loan files analyzed for clients with difficulties in repaying loans have been rescheduled. BCR, the country's largest lender, evaluated some 20,000 files, at the demand of clients. Most of these were consumer loans, and only 2,500 files were mortgages.

"We have standard proceedings for loan rescheduling. However, we also make exceptions and try to analyze each file in order to understand the needs of the customers. We cannot reschedule just any loan, because some clients are over-indebted," he said.

By the end of the first half of the year, poor performing loans made up 6.2 percent of the total financing granted by the bank, while their coverage ratio, with collateral and provisions, was 126 percent, according to financial data announced by BCR.

According to Bruynseels, most outstanding debts are registered on the retail segment, and their balance is set to peak early next year.  "We are pleased that we do not have many defaults on the corporate segment," he said.

In H1 2009, the bank sold loan packages that registered payment delays in excess of 180 days and with real estate collateral. The packages were sold in three tranches to a company within the BCR group, Bucharest Financial Plazza.

The value of total loans sold amounts to €120 million and the sale was made at a price tag of some 80 percent of their value. The lender also sold consumer loans with no collateral to the Next Capital Finance non-banking financial institution.

"We did not get the same price for packages sold to Next Capital Finance," Bruynseels added. BCR is controlled by Austrian Erste group, and has assets exceeding €17 billion. By the end of 2009, it will employ some 8,700 people, slightly lower than the current 8,900.

Business Standard