Overdue credits tripled in one year

Since September 2008 until the same month of 2009, the overdue credits of the population and firms totalled over three times more, while their weight in the balance of the loans rose from 1.1 per cent to 3.25 per cent, the National Bank of Romania (BNR) informs. Thus, the overdue credits reached RON 6.5 bln. The overdue loans increased in September by 4.3 per cent in monthly terms, and 18.3 per cent vs. June, while compared to the end of the past year the advance was 2.3 times, it also arises from the data published yesterday by the central bank. The value of the overdue credits in RON was RON 3.8 bln at the end of September, up almost 5 per cent over August and 17 per cent compared to June.

The outstanding loans in RON increased 2.1 times in the first nine months, and 2.45 times in annual terms. As for the credits in foreign currency, the debts totalled RON 2.7 bln in September, being 4.5 times bigger than in the same month of 2008 and 2.7 times the value at the end of the past year. The debts to the loans in foreign currency advanced 3.34 per cent in September against August and 20.23 per cent in quarterly terms.

Foreign currency - preferred to the detriment of the national currency

The biggest debts reported to the total balance of the credits were registered at the end of September in Bistrita-Nasaud County, being over 2.5 times above the average registered at national level. High levels of the debts were registered also in Suceava, Salaj, Arad and Olt, being in the interval 5-6 per cent, in these counties the unemployment rate being also high, shows Ziarul Financiar. Both the population and the firms preferred to borrow more in foreign currency. The credits in foreign currency of the population advanced in the first nine months by over 3 per cent, to RON 60.35 bln. In annual terms, the advance was 9.1 per cent. However, the balance of the loans taken up by the population in RON decreased 3.7 per cent in the first nine months, to RON 39.4 bln. The balance of the credits granted to population in RON for dwellings was RON 1.7 bln in September, up 4.7 per cent against December 2008, and 7.47 per cent in annual terms. However, the loans in RON for dwellings fell 0.76 per cent in the third quarter. The loans taken up in foreign currency by the population for the acquisition of dwellings totalled almost RON 21 bln, up 8.5 per cent at the end of the past year, 19.6 per cent against September 2008, and 1.7 per cent in quarterly terms. The firms have also reduced the credits taken up in local currency, but increased the funds taken up in foreign currency. The loans in RON taken up by firms dropped 3.8 per cent in the first nine months, to RON 39.4 bln. The loans in foreign currency taken up by firms totalled RON 57.45 bln at the end of September, up 11 per cent in annual terms and 6.1 per cent compared to December 2008.

Financial blockage limits activity in industry and constructions

The insufficient demand, the financial blockage, the high banking interest rates, the depreciation of the RON and the problems connected with the supply of raw materials are some of the reasons which limit the production activity in industry and constructions, BNR shows. One fifth of the industrial companies and 57 per cent of the operators from constructions have felt the effect of the financial blockage. The number of employees from industry will maintain the downward trend, lay offs being anticipated also in constructions, as a result of the beginning of the cold season. The estimates for October show the maintenance of investments at a level similar to that from the previous period both in industry and constructions.

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