National Bank of Moldova notes decrease in share of bad loans in banks

Chisinau, 1 August /MOLDPRES/- The share of bad loans in the loan portfolio in the first half of the year decreased, but remains high, with the banks continuing their strategy to reduce them, the National Bank of Moldova states in the report on the financial situation in the banking sector in the first six months of 2018. The share of non-performing loans in total loans decreased from 18.4 percent in late 2017 to 14.7 percent at the end of June.

BNM said “the progress achieved in diminishing the share of non-performing loans in total loans is due to measures taken by banks to develop and implement their own strategies in this respect, to transfer non-performing loans to a third person, to sell the pledge.

According to the National Bank, the new loans granted in the first half increased by 11.6 per cent against the same period of the previous year, one of the factors being the decrease in interest rate on loans. At the same time, in March-June 2018 there was a monthly increase in the loan portfolio. The highest growth was recorded in consumer loans and loans to purchase real estate.

Economist Veaceslav Ionita points out that while 10 branches of the economy recorded an increase in the loan portfolio by 1.33 billion lei, in the second quarter compared to the first quarter, another five branches registered a decrease by 540 million lei. In fact, the population is the engine of bank lending growth. Consumption and mortgage contributed 53% to total credit portfolio increase. On the opposite side are trade and food industry, which continues to reduce the volume of loans already contracted the fifth consecutive year, and in the last quarter the portfolio of these branches dropped by 452 million lei, the expert said. In his opinion, accelerating consumption removes the blockage in banking system.

(Reporter V. Bercu, editor A. Răileanu)