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BNR economist: Banks have 75% exposition in economic setors affected by pandemic

The economic sector strongly affected by the coronavirus pandemic represent 75% of overall bank expositions, and problems recorded by those companies may reflect on credit institutions, said Florin Dragu, senior economist at the Financial Stability Department of the Central Bank - BNR, on Thursday.

The Romanian banking system is in an average risk category at European level, and the coverage degree with provisions for non performing credits is 61%, over the EU average which is 45%, Dragu said, at a meeting with the press. “Average banks have high values of the performance rate, compared to the big ones, which have low values of this indicator,”he continued.

In the new economic context, considering the pandemic impact, this tendency will probably reverse in the next period of time.

“The pandemic has affected a wide spectrum of economic sectors. If we consider the sectors where we expect high impact, they have a share of 25% in the bank portfolio  and engage 21% of the number of employees. If we add sectors with medium impact level, then we reach 75% of total bank expositions,”the BNR official said.

In the field with high impact, he mentioned the automobile sector, processing industries and real estate transactions.

“Lacking an adequate cash management, these difficulties can turn into solvency problems which can be then sent to the other commercial partners or to credit institutions,”Dragu added.

In his turn, Florin Danescu, the president of the Romanian Bank Association (ARB), showed that in the pandemic period, banks were in alert all the time, ready to help.

“Banks and us, the Romanian Bank Association, functioned as a sort of crisis cell. I was in contact with all institutions. I was one of the people who set up a rule how to use means from a distance, counted a lot. Working from home means a schedule: at 8 o'clock you were wearing a suit, at home, already communicating with various institutions, banks and finished work at 1 at night, when you put on a track suit and going home,”he added. Specialists from institutions made effects less serious, Danescu said.