The credit risk is one of the major vulnerabilities of the banking sector. The number of non-performing loans rose by 65% to 17.2% of the credit portfolio, which decreased by 9%. The figures are contained in a monitoring report on the developments in the financial-banking sector in December 2016 – October 2017 that was compiled by Transparency International Moldova and the Institute for Development and Social Initiative “Viitorul”.

One of the report authors Veaceslav Ionita, in a news conference at IPN, said the volume of non-performing loans during the past year rose by 1.87 billion lei or 44%, from 4.2 billion in 2016 to 6.07 billion in 2017. The rise followed the worsening of the situation at the three banks that are under special supervision – Moldindconbank, Moldova-Agroindbank and Victoriabank. The situation at the other banks didn’t change essentially.

According to the expert, the credit risk in 2017 continues to be significant. Special attention should be further devoted to the non-performing loans, the method of primary repayment of these loans and the quality of the secondary repayment source, namely the quality and value of credit insurance.

The report says that even if a number of legal acts were adopted, the insufficiency of legal provisions that would regulate the specific, complex, multidimensional and litigious conditions in the banking sector, especially at the three banks that are supervised by the National Bank of Moldova, does not allow solving a number of problems related to shareholder transparency and high risks for potential honest investors. The process of attracting investments to the sector is also delayed for objective and subjective macroeconomic reasons.

According to the report, the investigation of the frauds, especially those committed in 2014-2015, is intentionally delayed by the authorities. There is social and political sensibility on the issue. The initiation of authentic investigations will catalyze a correct and legal process of holding accountable all the players involved in these frauds.

The experts said that a series of attempts to legalize funds and assets coming from the embezzled funds as well were made in the course of 2017. Such attempts should be discouraged by involving institutions that deal with the combating of grand corruption and money laundering.