Parent Banks’ Exposure To Romania Down By EUR700M From End-March – Ctrl Bker

„The banks (…) acted fairly and they’ve kept their commitments. True, their exposure is slightly lower compared with March, but they truly believed there are not enough attractive investment alternatives,” Georgescu said.

He added the meeting with the parent banks due in Brussels November 18 aims to reconfirm the initial commitments made by the lenders and to review the effective procedures included in the agreement.

„I believe we will see positive signals after the meeting. The nine banks’ exposure is lower by EUR700 million. It’s not a very large amount,” Georgescu said.

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The International Monetary Fund will work with the parent banks of Romania’s top nine lenders to bring exposure back to the March level, as financing on the local market has dropped 2% since, IMF mission chief Jeffrey Franks said last week.

Franks said Romania’s banking system proved stronger than anticipated in resisting the global economic downturn, adding that the current solvency ratio in Romania stands at 13%, from the 8% minimum required.

In August, the parent banks of Romania’s top nine lenders have signed bilateral letters to keep the exposure ceiling on the local market and their subsidiaries’ solvency ratio above 10%.

The agreement is part of the EUR20 billion financial aid package Romania secured from the IMF, the European Union and other international lenders to cushion the effects of the recession.

The nine lenders are Erste Bank, Raiffeisen International, Eurobank EFG, National Bank of Greece, Societe Generale, Alpha Bank, Volksbank, Piraeus Bank and UniCredit. They account for around 70% of the local banking market.