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Moody’s: Greek Banks Could Sell Romanian Business If Crisis Worsens

Greek lenders are unlikely to withdraw substantial capital from their Romanian subsidiaries over the coming period, but a sovereign crisis at home could prompt a sale of international businesses, Moody’s Investors Service said.
Moody’s: Greek Banks Could Sell Romanian Business If Crisis Worsens
Florentina DraguOana Gavrila
05 iun. 2011, 13:02, English

ATEbank, one of the six Greek banks with activities on the local market, has already announced plans to sell its majority stake in ATEbank Romania.

However, the Hellenic lenders are liquid and well capitalized and there were no immediate reports of financial difficulties at their Romanian subsidiaries, said Nondas Nicolaides, senior analyst at Moody’s.

Additionally, Romanian central bank is expected to support the Greek subsidiaries if need arises, Nicolaides told MEDIAFAX.

Moody’s today has downgraded to junk eight Greek banks, after cutting its sovereign rating on Greece by three notches to ‘Caa1’, with negative outlook. The ratings agency warned there’s a 50-50 chance Greece will default.

Atsi Sheth, senior analyst at Moody’s, said a possible default should not hit Romania directly, but a strong decline in EU’s economic growth following the situation in Greece would have a negative impact on the country’s economic recovery.

Romania emerged from recession at the end of March, after two consecutive quarters of economic growth. The government forecasts an increase of 1.5% for the whole of 2011, from an economic decline of 1.3% last year.