Their exposure had reached its highest that year after the signing of the Vienna Initiative of 2009, when the Austrian banks, which dominate the Romanian banking sector, committed not to pull support for their local subsidiaries.
Austrian banks were once very eager to get a slice of the Romanian banking market, as shown by the willingness of Erste to pay EUR3.75 billion for the country’s largest lender, BCR. The exposure of Austrian banks surged in 2006-2008 to more than EUR30 billion at the onset of the crisis, was preserved after the Vienna Initiative and the abrupt deleveraging process started in the summer of 2012.
Austrian banks account for almost 37% of the Romanian banking system assets and the four major Austrian-held banks on the domestic market are BCR, Raiffeisen, UniCredit Tiriac Bank and Volksbank.
Erste Group-owned BCR is the market leader, with a 17.8% share of total banking assets in May 2014, down by 2 percentage points since the onset of the crisis and a non-performing loan ratio of over 30% in the first quarter. It is undergoing a portfolio cleanup that will push it back into the red.
Raiffeisen Bank, where Raiffeisen Bank International indirectly holds 99.5%, had 7.4% market share by assets in May 2014, having gained 1.4 percentage points in the past few years and it had an 11% NPL ratio. The bank made profit each year during the crisis and will remain in the black in 2014.
UniCredit Tiriac Bank, whose majority shareholder is UniCredit Bank Austria (50.56%), had a 7% market share in May 2014, up by 1.5 percentage points. NPL ratio stood at 11% in December 2013. The bank was profitable throughout the crisis, it is yet unknown how 2014 will be.
Volksbank, indirectly controlled by Volksbank Austria (51%), had a 3.7% market share by assets in May 2014, down from almost 7% at the beginning of the crisis. It cut its NPL ratio by 8%, following a sale of the EUR500 million worth of NPL. It slipped into the red during the crisis and continues to struggle to return to profit. It is also trying to exit Romania.
(English version by Loredana Fratila-Cristescu)