The three major foreign lenders have augmented their support of Romanian lending institutions amid the deleveraging process euro zone banks have engaged in. International financial institutions are trying to direct funds to SMEs through banks in favorable price and maturity conditions.
The bulk of funds, namely EUR255 million, were released in the first six months of 2014 by the European Investment Bank. After initially supporting mainly first league banks, EIB gradually eyed smaller players and even leasing companies as well.
UniCredit Tiriac Bank, OTP Bank, Garanti Bank benefitted from financial support from the three international lenders in the first half.
Banca Transilvania, Romania’s third largest lending institution, which in early 2014 got a $40 million subordinated loan from IFC, is now in talks with EIB for a EUR150 million credit line to raise its capacity to fund, at better costs and longer maturities, projects developed by SMEs and medium-sized companies.
CEC Bank is also in talks for a EUR100 million loan from EIB for lending to SMEs, after having got two tranches totally worth EUR45 million from the EU’s bank in 2013 to increase its economy funding capacity.
The EBRD, EIB and IFC released foreign currency funding lines that can support lending revival by dampening the fallout from the deleveraging process through which euro zone banking groups are curbing their exposure to Romania.
Beside the credit lines mainly destined for lending to SMEs, international financial institutions also made placements in corporate bonds issued by banks.
The EBRD and IFC bought 40% of the bonds issued by Raiffeisen Bank. Raiffeisen raised RON500 million (EUR112.7 million) by selling 5-year bonds and this was the second such operation, after the bank borrowed RON225 million from investors last year.
(English version by Catalina Apostoiu)