Foreign lenders’ exposure to Romania’s economy currently stands at $33.3 billion, or 19% of its Gross Domestic Product, which means Romanian banks no longer need funding from abroad and have enough resources to keep them going.
“The deleveraging of the foreign banks in Romania must be regarded as part of the recovery and consolidation process of the local banking sector,” explains Andrei Radulescu, senior economist with Banca Transilvania.
“(…) It reflects the improvement of the funding structure of the domestic economy, the reduction of its reliance on foreign capital and the higher importance of the local capital.”
The deleveraging was even greater than Ukraine, a country ravaged by conflict in the past year, whose economy witnessed abrupt decline. Foreign banks withdrew $5.2 billion in July 2014- June 2015, according to the latest report of the Vienna Initiative 2, which uses the US dollar as the reference currency.
“Attracting funding from inside Romania is enough to meet the current needs. If more money is needed at some point because lending may increase and they have no more local resources to tap into, they will definitely turn to banks abroad,” explains Dan Pascariu, chairman of the board of UniCredit Bank.
Foreign banks withdrew $2.3 billion from Romania in the first half, second highest amount after Bulgaria, $2.7 billion.
(English version by Loredana Fratila-Cristescu)