This type of funding for foreign bank subsidiaries won’t disappear overnight because of the longer maturities. However, a downward trend continued this year after the non-residents’ deposits stayed above EUR8 billion throughout 2011, peaking at EUR8.65 billion in August. Compared against that level, non-residents withdrew EUR1 billion from local banks.
Deposits were one of the solutions parent banks have used along with subordinated loans and capital increases in cash to help their local subsidiaries throughout the crisis.
The long-term deposits of non-residents have also been influenced by the high interests offered in Romania for both lei and euros in the last few years, which were very attractive especially when the leu/euro exchange rate was stable.
More than EUR3 billion went into local banks from late 2008 through mid 2011, which is a really significant foreign currency inflow given the serious decline of foreign investment and extremely low absorption of European funds.
(English version by Loredana Fratila-Cristescu)