The capital increases amounted to about EUR325 million in 2009 and a further EUR450 million last year.
The non-residents have thus injected almost one billion lei into the capital of the local banks since the beginning of the crisis, in addition to subordinated medium and long-term loans, which reached EUR8.65 billion at the end of August. This means an 18% increase over the past year and 45% since the onset of the crisis, according to the data from the National Bank of Romania (BNR).
Greek banks, which have been faced with a confidence crisis because of their country’s sovereign debt problem, contributed most money to the capital of the local banks this year. The largest Greek-held bank Alpha Bank, got a EUR50 million capital injection from its parent bank in June. Alpha posted RON67 million (about EUR16 million) losses in the first half, according Romanian accounting standards.
The Greek owners of the local subsidiary of Emporiki, too, came up with EUR15 million for its capital in the spring. The small bank had received another EUR6 million injection last year. The Greek bank is owned by French Credit Agricole group.
Bancpost, which is to merge with rival Alpha Bank, as decided by their parent banks in Athens, announced a EUR21.5 million capital increase. It will be done by converting some receivables worth EUR20 million and an injection of EUR1.5 million. Bancpost was among the banks with the highest losses as calculated by Romanian standards in the first half, RON45 million (EUR10.4 million), market sources say.
Nicolae Cinteza, head of the supervisory department of the BNR has recently said that Greek-held banks need to boost liquidity and set aside reserves in case problems their parent banks are facing back home worsen.
The groups that control the four largest local Greek-held banks, Alpha Bank, Eurobank (Bancpost), Piraeus and National Bank of Greece (Banca Romaneasca) have an over EUR40 billion exposure to the notes issued by the Greek government.
Hungarian-held MKB, too, contributed EUR20 million to the capital of the local bank, MKB Romexterra this spring.
The Austrian groups, which own over one third of the Romanian banking system’s assets are getting ready to strengthen the position of their local subsidiaries. Erste group wants to contribute EUR100 million to the capital of the largest local bank BCR. BCR operated another capital increase this spring, by incorporating the equivalent of EUR13 million worth of 2010 profit in its capital. Italian-held UniCredit Tiriac, too incorporated last year’s profit in the capital in spring, an increase that stood at EUR13.5 million.
Volksbank, the sixth local bank by assets, controlled by the Austrian group by the same name, announced an up to EUR200 million capital increase, as well, which could be done in two steps, the first of which by the end of the year. The Austrian owners increased the capital of the subsidiary by EUR200 million in March last year, as the results of the bank had been severely affected by the deterioration of the loan portfolio.
(English version by Loredana Fratila-Cristescu)