“They want to have a better relationship with clients because they need money considering they cannot get funding from parent banks. It’s more complicated to raise money from the interbank market, so they prefer to attract deposits from clients,” comments financial analyst Dragos Cabat.
For instance, Alpha Bank, the biggest local bank controlled by a Greek financial group, pays a gross interest of 8.33% a year for six-month leu deposits, while the market average is around 7% a year, with many big banks having already lowered interests to around 6% a year. Alpha Bank has an ongoing promotional offer whereby clients receive an added 0.5% to their interest for amounts deposited until July 15.
Banca Romaneasca yesterday launched a seven-month deposit with a gross interest of 8.33% a year on leu-denominated deposits set up until September, with interest payable in advance. The net interest is 7% a year, with the bank retaining the 16% income tax. Similarly to Alpha Bank and Piraeus, Banca Romaneasca offers a gross interest of 4% on euro deposits, one percent above the market average.
The six Greek-controlled banks operating on the Romanian market hold EUR6 billion in deposits and 17% of overall banking assets, i.e. almost EUR14 billion. Officials of Romania’s central bank have repeatedly said Greek banks had sufficient liquidity and a comfortable capital adequacy ratio.
This is not the first time that Greek-held banks have offered higher interests on deposits to persuade clients not to move their deposits elsewhere. Last spring, when Greece turned to the International Monetary Fund and European Union for help to avoid financial collapse, Greek-owned banks came up with higher interests in order to prevent deposits from being withdrawn and to compensate the much narrower access to interbank financing.