“In line with the EU directive, we have revised our position and we do not expect state funds will be used to support Romanian and Bulgarian subsidiaries of Greek banks. (…) Data presented Wednesday by Romania’s central bank governor have clarified the financial situation of Greek-owed banks,” ING said in a statement.
Central bank governor Mugur Isarescu said Wednesday the Romanian subsidiaries of Greek banks are sound and do not depend on parent bank financing, adding financing lines coming from parent banks account for 27.5% of total liabilities.
Greek banks’ Romanian units have a proper prudential situation which would allow them to cope with unfavorable conditions. Their solvency rate is 16.7%, higher than 16.3% in December 2014 and above the central bank’s regulated threshold of 8%, and the quality of funds is good. Also, their liquid assets are at a proper level.
“All four banks have either cash in their registers or in minimum mandatory reserves, either state treasuries and other assets that can be quickly turned into cash or use them to have access to quick financing from the central bank,” said Isarescu.
Isarescu also said the decisions made by Greek authorities do not apply to the Romanian units of Greek banks, as they have no direct influence.
The Romanian banking industry association CPBR recently said that, regardless of any upcoming measures in Greece, the impact on the Romanian market will remain limited.
Four Greek-based banks, namely, Alpha Bank, Bancpost, Piraeus and Banca Romaneasca, operate on the Romanian market and control 12% of the assets of the local banking system. Piraeus Bank announced Monday that capital controls imposed on Greek banks do not apply to the Romanian subsidiary, nor are its operations limited in any way.
ING had noted in a report Tuesday the Romanian state could be expected to cover the four banks’ estimated EUR2.5 billion financing from parent banks in the event Greece leaves the eurozone. ING warned such a measure would have an impact of up to 1.5% of GDP and would affect the country’s short term debt.