But banking sources say that the latest talks with the Austrian supervisory authorities have concluded that local financing will be crucial for the granting of new loans by the banks controlled by Austrian players.
The central bank of Austria and the Austrian Financial Market Authority are asking for intra-group financing to be diminished in order to reduce the risk of Austria being contaminated by potential problems of countries in the region, which would implicitly put it in danger of seeing its rating downgraded.
Manfred Wimmer, CFO of Erste Group, which controls BCR, mentioned in a conference with investors of the Austrian group that the definition of stable financing attracted on the local market – that the supervisory authorities take into consideration – includes, apart from time deposits from clients, notes with maturities above one year issued on the local market and financing from supranational organizations (such as EBRD and EIB), on condition that they take a counterparty risk.
BCR has not issued notes on the Romanian market for several years, however it is involved in a 3-year external financing program worth EUR3 billion, having attracted only EUR250 million so far. But it has around RON13.2 billion in collateral, which allows it to get financing from the Romanian central bank.
The Romanian financing market has a major problem as far as debt maturities are concerned. Even the Finance Ministry focuses again on notes with up to one-year maturity.
Raiffeisen officials in turn stress that lending will see weak growth next year and say the local bank will have no problems as a result of the new rules imposed by the Austrian supervisors. On the other hand, they admit that they will have to think twice about granting new financing.
However, Wimmer says BCR will be in a position to draw new “attractive” corporate clients from banks facing tougher restrictions than BCR.
UniCredit relies on the wider definition of stable local financing which will be taken into consideration when granting new loans. And because it has a weaker deposit base than Erste and Raiffeisen, it is preparing several projects on this segment, including deposits with maturities of up to two years and bond issues, with the group negotiating financing from supranational institutions.
The Romanian operations are under the umbrella of UniCredit Bank Austria. The entire Italian group UniCredit needs to get a huge sum in the first half of next year – almost EUR8 billion – to consolidate its capital, more than previously estimated, because of the 3Q loss.
Volksbank Romania is a separate case. Its Austrian parent bank is in an unclear situation: the transaction with Russia’s Sberbank on regional operations, minus Romanian ones, has yet to be finalized. The European Commission launched an investigation into a possibly illegal state aid – a EUR1 billion capital injection from the Austrian government in 2009.
This week new dramatic restructuring plans could be decided on, which could include, according to the Austrian press, halving the personnel, a massive outsourcing of assets and even the transfer of non-performing assets to a “bad bank” type solution.
(English version by Daniela Stoican)