Foreign banks methodically withdraw money from Romania, exposure of banking groups fell by 16 pc in 2014


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Credit lines offered by parent foreign banks to their subsidiaries in Romania have continued to decline last year. The exposure of the foreign banking groups fell by 16% and the central bank, although it says that these are orderly movements, admits we are witnessing a significant process of deleveraging, informs.
Foreign banking groups continue to reduce gradually their exposure in Romania. Last year, the decline was of 16%, confirming the trend started in 2010. “Financial cross-border deleveraging has increased over the year, but maintained its orderly character. The exposure of parent banks to their subsidiaries in Romania decreased by about 16% in 2014. In contrast, deposits on the local market – the main source of funding for banks – have kept their upward trend (+7.3 percent, real variation), a trend which, corroborated with the private sector credit shrinkage has led to further reduction in the ratio between loans and deposits to a level which no longer generates pressure in macro-prudential terms (90.5% at the end 2014),” shows BNR in its annual report.
The same document reveals, on the other hand, that the Romanian banking system’s dependency on money from parent groups continues to grow. Over 90% of Romanian banks’ total assets are held by groups from Austria, France and Greece.
In the five years since the start of the financial crisis and by the end of 2014, the amounts coming from foreign banking groups to their subsidiaries in Romania fell by EUR 9.1 billion, from EUR 22.1 billion at the end of 2008 to EUR 13 billion in June 2014.

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