The largest Greek-owned lenders in Romania said they can weather further turmoil over their home country’s future in the euro as the central bank in Bucharest reiterated a pledge to step in with liquidity where necessary.
Eurobank Ergasias SA’s Romanian unit, Bancpost, isn’t relying on funding lines from its Athens-based parent, Chairman Mihai Bogza said. The Greek owners of Alpha Bank Romania SA aren’t seeking support from their local subsidiary, which is counting on “high solvency” to mitigate contagion risks, Chief Executive Officer Sergiu Oprescu said July 7 in an interview.
“We don’t expect to have any liquidity problems because of the tensions in Greece,” Bogza said in an interview in Bucharest on Thursday. “They’re there and we’re here. We’re a self-sustaining Romanian bank.”
The Greek government, threatened with an exit from the euro, has until midnight Thursday to convince creditors it has an economic plan deserving of a new bailout. With Greek lenders’ access to European Central Bank funding at risk, the viability of their foreign subsidiaries is coming into question. They own about 12 percent of Romanian banking assets, with nearby nations such as Bulgaria also under threat.
“The potential withdrawal of capital by mother banks is the most pronounced concern,” said Otilia Dhand, a Brussels-based analyst for Teneo Intelligence. “A certain level of temporary instability can’t be ruled out. However, the systemic risk is limited due to the good capitalization of Romanian banks as well as the deposit-guarantee scheme.”
After Greece shut its lenders and imposed capital controls in June, Romania’s central bank lent the most since April at a repurchase auction this week. It stands ready to help Greek bank subsidiaries, spokesman Dan Suciu said Thursday by phone.
“The central bank is ready to provide liquidity to Greek bank units via repo or other available facilities,” Suciu said. “We’re not planning any special contingency measures apart from existing ones, such as a compensation accord which prevents Greek owners from withdrawing local deposits.”
Units of Greek lenders Bancpost, Alpha, Piraeus Bank SA and National Bank of Greece SA hold 10 percent of Romanian deposits, Nicolae Cinteza, who heads the central bank’s supervision department, said June 29. The parent banks’ shares haven’t traded since June 26.
Alpha’s Romanian unit had a market share of 5.8 percent as of March 31, with 1.5 billion euros ($1.7 billion) of deposits and 3 billion euros of loans, according to a presentation by its owner. Bancpost had about 1.8 billion euros of deposits and 2.6 billion euros of gross loans, according to its owner.