1. Are Romanian banks with Greek capital important for autochthonous banking sector?

Romanian banks with Greek capital play a moderate role in Romanian banking sector. The asset-based ranking of Romanian credit institutions comprises banks with Austrian capital (36 percent), with French capital (14 percent), with Greek capital (12 percent) and with Romanian capital (10 percent), as of April 2015. Judging by the number of banks, credit institutions with predominantly Greek capital stay are at same position as banks with Dutch capital (4 institutions, respectively). First positions are occupied by banks with Austrian capital (7 institutions) and banks with Romanian capital (6 institutions), as of April 2015. There are no banks with predominantly Greek capital in top 5 of the Romanian banking sector. There are two Romanian banks with Greek capital in top 10, with a solvency level above the group of banks with Greek capital.

2. Are the decisions of Greek authorities going to apply to Romanian banks with Greek capital?

No.
All four Romanian banks with Greek capital are Romanian legal entities. All these banks are subject to Romanian legislation only and are under direct supervision of the National Bank of Romania. Consequently, capital movement restrictions enforced by Greek authorities do not apply to Romanian banks with Greek capital. Limits on withdrawals imposed for banks in Greece (from personal accounts or ATMs) do not apply to Romanian banks with Greek capital.

3. Can Romanian banks with Greek capital withstand unfavorable evolutions?

Yes.
Romanian banks with Greek capital have an adequate prudential situation which allows them to cope with unfavorable evolutions.

• Solvency rate of Romanian banks with Greek capital stands at 17,6 percent (March 2015), ascending from 16,3 percent, in December 2014, and significantly above the minimum level covered by European legislation (8 percent);
• Capital quality of Romanian banks with Greek capital is adequate. Tier 1 capital ratio stands at 12,7 percent (in March 2015), growing from 11,5 percent in December 2014;
• Romanian banks with Greek capital possess an adequate level of liquid assets, which denotes a good ability to cover short-term liabilities;
• The IFRS provisions coverage rate remains at a suitable level (69 percent in April 2015, this value being close to the system’s average), and the quality of credit portfolio is improving, close to system’s average values (non-performing loans rate is 15.9 percent in April 2015, descending from 21 percent in April 2014).

4. Are Romanian banks with Greek capital dependent on funding from parent banks?

No.
Credit lines from Greek parent banks represent 27.5 percent of total liabilities of the Romanian banks with Greek capital, and the majority of these credit lines (81.5 percent) bear a contractual residual maturity of more than 1 year. If the credit lines, which are about to expire in the course of this year, would not be renewed, Romanian banks with Greek capital have additional resources for obtaining liquidity. The assets of these banks, which are eligible for refinancing from National Bank of Romania, represent almost double the liquidity needs that may appear in the circumstances of cancelling some of the credit lines from parent banks due in the current year. The decreasing dependency of Romanian banks with Greek capital on credit lines from Greek parent banks is underpinned also by the important adjustment of the relation between credits and deposits. The ratio, although it remains above the system’s average (92 percent), displays a significant decrease (from 172 percent in December 2008 to 136 percent in April 2015). Last but not least, the liquidity risk of Romanian banks with Greek capital has been reduced by the existence of agreements of compensation with the shareholders, at NBR’s recommendation. According to these agreements, Romanian banks with Greek capital have the possibility of refusing the withdrawal of shareholder’s deposits in the situation of the introduction of capital control measures.