BIS-reporting banks cut exposure to Romania by over USD 2bn in Q1

By bne IntelliNews July 26, 2013

BIS-reporting banks reduced their exposure to the Romanian banking system* by USD 2,072mn in Q1 to USD 27.25bn at the end of March, the Bank of International Settlements [BIS] announced.

The funds withdrawn by BIS-reporting banks in the quarter hit the highest level since Q3 of 2009 and accounted for 6.9% of the banks’ exposure at the beginning of the quarter, or 1.5% of the banking system’s total assets at the beginning of the period.

BIS-reporting banks generally reduced their exposure to Emerging Europe** by USD 5.5bn – which is 2.2% of their exposure at the beginning of the quarter, or 0.3% of the banking systems’ assets at the beginning of the quarter. The deleveraging process was therefore visibly more intense in Romania, compared to the whole region. Sharper deleveraging was seen only in Bosnia [10.4% of initial exposure], though on low base.

Since the end of 2008, the withdrawal of funds by BIS banks from Romania reached USD 14.4bn, or 32.5% of their initial exposure at end-2008. Nonetheless, their exposure still accounts for 19.7% of the banking system’s assets. The share decreased from 37% at the end of 2008.

For whole Emerging Europe, the BIS-reporting banks’ exposure to the region*** decreased from 22.8% of the region's bank assets at the end of 2008 to 15.5% at the end of Q1, 2013.

* External positions of reporting banks vis-à-vis individual countries, assets side, estimated exchange rate adjusted changes. We computed exposure to banking system from total exposure and exposure to non-banking sector.

** Defined for this purpose as Albania, Belarus, Bosnia, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia.

*** For bank assets and all the ratios including bank assets in their calculations, Moldova and Estonia are not included in the group -- since no full data for 2007-2012 is available. Given the countries’ small size the impact on overall ratios is, however, insignificant.

Change in BIS-reporting banks exposure [assets, exchange rate adjusted] to banking sectors of individual countries.

USD mn 2010 2011 2012 Q1-13 % of exposure @end-2012 since end-2008 % of exposure @end-2008
Albania 54 171 -163 3 0.7% 153 48.7%
Belarus 856 111 -249 90 4.1% 283 13.3%
Bosnia -493 -458 -245 -225 -10.4% -1,564 -44.2%
Bulgaria -649 -1,844 -265 -188 -2.1% -3,851 -29.1%
Croatia -1,860 1,136 -3,303 -539 -3.0% -3,493 -17.6%
Czech Republic 3,269 -689 -4,215 830 4.3% -5,201 -21.4%
Estonia -2,060 -3,494 -1,177 -256 -2.5% -8,249 -43.2%
Hungary -4,320 -7,468 -10,697 -1,209 -5.0% -27,804 -55.8%
Latvia -2,112 -1,466 -1,163 -437 -4.7% -8,466 -47.1%
Lithuania -2,711 41 -1,238 177 2.0% -5,700 -37.6%
Macedonia 104 235 -42 190 23.6% 566 410.3%
Moldova -108 -86 -38 4 1.3% -310 -56.3%
Montenegro -96 -381 -106 -12 -3.5% -612 -64.8%
Poland 4,546 -829 -2,481 -1,999 -3.1% 1,855 3.3%
Romania 2,876 -1,464 -3,424 -2,072 -6.9% -14,400 -32.5%
Serbia 339 68 -1,252 -352 -6.6% -40 -0.8%
Slovakia 1,447 -60 4,473 286 1.0% -3,083 -11.3%
Slovenia -1,290 -502 959 203 0.9% -466 -1.3%
Emerging Europe -2,209 -16,977 -24,627 -5,507 -2.2% -80,381 -24.0%
Source: BIS by CEIC, IntelliNews          

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