Banks reporting to the Bank of International Settlements (BIS) have reduced their exposure to Romania in the last year ending June, when the exchange-rate adjusted outflows were $5.6bn (3.2% of GDP) – marking one of the sharpest reductions seen in the region, according to the latest report from the Vienna Initiative committee released November 17.
Local analysts received the news on a positive note, however, stressing the strengthening of local financial intermediation. The financing extended by foreign banks is in line with the local necessity, the head of UniCredit Romania’s supervisory board, Dan Pascariu, commented.
At the end of June, the exposure of BIS-reporting banks to Romania’s economy was $33.3bn, or 19% of GDP.
Outflows have eased in Q2 this year, when they were only 0.3% of GDP, compared to 1% of GDP in Q1 and 1.4% of GDP in Q4 2014.
For comparison, in the whole CEESE region, including Albania, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey and Ukraine, outflows measured $72.8bn, or 2.1% of GDP.
For the region not including Turkey and CIS, outflows were only 1.3% of GDP and they reversed (turned to net inflows) to 0.1% of GDP in Q2 this year.
A split picture for credit growth has continued across the region, EBRD, commenting on the report, concluded.
A few emerging European countries, such as the Czech Republic, Estonia, FYR Macedonia, Poland and Turkey are experiencing positive growth in credit to the private sector, including both non-financial corporations and households. In contrast, credit growth has remained weak or has contracted in the rest of the region.
The strength of credit recovery is in part linked to the progress in the private sector balance sheet repair, as reflected in asset quality of loans held by CESEE banks.
|2015 Q2 stocks||XR-adj flows $mn||XR-adj flows % of 2015 GDP|
|US$ mn||% of 2015 GDP||12M||Q2 15||12M||Q2 15|
|Emerging Europe 2/||514085||16.8||-9,896||-69,862||-0.3||-2.3|
|CESEE ex. RUS & TUR||321728||21.3||1,105||-23,224||0.1||-1.5|
|CESEE ex. CIS & TUR 3/||312620||23.1||1,812||-17,330||0.1||-1.3|
|Sources: BIS and IMF staff calculations.|
1/ All countries listed above.
2/ CESEE excluding the Czech Republic, Estonia, Latvia, Slovakia, and Slovenia.
3/ CIS includes Russia, Ukraine, Moldova and Belarus.
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