Romanian Central Bank: Our banks are immune to the problems of Austria and Greece

Despite the difficult situation of Greece and Austria, whose degree of leverage weighs heavily on their banking systems, officials of the Romanian National Banks insist that Romanian banks are solid and absolutely unaffected by what"s happening abroad.

Adrian Vasilescu, advisor to the Central Bank governor Mugur Isărescu, said Romanian banks are independent from the foreign banks, and so are their domestic operations.

"Right now, no bank in Romania is in danger and they are all profitable", Mr. Vasilescu said.

According to NBR statistics, most of the banks in Romania are owned by Greek and Austrian banks.

Greek investors hold 27% of the Romanian banking system, thus ranking above Austrian investors, even though the latter control just five of the five largest local banks in terms of assets. Also, in terms of assets, just two Greek banks are in the top ten of Romanian banks.

Greeks were the most active investors between September 2008 - September 2009, contributing 204 million Euros to increase the capitalization of their branches, according to data from the Trade Registry. Banks who benefited from these funds were "Bancpost" and "Banca Românească".

When asked if Greek investors would invest more resources in Romania, Mr. Adrian Vasilescu confirmed that Greece is getting ready for additional capital infusions in Romania.

Dutch banks (Credit Europe and Garanti Bank), ranked second in terms of capital injections (108 million Euros). Austria only injected seven million Euros, through a share capital increase of "UniCredit Ţiriac Bank".

In spite of assurances by the NBR, analysts still fear that the excessive leverage of Greece and Austria will continue to weigh heavily on Romanian banks.

Analysts are concerned that the so-called 2 billion Euro private loan that Greece recently raised from five banks has dealt another blow to the image of the country.

According to Bloomberg, officials of two of the banks involved in the transaction said that the 2 billion Euro loan taken out by Greece is intended to help mitigate the financial difficulties of the country, which was badly hit by the economic crisis of 2009.

Analyst Călin Rechea explained the difficult state Greece is in: "Due to the excessive public deficit of Greece and the country"s high degree of debt, banks in the country may find it harder to access funding and will have to suffer indirectly".

According to him, Greek banks borrowed around 42 billion Euros this year.

Analysts, say European banks may need a new wave of capital boosting, especially in the case of countries such as Austria or Greece.