THE "ROMANIA'S DEVELOPMENT IN THE NEW EUROPEAN FINANCIAL CONTEXT" CONFERENCE / FLORIN GEORGESCU, BNR:  "Banks' solvency ratio has improved, despite the losses"

Between 2009 and 2014, the Romanian banking system had a net loss of 1.6 billion Euros, said Florin Georgescu, First Deputy Governor of the National Bank of Romania (NBR).

He said: "Despite these losses in the post-crisis period, the solvency ratio of the banking system has improved, and at the end of last year it reached 17.3%. Also, shareholders of the domestic banks have injected 1.8 billion Euros between 2009 and 2014. Those capital injections were needed to cover the losses caused by the lending exuberance of the pre-crisis period, but there is now optimism when it comes to resuming lending on a more healthy, wiser basis. We are in a period of excess correction, we are in a period of regulation, up to the level deemed necessary by the European and international decision makers in the banking sector. This sets the foundation for a healthy resumption of banks' core activity, lending".

The NBR official reminded that the Romanian banking system had a loss of 4.4 billion lei at the end of 2014 (almost 1 billion Euros) and has emphasized that the main problem that the banking institutions are faced with now is disintermediation, which has caused a reduction in lending.

The resources available to banks have followed a downward trend, from 22 billion Euros in 2008, to 11.9 billion Euros in 2014. "So we have a deficit of 10.2 billion Euros in that period, funds which were not used for lending. On the other hand, the domestic banks' foreign resources have been gradually replaced by the domestic ones, which have increased by 12.2 billion Euros in 2014 compared to 2008", said Florin Georgescu.

When asked about the risks the situation in Greece poses for the Romanian banking system, Mr. Georgescu responded that banks with Greek equity are solid, well capitalized and that the system will withstand potential issues caused by Greece's financial situation.