The largest Greek-owned lenders in Romania said they can weather further turmoil over their home country’s future in the euro as the central bank in Bucharest reiterated a pledge to step in with liquidity where necessary.
Eurobank Ergasias SA’s Romanian unit, Bancpost, isn’t relying on funding lines from its Athens-based parent, Chairman Mihai Bogza said. The Greek owners of Alpha Bank Romania SA aren’t seeking support from their local subsidiary, which is counting on “high solvency” to mitigate contagion risks, Chief Executive Officer Sergiu Oprescu said July 7 in an interview.
“We don’t expect to have any liquidity problems because of the tensions in Greece,” Bogza said in an interview in Bucharest on Thursday. “They’re there and we’re here. We’re a self-sustaining Romanian bank.”
The Greek government, threatened with an exit from the euro, has until midnight Thursday to convince creditors it has an economic plan deserving of a new bailout. With Greek lenders’ access to European Central Bank funding at risk, the viability of their foreign subsidiaries is coming into question. They own about 12 percent of Romanian banking assets, with nearby nations such as Bulgaria also under threat.
“The potential withdrawal of capital by mother banks is the most pronounced concern,” said Otilia Dhand, a Brussels-based analyst for Teneo Intelligence. “A certain level of temporary instability can’t be ruled out. However, the systemic risk is limited due to the good capitalization of Romanian banks as well as the deposit-guarantee scheme.”
“The central bank is ready to provide liquidity to Greek bank units via repo or other available facilities,” Suciu said. “We’re not planning any special contingency measures apart from existing ones, such as a compensation accord which prevents Greek owners from withdrawing local deposits.”