BANCA NAŢIONALĂ
BANCA NAŢIONALĂROMÂNIEI
A ROMÂNIEI
Romanian links with the euro area are material, but the
contagion effects from sovereign debt crisis has
remained subdued so far…
Importance of the EA for the
economy and the banking sector
Risk perception (bp),
January - mid May 2012
Note: Min, Max, and May-15 values
Source: ECB, European Commission, BNR calculations
Bloomberg, BNR calculations
BANCA NAŢIONALĂ A ROMÂNIEI
…the soundness of the Romanian macroeconomic
stance and of the prospects, in line with the region,
contributing to such developments
Main macroeconomic indicators in selected countries
* projections
Source: Source: European Commission, spring forecast 2012 (May 2012)
BANCA NAŢIONALĂ A ROMÂNIEI
A slowdown of the EA economic growth would be
relatively well managed by the Romanian companies
involved in the foreign trade…
Main financial soundness indicators for corporate sector, June 2011
Source: BNR calculations
BANCA NAŢIONALĂ A ROMÂNIEI
…and an orderly deleveraging process in the EA would
orderly impact the SEE region. For Romania, the indirect
channel (common lender) marginally changed in 2011,
while direct channel is weak
Average holdings of non-resident
government securities by the RO banks
Sensitivity of the banking sectors to
regional shocks, through common
lender channel
sep-11/dec-10
Bulgaria
Croatia
Hungary
Poland
Romania
Turkey
Total
Bulgaria
Croatia
-
Hungary
3.0
-
6.4
2.1
2.9
6.0
6.3
8.2
11.6
12.1
-
13.9
14.5
16.3
10.6
20.2
7.8
3.2
19.7
61.4
6.1
3.0
42.3
63.2
5.9
13.1
5.6
43.8
43.8
33.7
43.9
88.3
51.5
12.9
-
12.9
48.8
32.8
84.5
10.9
13.5
41.2
23.2
-
10.2
39.8
24.9
-
28.6
5.8
15.0
6.5
28.5
5.1
13.9
19.4
2.1
8.2
-
7.9
1.9
8.1
-
17.9
6.7
7.9
9.2
20.4
11.1
7.7
8.7
19.7
5.5
5.7
4.7
-
15.2
16.7
4.3
Total
Turkey
5.6
2.2
7.9
11.6
Romania
1.7
2.1
-
6.3
Poland
55.1
56.0
48.3
49.7
Source: BIS, BNR calculations, Fratzscher (2002)
51.4
-
50.6
-
Source: monetary survey
BANCA NAŢIONALĂ A ROMÂNIEI
The Romanian banking sector weathered relatively
well the financial crisis…
Capital adequacy ratio (percent)
Source: BNR
Banking profitability (percent)
Source: BNR
BANCA NAŢIONALĂ A ROMÂNIEI
…and is adequately equipped to withstand liquidity
shocks from capital flights
Liquidity stress test results, December 2011 (RON mil)
Stress test scenarios
S1
S2
Domestic deposits
-10%
-20%
ST parent funding
-25%
-50%
ST corporate external
funding
-25%
-50%
Banks FX swaps 1M
-25%
-50%
BANCA NAŢIONALĂ A ROMÂNIEI
The Romanian banks with Greek shareholders are in a
good position to cope with adverse developments
Main banking indicators (December 2011)
Source: BNR
BANCA NAŢIONALĂ A ROMÂNIEI
Credit conditions orderly developed from both
domestic banks and foreign lenders financing
Romanian economy
Lending from domestic and foreign financial institutions (MFIs and NBFIs*)
* BNR estimations for NBFIs, for the period 2006-2008
Source: BNR
BANCA NAŢIONALĂ A ROMÂNIEI
Lending standards of the domestic banks tightened, in
line with euro area developments…
Changes in credit standards (net percentage %)
Companies
Households
Note: Net percentage - positive values indicate a tightening of lending standards
Source: BNR, Bank lending survey, May 2012
ECB, The Euro Area Bank Lending Survey, May 2012
BANCA NAŢIONALĂ A ROMÂNIEI
…the availability of funding in FX currencies having a
contribution in such direction
Loan-to-deposit ratio, by
currency
Source: BNR calculations
Wholesale funding from abroad,
EUR bl.
Source: BNR
BANCA NAŢIONALĂ A ROMÂNIEI
FX lending is mainly a stock challenge…
Loans from domestic banks and NBFIs, by currency and type (RON bln)
Non-financial companies
Source: BNR calculations
Households
Source: Private Credit Bureau, BNR calculations
BANCA NAŢIONALĂ A ROMÂNIEI
…and the credit risk from FX lending over-paced the
credit risk in domestic currency
NPL non-financial companies
Source: BNR calculations
NPL households
Source: Private Credit Bureau, BNR calculations
BANCA NAŢIONALĂ A ROMÂNIEI
The banks asset quality remains an important challenge
for the financial stability
NPL non-financial companies
Source: BNR calculations
NPL households
Source: Private Credit Bureau, BNR
calculations
BANCA NAŢIONALĂ A ROMÂNIEI
Conclusions
• A disorderly unfold of the EA sovereign debt crisis would impact
Romania through: (i) a deterioration of the availability of funding
(through both price and quantitative channels), and (ii) a
weakening economic growth prospects.
• The Romanian banking sector and the companies involved in
foreign trade are adequately equipped to withstand external
adverse developments.
• Credit conditions orderly developed in Romania, the central bank
taking early measures: (i) calling for additional capital from banks
shareholders, (ii) supporting Vienna Initiative type arrangements,
and (iii) fostering cooperation with home supervisory authorities.
• Carrying on prudent policy implementation, in line with EU and
IMF arrangements, will continue to provide confidence to the
markets and to keep the prudential buffers to adequate levels.
BANCA NAŢIONALĂ A ROMÂNIEI