BANCA NAŢIONALĂ A ROMÂNIEI BANCA NAŢIONALĂ ROMÂNIEI

BANCA NABANCA NAŢŢIONALIONALĂ AĂ A ROM ROMÂÂNIEINIEIBANBANCCA NAA NAŢŢIONALIONALĂĂ ROM ROMÂÂNINIEIEIBANBANCCA NAA NAŢŢIONALIONALĂĂ ROM ROMÂÂNINIEIEI

BANCA NABANCA NAŢŢIONALIONALĂ AĂ A ROM ROMÂÂNIEINIEI

Romanian links with the euro area are material, but the contagion effects from sovereign debt crisis has

remained subdued so far…

Source: ECB, European Commission, BNR calculations Bloomberg, BNR calculations

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


…the soundness of the Romanian macroeconomic stance and of the prospects, in line with the region,

contributing to such developments

Source: Source: European Commission, spring forecast 2012 (May 2012)

* projections

Main macroeconomic indicators in selected countries


A slowdown of the EA economic growth would be relatively well managed by the Romanian companies

involved in the foreign trade…

Source: BNR calculations

Main financial soundness indicators for corporate sector, June 2011


…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

Source: BIS, BNR calculations, Fratzscher (2002)

Sensitivity of the banking sectors to regional shocks, through common

lender channel

Average holdings of non-resident government securities by the RO banks

Source: monetary survey

sep-11/dec-10 Turkey

- 3.0 2.1 1.7 5.6 5.5 17.9 - 2.9 2.1 2.2 5.7 6.7 19.4

6.4 - 8.2 4.3 7.7 1.9 28.5 6.0 - 7.9 4.7 7.9 2.1 28.6

6.3 11.6 - 8.7 8.1 5.1 39.8 6.3 11.6 - 9.2 8.2 5.8 41.2

12.1 13.9 19.7 - 13.9 24.9 84.5 14.5 15.2 20.4 - 15.0 23.2 88.3

16.3 10.6 7.8 5.9 - 10.9 51.5 16.7 11.1 7.9 6.5 - 12.9 55.1

20.2 3.2 6.1 13.1 13.5 - 56.0 19.7 3.0 5.6 10.2 12.9 - 51.4

61.4 42.3 43.8 33.7 48.8 48.3 - 63.2 43.8 43.9 32.8 49.7 50.6 -

Poland

Romania

Turkey

Total

TotalBulgaria Croatia Hungary Poland Romania

Bulgaria

Croatia

Hungary


The Romanian banking sector weathered relatively well the financial crisis…

Source: BNR

Capital adequacy ratio (percent) Banking profitability (percent)

Source: BNR


…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%


The Romanian banks with Greek shareholders are in a good position to cope with adverse developments

Main banking indicators (December 2011)

Source: BNR


Credit conditions orderly developed from both domestic banks and foreign lenders financing

Romanian economy

Source: BNR

* BNR estimations for NBFIs, for the period 2006-2008

Lending from domestic and foreign financial institutions (MFIs and NBFIs*)


Lending standards of the domestic banks tightened, in line with euro area developments…

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

Changes in credit standards (net percentage %)

Companies Households


…the availability of funding in FX currencies having a contribution in such direction


Loan-to-deposit ratio, by currency

Wholesale funding from abroad, EUR bl.

Source: BNR


FX lending is mainly a stock challenge…


Non-financial companies Households

Source: Private Credit Bureau, BNR calculations

Loans from domestic banks and NBFIs, by currency and type (RON bln)


…and the credit risk from FX lending over-paced the credit risk in domestic currency


NPL non-financial companies NPL households



The banks asset quality remains an important challenge for the financial stability


NPL non-financial companies NPL households



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.

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