Data provided by the National Bank of Romania (BNR) indicates that lenders posted a profit worth RON 680 million (some €160.8 mln) in the first three quarters of this year, five times less year-on-year. Calculations by Business Standard indicate that banks could register earnings exceeding €185 mln in 2009 from the interest rate spread for money obtained from BNR and lent to the Ministry of Finance alone.
Banks tried to limit the decline in profits by resizing their staff and networks, aggressively expanded in previous years. In the first nine months of this year, the banking system laid off 3,160 employees and closed 88 units.
Some of the key moments of 2009 are presented below:
In February, the central bank’s Board of Directors cut the key interest to an annual 8.5 percent from nine percent and the cash reserve ratio for foreign currency liabilities to 30 percent. In mid-November, BNR’s Board cut the CRR again, to 25 percent, due to “the postponement of scheduled entries of foreign funds.”
Peter Weiss, President of RBS Romania, said at the end of April that the sale of RBS Romania will most likely be finalized in this year’s second half, but could be postponed if the price offered is unsatisfactory.
In the second half of May, nine large foreign banks with operations in Romania – Erste Bank, Raiffeisen International, Eurobank EFG, National Bank of Greece, UniCredit, Societe Generale, Alpha Bank, Volksbank, and Piraeus Bank – committed to maintain their exposure in Romania at the level registered at the end of March 2009.
Deutsche Bank announced at the end of October that it plans to enter the local market in 2010, on the corporate client segment.
BNR elected its Board in October, and Governor Mugur Isărescu was acknowledged by World Record Academy as the longest-standing central bank governor. He has coordinated Romania’s economic policies for 19 years and is considered by some analysts the country’s “shadow” Prime Minister.
Bank of Cyprus, the largest Cypriot financial group in terms of assets, recently surprised the capital and banking markets, by announcing the acquisition of a 9.7 percent package of the shares of Banca Transilvania, through several transactions on the Bucharest Stock Exchange, worth a total of €58 million.
