Fitch: Romania banks on upswing

Fitch Ratings said the overall trend for Romanian banks is positive, thanks to an improving operating environment as a result of strong economic growth and the expertise of their foreign shareholders.

"Foreign parents have generally conducted significant restructuring projects, improving both the product offering and risk management frameworks," said Tim Beck of Fitch's financial institutions team.

"Together with improvements in the operating environment, Fitch views these benefits as offsetting its concerns about higher levels of competition and the still high levels of loan growth. In the medium term these trends could lead to upgrades in the banks' individual ratings."

In a report, Fitch noted currently around 55% of banking sector assets is held by foreign-owned banks. With the planned privatizations of Banca Commerciala Romana (BCR) and Casa de Economii si Consemnatiuni, this will jump to over 90%.

The agency added more aggressive competition is likely to follow these privatizations, as well as the merger of HVB-Romania, Banca Tiriac and probably UniCredit Romania, which will create the third largest bank in Romania.

Fitch also highlighted potential risks that banks face in the sector, including loan growth, which has moderated in the last 18 months, but remains high.

The agency's current ratings on the banks include: BCR: long-term BB+/outlook stable, short-term B, individual C/D and support 3; BRD-Groupe Societe Generale: long-term BBB-/outlook stable, short-term F3 and support 2; Bancpost: long-term BBB-/outlook stable, short-term F3, individual D and support 2; Banca Comerciala Ion Tiriac: long-term B+, short-term B, individual D and support 5, long-term, short-term and support ratings on positive Watch; UniCredit Romania: long-term BBB-/outlook stable, short-term F3, individual D and support 2; ProCredit Romania: long-term BB+/ outlook stable, short-term B, individual D/E and support 3.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.