Banks paid 329m euros in Q1 for deposits attracted from shareholders

Local banks paid 393 million euros in the first quarter of the year for deposits attracted from foreigners, mainly from shareholders, reveal data from the NBR (National Bank of Romania).
During the same period of last year, banks paid 388 million euros, but the volume of deposits was 2.24 billion euros lower back then. In the meantime, however, interest rates offered by local banks have fallen significantly.
The volume of deposits attracted in the medium and long term by non-residents climbed to a record high of 7.44 billion euros in March, while amounts attracted in March 2009 stood at 5.2 billion RON.
“This does not necessarily indicate an overall increase in amounts deposited, but merely a migration from short terms to long terms, in the context where the NBR eliminated minimum reserve requirements for two-year foreign currency denominated liabilities,” comments Ionut Dumitru, chief economist of Raiffeisen Bank.
Nonetheless, he adds that one should not rule out the possibility that this increase may come as a result of banks resorting to capital increases through subordinated loans.