Local banks made 391 million euros in interests and principal payments on medium and long-term deposits of non-residents – which generally reflect financing granted by foreign shareholders, through complex financial mechanisms.
The volume of medium and long-term deposits of non-residents was 7.3 billion euros in July, a marginal rise on the previous month, according to data from the NBR (National Bank of Romania). The all-time high of these deposits was hit in March – 7.44 billion euros, but since then there has been a slight decline, followed by a stabilisation. Cumulated, since the beginning of the year, local banks paid a little over one billion euros for these deposits, compared with 1.38 billion euros in the same period of last year.
“There could be higher repayments that overlapped in July,” says
Vlad Muscalu, an analyst with ING Bank.
Interest rate payments paid on funding have come to represent the
only means for foreign groups to collect money from local
subsidiaries, with the latter making increasingly low profits or
even losses because of the provisions set up to cover losses from
defaulting loans.