Although management teams of Turkish banks operating in Romania claim there is nothing to worry about and the institutions they run are not facing problems triggered by the Turkish banking crisis, things are not as quiet as they seem.
According to banking sources, at the end of last week, several big clients of Turkish capital banks tackled the possibility of transferring deposits and operations to other banking institutions, following the financial crisis that affected Turkey again last week.
“Last Thursday and Friday, several clients of Turkish banks visited us in order to find information about commissions, account transfer and opening procedures,” the above-quoted sources say. Demirbank, Finansbank, RoBank, BTR, RIB and UGBI Bank are the Turkish banks currently operating on the Romanian market.
Moreover, the quoted sources say that several banks, other than Turkish, but which used to have exposure to Turkish banks, are now coping with problems.
Big names in the Romanian banking system speculated the liquidity crisis of Turkish banks and accepted to loan them at an interest rate of 7% for dollar-denominated deposits, while the market interest was 3-4%.
They may not receive their money back, as most placements of Turkish banks operating on the Romanian market headed for Turkey, where interest rates were favourable for speculations, as they promised high yields.
Investments were made in Turkish liras and a 30% loss in the value of their initial investments is predictable. On the other hand, Turkish companies operating on the Romanian market and having rolled their trade activities through Turkish banks may trigger additional troubles.
Attempting to save their business from Turkey, these investors are likely to repatriate profits posted in Romania and subsequently will pressure Turkish banks to withdraw their deposits.
Romanian exporters having sold goods worth 6.5 billion dollars in Turkey last year could hardly recoup their money back due to payment difficulties of Turkish clients since the lira dropped.