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Foreign Banks in Romania Withdraw 700 Million Euro Since March - Bloomberg

Nov 11, 2009, 11:58:14 AMArticle by Doinita Dolapchieva
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BUCHAREST (Romania), November 11 (SeeNews) – The foreign-owned banks operating in Romania, which represent more than 70% of the industry, have withdrawn 700 million euro ($1.05 billion) from their branches in the Balkan country since March, Bloomberg reported on Tuesday.

Foreign Banks in Romania Withdraw 700 Million Euro Since March - Bloomberg

“It’s not a large sum and the flow is reversible,” Bloomberg quoted Florin Georgescu, deputy governor of Romania's central bank, as telling a seminar in Bucharest.

The money represents about 2.0% of the foreign banks’ business in Romania, he added.

The International Monetary Fund (IMF) and Romania’s government in August signed an agreement with the country’s biggest foreign-owned banks, including the top two lenders - Erste Bank's Banca Comerciala Romana (BCR) and Groupe Societe Generale's Banca Romana de Dezvoltare (BRD) -  to increase capital flows to their subsidiaries by March next year and maintain funding.

The agreement was negotiated as part of a 20 billion-euro loan package from international lenders led by the IMF to support Romania's crisis-hit economy.

Georgescu said the IMF and the government will meet again with key bankers on November 18 for further talks, Bloomberg reported.

Also on Tuesday, Georgescu said the combined net income of Romania’s banks fell by an annual 81% to 680 million lei ($237 million/158 million euro) in the first nine months as lending growth slowed and banks took provisions against bad loans, Bloomberg added.

(1 euro= 4.2977 Romanian lei)

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