Cinteza, NBR: Solvency is relatively high in the banking system

Almost 40% of foreign funding attracted by banks until the end of last year, i.e. over 9.5 billion euros are due in 2009, Nicolae Cinteza, director of the Supervision Department of the NBR (National Bank of Romania), told ZF in an interview. In all, banks have debts worth 24.3 billion euros with foreign financial institutions. He says talks with banks have revealed that almost 80% of loans attracted from parent banks, which are due in 2009, are "quite likely" to be rolled over until 2010, which means that part of the funding needed by Romania is ensured. Cinteza has been at the helm of the NBR's Supervision Department for almost two decades now, and is very familiar with the inner workings of the banking system. Even though the deputy governors of the NBR in charge of supervision have changed over time (3 up until now), Cinteza has kept his position. He is one of the closest collaborators of NBR Governor Mugur Isarescu. The head of supervision says last year he penalised bank chairmen, without providing details as to the reasons. In the context of an abrupt depreciation of the RON, Cinteza expresses concern over a possible accelerated rise in the number of non-performing loans and says he will request that capital increases be conducted for banks whose solvency ratio tends to approach the minimum 8% mark. Last year there were two banks whom the NBR asked to increase their capital. He says that in order to avoid a systemic risk, a credit institution with solid assets and sound prudential indicators "will always have access to liquidity" from the NBR over a determined period of time and "if their reasons are justified." Cinteza says solvency for the overall banking system is "relatively high", without being more specific. He states his satisfaction that banks have shown towards improving the credit/deposit ratio, which reached a 130% peak last year because some players were only interested in lending. However, he says that the interest rate rise for deposits should not create "distortions and incorrect perceptions on the market", adding that a very high interest rate for deposits does not rule out the possibility that a bank is performing poorly.