Five foreign banks active on the Romanian market have failed the European Central Bank’s stress test. These include the National Bank of Greece, Eurobank and Piraeus Bank, Italy’s Veneto Banca, and Austria’s Volksbank. The National Bank of Greece runs Banca Romaneasca on the Romanian market, while Eurobank controls Bancpost. Piraeus Bank, Veneto Banca and Volksbank operate under their own brands. The banks controlled more than 11 percent of the total assets in the Romanian banking sector at the end of last year, according to Romania’s National Bank (BNR).
Eleni Papoula, an analyst at Berenberg, told Bloomberg that the banking market in eastern Europe still carries high risks and offers low rewards. She said that bad loans and risk costs are increasing. With declining rates and the need to fund locally, she warned that return on equity is falling.
