16.5 C
May 15, 2021

Banking associations concerned recent accusations could dent trust in banking sector

The Romanian Banking Association (ARB) and the Romanian Bank Employers Council (CPBR) expressed their concern at the recent accusations levelled against the banking sector, as they fear they may dent trust in the system and the banks’ confidence in the already affected business climate, the two organisations said in a release.

“The Romanian Banking Association and the Romanian Bank Employers Council make the following clarifications as a result of persisting public allegations about Romania-based credit institutions either taking their profits out of the country or deliberately making losses to avoid paying profit tax. The credit institutions have been and stay open to constructive and edifying substantive discussions with the competent authorities, either individually or through the banking sector’s representative organizations,” the release says.

ARB and CPBR dismiss such generalized accusations, considering that should the authorities identify whatever deviations with certain credit institutions, they need to be clarified and settled individually, not by vilifying the entire banking sector, the release further states.

According to the said industry organizations, the financial losses reported by the Romania-based credit institutions are the result of the global financial crisis.

“Moreover, we point out that the reported losses have resulted in the need to supplement the equity capital, so that far from negligible amounts have entered Romania. The banks’ losses were exclusively borne by their shareholders, and the capital contribution over the entire banking system from 2008 to 2016 was of 3.5 billion euro. We reiterate that the Romanian banking sector has been through the global financial crisis without a single dime being spent by the Romanian state, as was the case with another 23 EU countries,” the release goes on to say.

According to the two organizations, at the request of the authorities, the European banks that are also present in Romania have kept their exposure to Romania through the “Vienna Agreement”, supporting the Romanian state also by financing public debt at a time when financing from foreign markets was gridlocked.

“As we have already mentioned, beyond the effects of the crisis, a cause for the low profits of the banking sector are efforts to reduce lending risk by covering non-performing loans with provisions, reducing interest rates, but also changing the calculation method by switching to the International Financial Reporting Standards (IFRS) starting with 2012. The measures were based on the regulations of the National Bank of Romania and of the European Banking Authority on banking activities and International Financial Reporting Standards. ARB and CPBR reiterate the commitment of the credit institutions to taking up an active role in promoting an open and constructive dialogue with the authorities, as they will continue to call for the organization of working sessions with the Ministry of Public Finance and the National Tax Administration Agency to present the position and the arguments of the banking community and understand their priorities and challenges,” states the release.

Related posts

Total amount of population’s deposits grows in November by 1.09pct

Nine O' Clock

Cooperation protocol signed between Constanta – Ningbo Zhoushan ports

Nine O' Clock

Raiffeisen Property Holding International announces the new management team for SkyTower and its local operations