International rating agency Standard & Poor's has recently downgraded Greek banks National Bank of Greece, EFG Eurobank, Alpha Bank and Piraeus Bank, all of which active in Romania, to CCC, from B, with a negative perspective. The agency motivated its decision by saying that Greek banks’ financial profiles are exposed to significantly heightened risks as a result of deterioration in Greece’s creditworthiness and Greek depositors’ perceptions of a possible government debt restructuring.

“The negative outlook reflects the possibility that the banks could be downgraded again if we believe the banks are likely to default on their obligations as defined by our criteria,” according to S&P.

“We believe the Greek banks face relatively short-term risks of pressure on their domestic retail funding as the public considers the implications of Greece’s need for additional funding from official creditors,” reads a S&P statement.

The National Bank of Greece controls Banca Romaneasca in Romania, while EFG Eurobank controls Bancpost. The latter and Alpha Bank rank among the first ten banks in the Romanian banking system, based on assets.

S&P notes that European Central Bank (ECB) collateralized funding represented most of rated Greek banks’ non-retail funding since the end of March this year. This is the result of Greek banks’ continued severe difficulties in accessing wholesale funding markets in the past few years, according to S&P.

editor@romania-insider.com

(Photo source: Piraeus)