Local banks made 391 million euros in interests and principalpayments on medium and long-term deposits of non-residents - whichgenerally reflect financing granted by foreign shareholders,through complex financial mechanisms.
The volume of medium and long-term deposits of non-residents was7.3 billion euros in July, a marginal rise on the previous month,according to data from the NBR (National Bank of Romania). Theall-time high of these deposits was hit in March - 7.44 billioneuros, but since then there has been a slight decline, followed bya stabilisation. Cumulated, since the beginning of the year, localbanks paid a little over one billion euros for these deposits,compared with 1.38 billion euros in the same period of lastyear.
"There could be higher repayments that overlapped in July," saysVlad Muscalu, an analyst with ING Bank.
Interest rate payments paid on funding have come to represent theonly means for foreign groups to collect money from localsubsidiaries, with the latter making increasingly low profits oreven losses because of the provisions set up to cover losses fromdefaulting loans.
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