Greek group National Bank of Greece (NBG), which owns local lender Banca Romaneasca, posted a loss of EUR 1 million in Romania in the first quarter of 2011, after a profit of EUR 12 million recorded during the same period last year, shows the bank's report.

NBG posted an increase of 16 percent in provisions on the Romanian market, up to EUR 12 million, from a level of EUR 10 million recorded in the same period last year.

The bank's balance of loans at the end of the first quarter stood at EUR 2.23 billion, down 3 percent compared to the same period in 2010. The corporate loans portfolio stood at EUR 1.2 billion at the end of March this year, down 7 percent over the same month last year. Deposits in Romania fell by 5 percent from the first quarter of 2010, at EUR 1 billion, but rose  by 15 percent compared to the end of last year.

NBG recorded a net interest income of EUR 22 million on the Romanian market in the first quarter, down 26 percent over the same period last year, when it stood at EUR 30 million, while fee income fell by 73 percent to EUR 3 million.

National Bank of Greece Group is present in Romania through Banca Romaneasca, NBG Securities Romania, the  insurance - reinsurance Garanta company, NBG Leasing IFN SA and NBG Factoring Romania.

According to Romanian Central Bank (BNR) sources quoted by Romanian media, BNR can offer financing to Greek banks, if needed, if they put their real estate assets in Romania as collateral. This came into discussion as the crisis in Greece has affected companies there, many of which, including banks, have subsidiaries in Romania. The main threat is for Greek banks to cut the financing lines to their Romanian subsidiaries in an attempt to control costs and losses.

Irina Popescu, irina.popescu@romania-insider.com, editing by Corina Saceanu, corina@romania-insider.com