Fitch: Bank Asset Quality In Romania Remains Weak, Could Deteriorate Further

Fitch has Romanian banking system at ‘D’, on a scale from ‘A’ (high quality) to ‘E’ (low quality). The outlook is stable.

“Trends in asset quality were mostly negative across CEE in 2011, driven by slow economic growth and rising unemployment (Bulgaria, Romania, Poland, the Czech Republic, Slovakia), and exacerbated in Hungary, Romania and to some extent Poland by weaker local currencies,” the ratings agency said in its latest outlook report on the banks in central and eastern Europe.

Fitch expects parent banks to gradually withdraw funding from CEE subsidiaries, even if evidence of deleveraging has so far been limited.