SOFIA/SKOPJE (Reuters) - Petar Bakhchevanov withdrew some cash from an ATM in Bulgaria’s capital on Monday as a test to make sure the deepening debt crisis in neighboring Greece had not spread to the Greek-owned bank where he keeps his savings.
Millions of people in ex-Communist Bulgaria, Macedonia, Albania, Serbia and Romania have deposits in banks owned by Greek lenders, putting this corner of south-eastern Europe in the frontline if there is contagion from the Greek crisis.
Central banks in Macedonia and Serbia introduced extra restrictions on the movement of capital between local subsidiaries and their Greek parents, saying the were taking precautions against any spillover from Athens.
“After watching the news on TV, I just wanted to check if everything is okay and I can withdraw money from my account,” said Bakhchevanov, outside a branch of Piraeus Bank Bulgaria, a subsidiary of Greece’s Piraeus bank (BOPr.AT).
Bakchevanov was able to get at his money. He took out 100 Bulgarian levs, or around $50, from the ATM, and went inside the branch where he said bank staff had reassured him he did not need to worry about his deposit.
That reflected the picture across the region: banks said it was business as usual, with no Greek-style restrictions on withdrawals and no evidence of any queues outside the branches of Greek-owned banks.
Regional central banks said they had, in effect, quarantined the subsidiaries of Greek banks, cordoning off their capital from their parents so they could not be rocked by the turbulence in Greece. For a factbox, click on
Still, Greek’s ex-Communist neighbors were in nervous, watchful mode as they observed the drama in Athens.
With Greek banks owning 20 percent of the banking sector in some countries the exposure is real, and the region’s economies have historically been fragile, so it would not take a lot to push them into crisis too.
Macedonia’s central bank said on Sunday night it ordered lenders to pull their deposits from Greek banks and imposed temporary measures to stop an outflow of capital from Macedonian subsidiaries to Greek parent banks.
“We have not noticed any activities out of the ordinary,” a Macedonian central bank official, who did not want to be named, said on Monday. “We also haven’t seen any unusual withdrawals of deposits by the population.”
In Serbia, where the four Greek-owned banks have a combined market share of 15 percent, the central bank announced similar restrictions on transactions with parent companies in Greece.
Nevertheless, banks throughout the region were open, taking deposits, and even issuing new loans.
“We are doing business as usual,” said a spokeswoman for United Bulgarian Bank, the country’s fourth largest lender which is owned by National Bank of Greece (NBGr.AT).
“For us, this Monday is a normal working day,” Piraeus Bank Bulgaria said in a statement sent to Reuters.
In Serbia, a dealer in the local subsidiary of a Greek bank said interbank operations with Greece had stopped because the banks there were shut, but he said otherwise operations were carrying on as normal.
A trader at a Greek-owned bank in the Romanian capital also said interbank operations with Greece were limited, but that this had been the case for months already.
“We don’t like it but we have survived it until now,” said the trader. “It’s not something we cannot handle.”
In Albania, there were no queues in front of branches of the four Greek-owned banks, and an official said there were no plans to follow Macedonia in imposing additional restrictions on movements of capital. “Why should we?” the official said.
In the center of Macedonia’s capital, Skopje, a branch of Stopanska bank — owned by National Bank of Greece — was functioning as normal, according to a female teller.
A 39-year-old customer who gave his name as Dimitar had just been in to sign a contract on a loan so he could renovate his apartment. “I don’t think what’s happening in Greece is coming here,” he said.
However, markets were less sanguine.
The Romanian leu lost 0.8 percent to the euro EURRON= while the Serbian dinar fell 0.4 percent EURRSD=.
Balkan eurobonds also sold off, with Bulgaria’s 2024 1.5 billion euro issue down almost 2 cents in price and Romania’s 2024 1.2 billion euro issue losing 0.8 cent. Serbia’s 2020 dollar bond fell half a cent.
Additional reporting by Tsvetelia Tsolova in SOFIA, Luiza Ilie in BUCHAREST, Benet Koleka in TIRANA, Ivana Sekularac in BELGRADE and Sujata Rao in LONDON; Writing by Christian Lowe; Editing by Anna Willard