S&P could downgrade Romania’s credit rating due to Greek crisis

Newsroom 25/06/2015 | 11:40

Standard & Poor’s could downgrade its credit ratings for Romania, Bulgaria, Macedonia, Albania and Serbia should their banking systems be affected by the Greek crisis, according to Reuters.

Given that Greek banks own ‘systemically important’ banks in these south-east European countries a ‘Grexit’ would mean bankrupt lenders will produce domino effects on their subsidiaries, according to the same source.

“We don’t rule out the possibility of government support (for banks),” S&P said in a report. “If such support substantially weakens governments’ fiscal and debt metrics, this could weigh negatively on our sovereign ratings,” reads the Reuters article.

Alpha Bank is the Greek bank with the largest network of subsidiaries in the region (Romania, Bulgaria, Serbia, Albania and Macedonia). Eurobank Ergasias and Piraeus Bank are present both in Romania and Bulgaria with the former also in Serbia, according to Reuters.

S&P estimates that the market shares of Greek banks’ subsidiaries’ range from about 15 percent of total financial system assets in Romania and Serbia to more than 20 percent in Bulgaria and Macedonia.

S&P currently rates Bulgaria at BB+ with a stable outlook, Romania BBB- stable, Macedonia BB- stable, Albania B positive and Serbia BB- with a negative outlook.

Photo: AFP Photo / Louisa Gouliamaki