Moody's: Romanian banks stable

Moody's Investors Service said that the outlook for the Romanian banking system is stable.

While Romania's under-banked economy provides good prospects for growth, at the same time credit risks remain high, Moody's noted.

"The banks' financial strength ratings reflect the country's improving operating environment, with the political and economic alignment with the European Union and solid economic performance having spurred the growth of the banking sector," said Constantinos Kypreos, a Moody's analyst.

The active involvement of foreign banks in the Romanian market has also raised the level of expertise in the system, contributing to the banks' franchise development, while strengthening the sector in terms of technological expertise, product support and transfer of banking know-how, as well as providing capital and funding support, the agency noted.

At the same time, the current ratings also reflect Moody's concerns with regard to the high credit risks embedded in the banks' operations, especially in light of a CAGR of 42% in lending over the past three years.

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