In Brief
Bulgaria susceptible to contagion risk Bulgaria is more susceptible to contagion risk from the Greek crisis than neighboring Romania or Turkey, because Greek banks control 28 percent of the Balkan country’s market, said Citigroup Inc. «Bulgaria stands out in terms of the presence of Greek banks, followed by Romania and Turkey,» Citigroup economists including Ilker Domac in Istanbul said in a report yesterday. «This, in turn, leaves the country more vulnerable to adverse shocks associated with Greek banks’ funding.» Greece’s struggle to finance the European Union’s widest budget deficit «could lead Greek banks to shrink their balance sheets in the region, which could in turn trigger a sharp contraction in credit availability,» according to the report. Still, there is no evidence that this sort of contagion is taking place, Citigroup said in the report. Lending growth in Bulgaria slowed to 5 percent in 2009 as the country grappled with its first recession in 12 years. (Bloomberg) German lenders can ride out the storm FRANKFURT (Reuters) – German financial institutions may have the third-largest exposure to Greece but are set to ride out the storm as long as the country’s fiscal crisis does not spread outside its borders, analysts said. Lenders to public sector borrowers – such as Commerzbank unit Eurohypo and Hypo Real Estate – as well as some Landesbanks have billions of euros in exposure. German creditors have a combined $43 billion outstanding with Greek borrowers, behind only French and Swiss lenders with $75 billion and $64 billion respectively, data from the Bank for International Settlements (BIS) show. Greece owes $302 billion to all foreign lenders, the most recent figures from the Bank of International Settlements (BIS) show – half the debt Wall Street investment bank Lehman Brothers had when it collapsed, which triggered massive write-downs as the value of banks’ assets plummeted. «Of all the listed banks in Germany, Commerzbank has the biggest issue in Greece because of Eurohypo,» said Merck Finck analyst Konrad Becker. Greece and Cyprus accounted for 5 percent of Eurohypo’s 70 billion euros ($96.54 billion) in state financing business in the first half of 2009. Athens pullout Intesa Sanpaolo SpA, Italy’s second-biggest bank, plans to shut its investment-banking unit in Athens, which offers fixed-income sales and advisory services, said two people familiar with the plan. The bank will keep an office in the Greek capital to advise clients on bond sales after deciding in May to move the rest of the operation to London, said the people, who declined to be identified before the move is completed. George Stylianopoulos also replaced Christoforos Sardelis, who ran the Athens unit of Banca IMI SpA until December, the people said. Before joining Banca IMI, Sardelis headed Greece’s Public Debt Management Agency since the organization was created in 1999 through 2004. (Bloomberg) Bulgarian trade Bulgaria’s trade deficit was halved in 2009 to 9.6 billion leva (4.9 billion euros) from 19.3 billion leva in 2008, the national statistics institute (NSI) said yesterday. The NSI said exports shrank to 23 billion leva, or 22.5 percent less than in 2009. Imports meanwhile reached 32.7 billion leva, or 33.4 percent less than the previous year. (AFP)
