Serbian and Macedonian authorities reacted promptly to Greece imposing capital controls through the introduction of restrictions on movement of capital between local bank subsidiaries and their Greek parent banks. For the rest, banks in Macedonia and Serbia remain open, doing business as usual.

Impact on country risk

The banking sector exposure on Greece is significant in Macedonia, Serbia and Albania. Indeed, subsidiaries of Greek banks account for more than 20% of banking sector assets in Macedonia and around 15% in Serbia and Albania. On the positive side, the loan-to-deposit ratio of Greek subsidiaries is lower than 100% in Macedonia and Albania but well above 100% in Serbia. This means that Greek subsidiaries are not reliant on wholesale funding to fund loans in Macedonia and Albania, which is not true for Greek subsidiaries in Serbia. If no solution is found in Greece, neighbouring countries are likely to suffer somewhat from the fallout of the Greek economic woes due to the financial linkages (via the banking sector). However, the impact is likely to be limited as the real linkages with the Greek economy are relatively limited.

Analyst: Pascaline della Faille, p.dellafaille@credendogroup.com