Second-quarter results confirm the start-of-year trend and the 2016 budget

• 75,000 new loans (retail, SME and corporate)
• Operational efficiency continued on a positive trend, alongside higher transaction volumes and lower costs for customers
• The number of transactions processed through BT rose by almost 15% versus the same period last year
• The card portfolio reached 2.64 million, and the number of card transactions increased by almost 25% compared with June 30, 2015
• BT is in the midst of optimizing customer relationships to increase satisfaction and loyalty
• BT’s branch network modernization program continued at an accelerated pace this year
• Serving its more than 200,000 SME clients remains a priority

Banca Transilvania’s operating income reached RON 1,415.2 million and net profit was RON 458.3 million. The result includes the impact of non‑recurring items (Visa Europe, additional provisions arising from the datio in solutum law), with a positive gross impact of approximately RON 11 million on the bank’s results. BT’s assets stand at RON 47.89 billion, net loans total RON 25.8 billion, and customer deposits are RON 39 billion. Banca Transilvania continues to develop as a Financial Group, focusing on its subsidiaries, which are showing positive dynamics in their markets: investment banking, leasing, operating leasing, securities investments, etc.

Horia Ciorcila, Chairman of BT’s Board of Directors, said: “We have a strong base, very solid capital, organic growth and a focus on new business segments — Corporate Banking, microfinance and the creative industries. The results achieved in the first half confirm the start‑of‑year trend and the objectives we presented to our shareholders. We continue to finance the Romanian economy and we are optimistic about our future performance, while at the same time we are prepared for potential challenges stemming from a difficult economic environment, both domestically and in Europe.”

Ömer Tetik, Chief Executive Officer of Banca Transilvania, said: “Customers are our most important asset. We are focused on redesigning workflows and processes to fundamentally transform customer relationships. We are investing significantly in innovation, customer service and technology. We are confident the results will follow. We are ready to capture growth opportunities in the market.”

BT’s current activity in the first half of this year:

• BT’s net profit is RON 458.3 million;
• The number of transactions processed through BT accounts increased by almost 15% versus the same period last year, and operating fee income grew at the same 15% pace;
• Banca Transilvania granted SME clients nearly 10,000 new loans in the first six months;
• Customers who joined from Volksbank Romania have opted for over 55,000 products offered by Banca Transilvania.
• The loan‑to‑deposit ratio was 66% at the end of the first half of 2016;
• BT’s operational efficiency confirms the first‑quarter trend, with a cost‑to‑income ratio of 39%, even though the impact of the full‑year contribution to the Deposit Guarantee Fund was recognized in this half. If we exclude the effect of the Visa Europe transaction, amounting to RON 185 million, the cost‑to‑income ratio remains at a comfortable 44.9%.
• As at June 30, 2016, Banca Transilvania had a portfolio of 2.64 million cards, which generated transactions nearly 25% higher than in the same period of the previous year. The bank’s market share by card transaction volume is close to 20%. Through the Star loyalty program, Banca Transilvania has a portfolio of 300,000 credit cards.

Other financial information:

• At June 30, 2016, BT recorded net impairment and provisioning expenses of RON 325.2 million (including the impact of writing off RON 365 million); most of the provisions booked as expense during the second quarter of this year are prudential in nature, reflecting the results of stress tests related to the entry into force of the datio in solutum (Darea in plata) law and continuing Banca Transilvania’s conservative approach to credit risk management;
• Non‑performing loans more than 90 days past due account for 9.17% of BT’s total loan portfolio;
• Coverage of non‑performing loans with specific provisions and mortgage collateral remains at a comfortable 124.63%, in line with the bank’s risk appetite;
• BT’s capital adequacy ratio, including H1 2016 profit, is 18.17% (16.62% excluding profit).

The financial statements as at June 30, 2016 are reviewed; those as at December 31, 2015 are audited.