Banca Transilvania reports solid loan growth

in the first three months of this year

• BT granted 42,000 loans to companies and individuals in the first quarter of 2019.
• Over 2 billion lei in loans were granted to companies in Romania in the first three months of this year.
• Over 3 million transactions per day — an all-time high reached by BT in February 2019.
• Banca Transilvania has 63.7% Romanian capital.

Following the successful completion of the Bancpost integration almost four months ago, at the end of 2018, Banca Transilvania started this year with positive financial results, continuing to support economic growth and the Romanian business environment. In February 2019, BT marked 25 years since its founding, when a group of Cluj-based entrepreneurs laid the foundations of one of the most successful stories of Romanian capital.

At BT’s General Meeting of Shareholders, held on April 24, 2019, shareholders approved the proposal of Banca Transilvania’s Board of Directors regarding the allocation of 2018 profit through the payment of a gross dividend of 0.17 lei per share. This decision is based on Banca Transilvania’s positive results and capital surplus. Shareholders also approved a share capital increase of approximately 400.8 million lei by issuing approximately 400.8 million free shares. Banca Transilvania has 63.7% Romanian capital and over 30,000 Romanian individual shareholders.

As at March 31, 2019, Banca Transilvania’s assets amounted to 75.9 billion lei, and loans increased to 37.04 billion lei. Customer deposits totalled 62.7 billion lei, of which 43.45 billion lei are deposits of individuals and 19.24 billion lei those of legal entities.

Banca Transilvania’s net profit was 436.07 million lei, reflecting efficiency gains and business consolidation. Operating efficiency remains at a comfortable level at Banca Transilvania, at 47%, calculated with the annualised impact of the contributions to the Bank Deposit Guarantee Fund and the Resolution Fund. Starting with the 2019 financial year, GEO 19/2019 entered into force, regulating how the asset tax is calculated for banking institutions. In accordance with International Financial Reporting Standards IFRIC 21 “Levies”, the bank can recognise the expense for the asset tax for 2019 only on December 31, 2019, because it depends on the value of net financial assets as at December 31, 2019. Payments made during 2019 for the asset tax will be treated as prepayments until December 31, 2019, when the final asset tax for the 2019 financial year will be recognised. Nevertheless, Banca Transilvania has estimated an asset tax of 136 million lei for the 2019 financial year. Based on this estimate and a pro-rata calculation, if the bank were to record the impact of this tax for the three-month period ended March 31, 2019, net profit at March 31, 2019 would be 407.51 million lei. 

“We focused on completing the integration of Bancpost into Banca Transilvania as quickly and efficiently as possible, precisely so we could focus on the business and on supporting the economy and Romanian entrepreneurs. Our plan worked very well and we had a first quarter of solid loan growth and a higher number of transactions carried out for our clients. BT granted 42,000 loans to companies and individuals in the first quarter of this year. In terms of transactions, in February we reached an all-time high of over 3 million per day.” - said Ömer Tetik, Chief Executive Officer, Banca Transilvania.

Supporting entrepreneurs, individuals and the community in the first months of 2019:

• ≈18,000 fixed-rate loans were granted by the bank to individuals in the first quarter;
• 11 billion lei is the outstanding balance of mortgage/real estate loans;
• ≈16 billion lei is the SME loan portfolio (according to the European definition of SMEs);
• BT has 3.8 million cards in its portfolio, which means a 21% market share of cards issued in Romania;
• 490,000 credit cards are in Banca Transilvania’s portfolio.

Significant investments in digitalisation are having visible effects on the business:

• Every second there are 8 transactions with Banca Transilvania cards. Nearly 61 million transactions were carried out in the first quarter of 2019 with BT cards;
• The BT Pay app has over 220,000 users. There is continued transactional growth: the number of phone payments and money transfers between app users is up 32% in the first quarter of this year compared with the last quarter of 2018;
• The number of BT24 Internet Banking users has exceeded 1.18 million, up 20% compared with the same period last year, while Mobile Banking users number 634,000, up 55%;
• Transaction volumes via Internet Banking are up 25%, and via Mobile Banking up 101% compared with the same period last year;
• Of BT’s nearly 1,600 ATMs, close to 370 are BT Express Plus multifunctional cash machines, enabling self-service operations such as cash deposits or 24/7 foreign exchange. In the first three months of this year, the number of cash deposits via BT Express Plus exceeded 1,300,000, which means almost 450,000 cash deposits per month;
• Banca Transilvania is increasingly ready to collaborate with fintechs: BT launched, in March this year, the platformBT Open Banking (BT Api Store), which enables fintechs and other technology companies to test integration with BT, to present the bank’s services such as: displaying balances online, transaction history and initiating transactions through external platforms to Banca Transilvania;
• The most recent step towards “going digital” was in April this year, when BT became one of the pioneers of Instant Payments in Romania. The service ensures round-the-clock transfer of funds (lei) in less than 10 seconds between banks that join this system.

Other financial information & Fitch rating:

• The non-performing exposure ratio, under the EBA definition, is 4.9% at March 31, 2019;
• The coverage of non-performing exposures with total provisions under EBA standards is 94%. If collateral is also included, the coverage ratio is 134%;
• The bank’s total capital ratio without 2019 profit is 18.67%, and including profit it is 19.67%;
• In January this year, Fitch Ratings affirmed Banca Transilvania’s Long-Term Issuer Default Rating (IDR) at ‘BB+’, with a Stable Outlook, and the Viability Rating at ‘bb+’.

The report for Q1 2019, prepared in accordance with the provisions of Article 67 of Law no. 24/2017 on issuers of financial instruments and market operations, will be available on the Banca Transilvania website starting April 25, 2019. The financial statements as at March 31, 2019 and March 31, 2018 are unaudited and not reviewed.