Banca Transilvania, the largest lender to the economy in 2018: supporting customers while integrating Bancpost

● 196,000 loans for companies and individuals were granted in 2018 ●

●Over 9 billion lei was extended in loans to companies in Romania●

Banca Transilvania — a bank born and bred in Romania — has reached its 25th year of activity as the leading financier of the Romanian economy, drawing on the capabilities and capital built up over time to support the country’s entire private sector.

For BT, 2018 meant continued responsible organic growth, major investments in customers’ digital experience, the integration of Bancpost and the start of rolling out its business model at Victoriabank, in the Republic of Moldova.

“Banca Transilvania has continued to be the most active player in the banking sector, supporting Romania’s economy with the capital and the capabilities accumulated over our 25 years here at home. Over these years we have strengthened the bank’s capital base by retaining earnings, raising equity from shareholders and taking subordinated loans, so that we could keep up a brisk pace of lending across all categories of customers — from SMEs and start-ups to retail. As the largest financial group in Romania, we are aware of the responsibility we have to the Romanian economy, to our more than 3 million customers, 700,000 of whom are borrowers, to our over 31,000 Romanian individual shareholders, investors on the Bucharest Stock Exchange, and to the more than 7 million indirect shareholders through Pillar II pension funds”– declared Horia Ciorcila, Chairman of BT’s Board of Directors.

Banca Transilvania Financial Group’s assets reached 77.9 billion lei at year-end 2018, while loans increased to 38.02 billion lei. The Group’s consolidated net profit is 1,257.17 million lei, of which the bank’s net profit is 1,219.39 million lei, a result that also includes significant Bancpost integration costs. The bank’s operating profit rose to 1,801.41 million lei, driven by efficiency gains and business consolidation. Customer deposits amounted to 65.16 billion lei, of which 43.34 billion lei are retail deposits and 21.82 billion lei are corporate deposits.

Besides the merger between Banca Transilvania and Bancpost, 2018 also saw the merger of BT Leasing and ERB Leasing, a company acquired from Eurobank Group together with Bancpost and ERB Retail Services. BT Direct and ERB Retail Services, non-bank consumer finance institutions, will merge in the first part of this year.

Operational efficiency at Banca Transilvania remains at a comfortable level, at 49.9%.

At its meeting yesterday, on February 26, BT’s Board of Directors decided to propose to the General Meeting of Shareholders in April this year to distribute cash dividends from the 2018 profit totalling 818,121,781 lei (gross), representing a gross dividend of 0.17 lei per share. It will also propose to capitalise the remainder up to the total 2018 profit available for distribution.

Supporting entrepreneurs, individuals and the community in 2018:

• ≈65,000 fixed-rate loans were granted by the bank to individuals last year;
• BT has 3.7 million cards in its portfolio, representing a 21% market share of cards issued in Romania;
• the SME loan portfolio (SMEs as per the European definition) stands at 15.5 billion lei;
• the balance of mortgage/home loans is 11 billion lei;
• 125 BT branches nationwide were refurbished during 2018;
• 23 million lei invested in communities, education and sport across over 1,000 social responsibility and engagement projects last year.

Heavy investment in digitalisation is delivering visible business results:

• Almost 200 million transactions were made last year with BT cards. Every second there are 6 transactions with BT cards;
• there are 475,000 credit cards in the BT Financial Group portfolio, accounting for approximately 35% of credit card transactions at merchants in Romania. Over 60,000 transactions take place every day with BT credit cards;
• Banca Transilvania manages 50,000 POS terminals, representing 25% of the terminals installed in Romania;
• on average, 2 million operations were processed daily through BT last year;
• the number of BT24 Internet Banking users exceeded 1 million, up 14% year-on-year, while Mobile Banking users number 560,000, up 34%;
• Internet Banking transaction volumes are up 20%, and Mobile Banking volumes are up 54% year-on-year;
• BT Pay, Romania’s first wallet app, launched in January 2018, has 12 features developed over 10 months — giving just as many options to manage money and cards 24/7: contactless payments, money transfers, category tracking of card purchases, permanent or temporary card blocking, etc. Number of phone payments at merchants and money transfers between app users rose by 35% in Q4 2018 versus Q3, while transaction volumes increased by 50%;
• solutions complementary to banking, offered via the online BT Store platform, have been accessed by an average of 100 entrepreneurs per month since its launch in August 2018;
• at year-end, BT had almost 350 multifunctional BT Express Plus ATMs, enabling self-service banking such as cash deposits or 24/7 foreign exchange. The number of cash deposits doubled in December 2018 versus January of the same year, reaching approximately 400,000.

Other financial information & Fitch rating:

• the non-performing exposure ratio under the EBA indicator is 4.97% as at December 31, 2018;
• total provisioning coverage of non-performing exposures under EBA standards is 94%. Including collateral, the coverage ratio is 133%;
• the bank’s capital adequacy ratio excluding the 2018 profit is 18.59%, and 21.53% including it;
• in January this year, Fitch Ratings affirmed Banca Transilvania’s Long-Term IDR at ‘BB+’ with a Stable Outlook and the Viability Rating at ‘bb+’.

Additional tax on assets

Pending a decision regarding the additional tax on bank assets, Banca Transilvania reiterates that banks’ capital and capabilities have been built over time and can be lost quickly in the absence of continued investment, and that Romania needs a strong banking system and higher credit growth to narrow the gap with Western countries.

Reducing the profit available for capitalisation will slow the development of the Romanian banking system and will affect economic growth. Nonetheless, BT, as a Romanian bank and entity, will stand by its customers so they are affected as little as possible by any such tax.

BT, +50 places in the Brand Finance Banking 500 ranking

BT climbed 50 places in the Brand Finance Banking 500 2019, published by The Banker, on a 39% increase in brand value to USD 242 million, and an improvement in brand rating from A+ to AA versus 2018. Banca Transilvania is the only Romanian banking brand in this year’s ranking.

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Preliminary financial results for 2018 are available on BT’s website, https://www.bancatransilvania.ro/actionari/rezultate-financiare/, on February 27 this year, starting at 8:30.