Banca Transilvania, the leading financial group in Romania by assets, has reportedly reached the level of technical and legal details for the takeover of the BRD Pensii division from BRD-SocGen, according to sources familiar with the deal quoted by Profit.ro. In the race for BRD’s pension management division was Vienna Insurance Group (VIG) as well.

The takeover would allow Banca Transilvania to enter the Pillar II pensions market at a time when individual contributions increased to 4.75% of the gross wage from 3.75% previously. It is active only on the voluntary pension market (Pillar III), a market ten times smaller and not so predictable as that of the mandatory pensions – as of this moment.

BRD Pensii is the smallest of the pension funds on the Romanian market, with modest performances.

BRD Pensii operates both in the Pillar II scheme, where its fund is the smallest in terms of contributors and assets, and the Pillar III scheme.

Both of BRD Pensii’s funds, mandatory and voluntary, posted the weakest performances as of the end of 2023. Altogether, the two funds sum up to almost 600,000 contributors – 6.8% of the total number of contributors to the seven Pillar II and ten Pillar III funds. Their combined assets are RON 5.67 billion (EUR 1.14 billion) – 4.3% of the total combined assets of Pillar II and III funds. 

BRD decided in the middle of last year to sell BRD Pensii, especially since the company was at the centre of a fraud scandal of RON 23 million in the summer of 2022. Failure to reach a critical mass in terms of contributors is another reason.

The disappointing performances posted by BRD Pensii’s funds are currently pushing contributors toward other fund managers on the market.

iulian@romania-insider.com

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