Banca Transilvania, the third biggest bank in Romania, posted a record net profit of EUR 544 million in 2015, over five times higher than in 2014, after taking over and successfully integrating Volksbank Romania, Austrian group Volksbank’s local subsidiary.

Banca Transilvania gained some EUR 371 million from this acquisition, representing the difference between the net value of the acquired assets and the price paid.

The acquisition also helped Banca Transilvania increase its total asset base by almost a third (32.6%), at the end of 2015 compared to end-2014, to EUR 10.5 billion. The bank’s organic growth was over 10%, according to the bank’s preliminary results.

The group recorded over 10% organic growth in lending and over 19% increase in deposits, not including the positive effect of the merger with Volksbank Romania. Overall, the loan base increased by 43% last year, reaching EUR 5.58 billion, while the deposits went up by 28%, to EUR 8.53 billion.

Banca Transilvania continued to focus on the SME and household segments. It granted almost 160,000 new loans totaling almost EUR 2 billion to companies and individuals. Its client base increased by 14% compared to 2014, reaching 2.15 million.

The bank’s operational revenues increased by 14.3%, to EUR 514 million, while the operating costs went up by 62%, to EUR 302 million, largely due to the extra costs related to Volksbank Romania’s integration. The operational profit thus went down by close to 20%, to EUR 212 million. However, this was compensated by the 50% drop in net risk costs, to EUR 74 million.

Thus, excluding the one-off gain from Volksbank’s takeover, Banca Transilvania’s gross profit went up by 22% last year.

Banca Transilvania is the only top financial group in Romania which is more than 50% controlled by Romanian private investors. However, the bank’s top investor is the European Bank for Reconstruction and Development (EBRD), which holds an 11.5% stake.

Banca Transilvania’s shares have been among the Bucharest Stock Exchange’s top performers in the past 12 months, with a 20% growth. The bank’s market capitalization currently stands at EUR 1.54 billion (as of February 15), which is 1.15 times its equity value on December 31, 2015 (P/B ratio).

Banca Transilvania reaches 2.2 million clients after Volksbank merger

EBRD reduces stake in Romania’s Banca Transilvania

Andrei Chirileasa, andrei@romania-insider.com