Romania’s Banca Transilvania posts 18% profit increase on growing operations

Banca Transilvania, the third local bank by assets, closed the first half of 2014 with a net profit of EUR 47.7 million, 18 percent higher than for the same period of 2013. At the end of the first six months, the bank’s assets reached EUR 5.18 billion, which is 5.7 percent more than at the end of 2013.

The bank’s net loan portfolio increased by 3.8 percent compared to the end of 2013, to EUR 3.91 billion, while the total deposits from customers were more than 4 percent higher, at EUR 6.08 billion.

During the first semester of 2014, the bank granted 66,300 new loans to companies and retail clients, amounting to EUR 1.74 billion.

“The first half of 2014 meant overall growth for BT – from profit to operational volume and total assets. We have reached our goals to raise efficiency of processes and increase operational revenues, while maintaining lending in support of the Romanian economy. Our main focus continues to be loan portfolio and revenue growth,” said Ömer Tetik, Banca Transilvania’s CEO.

Banca Transilvania saw its operating income grow by almost 24 percent, to EUR 204 million, due to higher net interest income. Operating expenses increased just 5.5 percent, to EUR 90.8 million. Thus, the bank’s operating profit was up 43 percent, to EUR 113 million. This allowed the bank to compensate for an 82 percent increase in risk costs, to EUR 55 million, as it removed non-performing loans worth EUR 72 million from its balance sheet.

Non-performing loans, with payment delays of more than 90 days, represent 12.3 percent of Banca Transilvania’s credit portfolio, end of the first half 2014, being below the average of the Romanian banking system, of 20 percent.

“We consider the first half of 2014 results to be satisfactory. With a better cost/income ratio and a prudent coverage ratio, we feel prepared to face market challenges, across all business lines,” said Horia Ciorcila, Banca Transilvania’s president and one of its main shareholders.

Andrei Chirileasa, andrei@romania-insider.com

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