Romania’s leading financial group Banca Transilvania takes over BRD Pensii

Romania’s largest financial group by assets, Banca Transilvania (BVB: TLV), confirmed that it bought BRD Pensii, the private pensions manager of BRD-SocGen group with 560,000 subscribers in both Pillar II and Pillar III, according to a note to investors sent by TLV.

BT Financial Group, through Banca Transilvania and BT Investments, reached an agreement with BRD-Groupe Societe Generale and Societe Generale Assurances for the acquisition of BRD Pensii (BRD Societate de Administrare a Fondurilor de Pensii Private).

“The acquisition is a strategic step of Banca Transilvania Financial Group, through which we develop the voluntary pension funds - Pillar III, already existing in our offer, and reach a new market, the privately managed pension funds - Pillar II, creating synergies between Banca Transilvania Group companies,” said Ӧmer Tetik, CEO Banca Transilvania.

The net asset value of the privately administered pension fund BRD Pensiii was over RON 5.4 billion (EUR 1.1 billion), and the total assets of the BRD Medio voluntary pension fund were over RON 232 million (EUR 46 million) as of December 31, 2023.

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. Ir 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.

(Photo source: the company)