Romania’s BVB-listed banks to distribute robust dividends after sharp capital gains

Romanian banks Banca Transilvania (BVB: TLV) and BRD-SocGen (BVB: BRD), with market capitalizations of EUR 4.4 billion and EUR 2.9 billion, respectively, summoned general shareholder meetings for April 25 to approve the distribution of RON 1 billion (EUR 200 million) as dividends each, out of the 2023 profits.

The dividends would result in 4%-6% yields that, coming on top of the significant 60%-70% y/y capital gains, reflect the record profitability of the country’s banking system, according to Ziarul Financiar and Profit.ro.

The two banks reported net profits of EUR 500 million (TLV) and EUR 330 million (BRD), respectively.

The dividends paid by the two banks would result in gross yields of 4.5% (TLV) and 6.24% (BRD). Such yields are moderate to small compared to those generated by the energy companies – but the shares of the two banks traded at the Bucharest Stock Exchange (BVB) also generated capital gains.

The shares of the two banks surged by 61% y/y and 73% y/y, respectively, significantly above the blue chips’ index BET (+39.3% y/y) and also above the BET-NG index of the energy companies.

The two banks are currently (March 25) traded at price-earnings ratios (PERs) of 7.3 and 9.7, respectively.

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