Banca Transilvania, the biggest lender in Romania by assets, increased its net profit by a third in 2019 compared to 2018, to RON 1.62 bln (EUR 342 mln), due to higher operational results and lower tax on profit paid to the state, according to the preliminary financial report released on Thursday, February 27.
The bank’s board of directors will propose to the shareholders the distribution of around 60% of the profit in 2019 as cash dividends, Banca Transilvania said in a press release. Thus, the total dividends could amount to RON 970 mln (over EUR 200 mln) and the dividend per share to RON 0.186, resulting in a dividend yield of 7.3% (considering the current share price of RON 2.52 per share).
The total dividends and the dividend per share are higher than last year, while the dividend yield is similar, given that the bank’s shares have gained about 28% in the last 12 months. Banca Transilvania’s shares gained 1% on Thursday, after publishing the financial report, amid a weak trading session in which the main index of the Bucharest Stock Exchange – BET was down 0.5%.
Banca Transilvania currently has a market capitalization of RON 13 billion (EUR 2.7 bln). Close to 65% of the bank’s shares are Romanian owned, with 31,000 direct investors and about 7 million indirect investors – via pension funds.
Strong lending activity continued in 2019
Last year brought higher results for Banca Transilvania and was another year during which the bank had a strong contribution to the local economy, with about 223,000 loans granted to companies and individuals. The bank’s new loan production was over RON 10.5 billion (EUR 2.2 bln) for company clients - thus supporting their business development, economic growth and job creation, especially in sectors like manufacturing, retail, IT, healthcare, agriculture, and construction. Over 9,600 Romanians bought residential properties with Banca Transilvania mortgage loans, according to a press release issued by the lender.
The number of active customers increased by 15%, reaching about 3.3 million, and the number of customers having their salary accounts at BT increased by 64%, to 1.8 million, also following the bank's merger with Bancpost.
“For BT, 2019 was a good year, we grew sustainable and we delivered sound financials. As a market leader, we have clear responsibilities towards Romania and we know that our role is essential in lending to the Romanian economy and funding Romanians’ ambitions. We try to do more than banking, to inspire and motivate people - colleagues, customers or business partners - attentive with their concerns. During 2020, we will continue investments in innovation to enhance the quality of our services to clients. We will continue to grow the role of our business in the economy, we pay attention to market challenges and opportunities,” said Horia Ciorcila, Chairman of the Board of Directors, Banca Transilvania.
Assets go up 18% backed by higher deposits
The bank’s total assets increased by 18% in 2019, reaching RON 87.4 bln (EUR 18.3 bln) at the end of the year. The net loan portfolio advanced by 6.2%, to RON 38.6 bln (EUR 8.1 bln), while the deposits from clients increased by almost 19%, to RON 74.3 bln (EUR 15.5 bln).
The operating income increased by 12% in 2019 versus 2018, to RON 4.03 bln (EUR 850 mln), while the operating expenses went up by only 6%, to RON 1.9 bln (EUR 400 mln). The net risk provisions also went up by 6%. The profit before tax thus increased by 14.9% year-on-year, to almost RON 1.9 bln (EUR 400 mln). However, the bank paid 37% lower income tax compared to 2018, resulting in a 33% increase in net profit.
At group level, the net profit increased by 47%, to RON 1.85 bln (EUR 390 mln).
(Photo source: the company)