Banca Transilvania makes EUR 14 mln profit, expects further increase in provisions

Romanian lender Banca Transilvania posted a gross profit of EUR 14.1 million in the first half of this year, which was more than five times higher than the gross profit posted mid-last year. The net profit in the first half of this year was of EUR 7.8 million, according to the bank. The gross profit in the first half of the year covers 40 percent of what the bank had expected for the entire year. The bank's operational results went up to almost EUR 92 million, which was a 68 percent increase on the first half of last year. Provisions cut the bulk of the bank's profit – EUR 77.8 million of provisions during this period. In the first half of last year, provisions were smaller – around EUR 52 million. "In the first half of this year, the bank's operational profit went up by 68 percent compared to the same period of last year. We have focused on finding the adequate solutions to the clients' requests, such as restructuring loans or offering cheaper loans, launching platforms for those asking for EU funds, but also launching new products,” said Robert Rekkers, general manager of Banca Transilvania. The net cost of loan risk went up by 49 percent during the first six months, reaching around EUR 78 million, out of which a third was represented by non-deductible provisions. “A negative effect on lending in foreign currencies and over the net cost of risk came from the RON depreciation towards EUR, compared to mid-2009, according to the bank. The bank expects unpaid loans to further increase, which will also send up its provisions. Banca Transilvania's assets grew by 3 percent compared to the end of 2009, reaching around EUR 4.7 billion (the equivalent of RON 20 billion). More than half of the bank's loans are in Romanian currency (61.7 percent). The volume of loans in BT's portfolio went up by 8 percent during the first six months of the year. The value at end – June was of around EUR 3 billion (RON 13 billion). Deposits went up by 5 percent, to EUR 3.7 billion (RON 15.7 billion). * the values in EUR were calculated using an exchange rate of RON 4.24/EUR