Merger between Banca Transilvania and Volksbank Romania finalizes on December 31

The merger between Romania’s third largest lender Banca Transilvania (BT) and Volksbank Romania will become effective on December 31, 2015. The results of this merger will be made public on January 4, but according to Banca Transilvania’s estimates, the results have been “very good” so far. The merger could push Banca Transilvania closer to the second place in the local banks’ ranking, which is now held by BRD Groupe Societe Generale. Banca Transilvania finalized Volksbank Romania’s takeover from Austrian group Volksbank in April this year. Banca Transilvania paid more than EUR 700 million to Volksbank Austria, EUR 81 million of which was the value of Volksbank Romania’s shares, and some EUR 630 million were subordinated loans that Banca Transilvania repaid to Volksbank Austria. As the sole shareholder, BT offered discounts of EUR 332 million to Volksbank Romania customers with bank loans in Swiss francs who agreed to convert their loans in Romanian currency lei. About 34,000 customers benefitted from this offer. “We are happy that Banca Transilvania’s initiative to convert Volksbank Romania’s CHF loans was positively received. The idea generated a trend in the market and was implemented by other banks, which considered, just like Banca Transilvania, that this was their social responsibility,” said Omer Tetik, Banca Transilvania’s CEO. Volksbank Romania has managed to close over 2,500 litigation cases with customers after it became part of Banca Transilvania, most of them related to abusive clauses in their loan contracts. Banca Transilvania is currently the third largest lender in Romania by assets, after BCR and BRD, with a market share of close to 10%. It has over 6,000 employees and a network of 550 banking units. Four local investment funds SIFs own a 16.69% stake in the third largest bank in Romania Banca Transilvania. Their stakes are now bigger than those of the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), a division of the World Bank, which together own 16.45% of the bank. Romanian investor Horia Ciorcila, one of Banca Transilvania’s founder, who is also chairman of the board, holds a 5% stake. Banca Transilvania’s shares have gained about 50% since the beginning of 2015. The bank’s market capitalization is currently over EUR 1.6 billion (as of December 22). Romanian Banca Transilvania sees slightly lower profit Romanian Banca Transilvania makes EUR 94 mln capital increase, wants merger with Volksbank Romania’s Central Bank approves Banca Transilvania–Volksbank merger