Horia Ciorcilă: At BT, we have a united top management team, which is something I value very much

Horia Ciorcilă, Chairman of the Board of Directors, Banca Transilvania, gave an interview to Ziarul Financiar in April 2025, Banca Transilvania will continue to grow because there is still room, reprinted in full below:

How was 2024, beyond the financial results, what went well, what went less well, how was the economy and business?

Fundamentally, for BT Group, 2024 was a good year. Beyond the financial results, we were able to consolidate our leading position in banking and strengthen the financial group structure. We have a size that favors us in many ways, while at the same time our permanent focus is on efficiency. When you grow a bank it is like growing a child, you need to adapt because each stage means a new dimension. The bank is young, but mature at the same time, with lessons learned, experience and above all a lot of courage for the next steps.

A very great quality of the bank is the very strong, loyal, experienced team. Similarly, we have a close-knit top management team, which is something I value very much.

As for Romania's economy, it has grown significantly in recent years and has reached the most favorable position in our history. However, against the backdrop of the pandemic, the context in Europe and the geopolitical context, some deficits have accumulated, which are now becoming due and must be tackled through pragmatic, punctual solutions. I refer in particular to the budget deficit, for which we have a context, we have circumstances. Of course, the trade deficit also has structural causes. We consume more because we tend to have the same standard of living as in the West, but production in Romania has not kept pace, which can only be solved with massive investments from domestic sources, including banks, but also from European funds. 2024 was a year in which certain peaks were reached in this regard, and now the approach is becoming urgent.

What are the markets, the areas where BT has gained or lost ground?

BT has greatly strengthened its position in the market including in 2024, as have the other BT Group companies, which have grown both organically and through business acquisitions. We support all of Romania's strategic sectors, such as energy, healthcare, agriculture, road infrastructure, trade, manufacturing, services and transportation, to help make Romania more competitive, support a resilient economy and narrow the gap with the West. In terms of business, we see very good results on the large company side, which for our bank means clients with a turnover of over EUR 50 million, where we are growing at an accelerated pace and we are the main financier of the entire corporate ecosystem in Romania.

Where we have grown and where we will have speed in 2025 is the premium customer segment, where we now have about 150,000, which is about 4% of our individual customers. The wealth and prosperity of Romanians has increased in recent years, that's why this niche is much more consistent, we're talking about people who work in big companies, entrepreneurs, specialists, doctors or architects, for example, who have above average incomes. For them we have launched products in 2024 and we are gaining market share at an accelerated pace.

On the other hand, Bucharest, as the market with the highest potential in Romania, is a place where we are growing, in terms of overall business. We need to continue the trend in order to get as close as possible to the similar market share and magnetism that we have at national level.

How is BT doing in the corporate area, what was the target for 2024?

Large corporates are one of BT's best performing business areas in 2024. We finance entrepreneurial businesses to multinationals, which for us means supporting key areas, trade flows and the Romanian economy. It is the large Romanian and international companies that have the greatest power to change Romania because they have the capital for major investments in technology, infrastructure and growth.

Last year compared to 2023, the target in this customer niche was significantly exceeded. On the lending side, we have a 23% growth. We now have a very good and balanced position across all our business segments, from retail, to SME, to large corporates. There are areas where we still have room to grow, but we have a good position in all the main segments and we have big plans for each one.
What is your, BT's, message to shareholders?

I thank the shareholders for their confidence in the bank, in our plans and in our top management. We are doing everything in our power to deliver positive results so that shareholders can benefit from the growth of the bank and the Banca Transilvania Group.

Just a few days ago we had BT's general shareholders' meeting, where the shareholders decided on a very balanced distribution of the bank's profits. About 55% of the profit goes into reserves and capitalization of BT and 45% is distributed to the shareholders. By the nature of banking, and given the strict regulatory side, we need a lot of capital to finance lending and population growth to support the economy. Therefore, a large part of our profit is capitalized and therefore allows us to increase the amounts financed and grow the business.

What does the shareholder structure look like? Does BT want more diversification, a wider range of investors?

BT's shareholder structure is a source of pride for me, as a percentage of Romanian capital and because of the growing number of shareholders. Almost 80% of the capital is Romanian. Romanian pension funds hold about 26% of Banca Transilvania, which means an additional 8 million indirect shareholders, participants in those funds. Over 67,000 shareholders - individuals and investment funds from all over the world - invest in TLV shares. To give you an idea of the bank's magnetism, last year more than 15,000 new shareholders joined us, double the number in 2023.

Funds from investment banks from all over the world are constantly contacting us or asking for information about BT's plans and evolution, seeing in Banca Transilvania an investment opportunity, which makes me very happy. When we have placed bonds in the market, a significant number of international funds have placed substantial amounts. Through new categories of shareholders interested in the bank's shares and bonds, through positive results, we are increasing this virtuous circle of growth: we are increasing capital, which we then use to finance Romania, the State and the population.

What are the economic sectors where BT is or will allocate more money?

Through the large companies, through which we provide the largest amounts of funding, in 2024 and in the first months of this year we supported Romania's main strategic sectors - health, agriculture, energy efficiency, renewable energy production. For this year, we are considering two strategic directions on the companies side. The first is syndications, where the bank has contributed its expertise to a large number of transactions, and the second is supply chain finance, for which Banca Transilvania offers solutions that benefit the SME segment.

Basically, we support entrepreneurs in adapting to market volatility, growing their businesses and adapting their operational models to better integrate into the European entrepreneurial ecosystem. In parallel, we are investing in all segments, precisely because we are expanding and aiming for growth. We are also investing in retail, where we have a very good position, in SMEs, where we have absolute leadership, as well as in the large companies area, where we have great growth potential. And these investments go together and influence each other through synergies. When we finance a large customer, we support the whole ecosystem around them, from SME partners to employees. And so, in many cases, we start doing business or financing the whole ecosystem.

What did BT gain after finalizing the acquisition of OTP Bank Romania, i.e., what is left - business, customers, market share?

The acquisition of OTP Bank Romania was a very good idea. It has helped strengthen the bank's leading position. BT reached 23% market share and the effective gain from the acquisition was RON 683 million. The move also brought us around 150,000 customers, a 9% increase in assets and a 13 to 15% increase in the loan portfolio, as well as a greater presence in Bucharest and the center of the country. We have a very good customer retention of OTP Bank Romania, over 90%, whether we are talking about companies or retail.

The acquisition was also a good placement for BT's resources and liquidity, given that we had larger deposits than loans, while at OTP Bank Romania it was the other way around. Of course, it was a new opportunity for the team, given the competency to execute fast, successful company integrations in parallel with organic business growth.

Like any project of this kind, it has also meant challenges, especially because of the fast integration, only seven months, but we rushed everything to be in favor, in the interest of OTP Bank Romania's customers, so that the discomfort for them is as small as possible.

How does BT now assess business risk in the economy given the domestic tensions? What risk can the bank take given that it is the largest lender to the economy?

Romania's economy has great growth potential. We are close to the EU average, but there is still room for growth. Let's not forget that we have major differences between the various regions of the country and we need to contribute to flattening them. This requires investment and capital. The gap is explicable - in the West, capital has been accumulated over hundreds of years, while in Romania we somehow started from scratch 35 years ago. But we are optimistic and we are moving forward with courage.

In the long term we see growth, but of course it will not be equal, there will be turbulence and adjustments will be needed. An example of this is that, mathematically and sustainably speaking, we cannot have such a big difference between government expenditure and revenue in the long term.

We are looking very carefully at all the risks, but we are also very well prepared, because we have substantial capital reserves and we have size on our side. Moreover, the last few years have taught us a lot about resilience and the importance of reacting quickly. Deficits need to be adjusted gradually, because any attempt to adjust may produce shocks in the economy, possibly also social reactions. Taxes need to remain at a reasonable level both because they are already high in some areas, because we need to be attractive to attract capital into the country, but also because we have a productivity gap with the West.

What are BT's objectives/plans for moving from a traditional to a more digital bank? 

I think that today we can hardly talk about "classic" banks anymore because banking has been one of the industries that has invested the most in technology, totally transforming the way customers bank. BT is a universal bank, for everyone, whether they prefer phone banking or want to switch to us, with a big digital component. We have one of the largest branch networks in Romania, we are present in around 180 locations through more than 530 units, but we also have champion applications such as BT Pay and BT Go, a state-of-the-art Core Banking system, artificial intelligence integrated into services, chatbots and automated processes. This hybrid model is the best fit given the very large number of customers we have, almost 5 million, which greatly facilitates financial inclusion. Diversification bodes well because it increases our addressability, accessibility and, on the other hand, reduces market risks.

We have made significant investments in technology especially in the last few years and we will continue to do the same. This is clearly where the future lies. Technology is helping us to process millions of transactions every day and to be basically the backbone through which transactions and money flow in Romania. But we don't want to limit ourselves in terms of distribution channels. We want to have - at the same time - the best applications, but also the best network of units in Romania. It's part of our plan to vertically integrate BT, to have full control over the customer relationship because we have applications, we have many branches, we have ATMs, we have cash processing solutions.

What plans BT Group has in the areas of leasing, asset management, insurance brokerage?

BT Asset Management's target is to pass RON 7 billion in assets and 400,000 investment accounts. We are on track now thanks to very good momentum of growth in both assets and customer base. We are pleased that a very large number of investors - more than half of BT AM customers - have set a long-term savings plan based on recurring investments.

As for BT Capital Partners, it started the year from the position it gained last year, as the largest broker on the Bucharest Stock Exchange, so we want to keep this position. It has been two historic years at the BVB, with share listings and bond issues, and ambitions are still high on the profitability side, where we are above our budget targets for the first quarter. The plans are supported by a record increase in the number of customers and a significant contribution from transactions on international markets with an increase of more than 60% compared to last year's average. Leasing has also grown very nicely. This year, we are focused on strengthening our position through three major directions: organic growth, digitalization and expansion of strategic partnerships. On the insurance brokerage side, we recently announced a new CEO, as well as our plan to diversify BT Insurance Broker's business model to transform the company from a niche - by specializing in motor insurance, where we are also a leader - into a universal broker.

What is BT doing with the surplus liquidity, given that deposits attracted are higher than loans?

Banca Transilvania's role and objective is to finance the economy and use capital with high efficiency, so that we pay the best possible interest rates on deposits and offer the cheapest possible loans. This also because for a country or a company the low cost of financing is a competitive advantage. We therefore want to lend to as many businesses and individuals as possible, but because we use capital and depositors' money, we do so as responsibly as possible and are obliged to focus exclusively on bankable customers. All this allows us to pay good interest rates on deposits and also to offer affordable loans. The result can be seen in the significant above-market growth in BT's loan balances. Of course, not all loan applications are bankable, not all firms that come to us for finance fit the rules and regulations. There are other challenges, some specific to our country, such as the fact that we have a large number of small or undercapitalized firms.

We direct surplus liquidity to safe or as safe as possible investments, such as Romanian government securities. Or, the availability we have in foreign currency, from customers, we can invest in bonds or other instruments of Romanian companies or foreign banks. We have a consistent liquidity surplus, which gives us room to maneuver and flexibility when we see opportunities.

What is the next big goal for Banca Transilvania? 

Growth, consolidation, diaspora focus and taking great care of customers. There is still room for growth by a few percentage points for the bank, but also for the consolidation of BT Group companies. Regarding the diaspora, we are looking very carefully at Romanians abroad, and through the applications we have we can offer banking solutions for Romanians abroad. Now, about 14% of BT customers are Romanians living abroad. Italy plays a special role, as we have had a physical presence in Rome for 11 years. For our Romanians there, we recently launched BT Pay Italia, which will accelerate the financial connection of family members in Romania and Italy. We aim to have one in four Romanians living in Italy banking through BT Pay Italia. Beyond targets, if Romania is doing well, Banca Transilvania is doing well.