BT preliminary financial results as at 31 December 2018

Banca Transilvania, the largest financier of the economy in 2018: customer support, in parallel with bancpost integration

● 196,000 loans for companies and individuals were granted in 2018 ●

●Over 9 billion lei were granted through loans to companies in Romania●

Banca Transilvania – a bank born and raised in Romania – reached its 25th year of activity to be the main financier of the Romanian economy, using the competences and capital accumulated over time to support the entire private environment in Romania.

For BT, 2018 meant the continuation of responsible organic growth, massive investments in the digital customer experience, the integration of Bancpost and the start of the implementation of its business model at Victoriabank, in the Republic of Moldova.

"Banca Transilvania continued to be the most active player in the banking sector, holdingthe Romanian economy with its capital and due to the competences accumulated in the 25 years of existence, here in our country. During these years we have increased the capital base of the bank by capitalizing the annual profit, coming up with capital increases with money from shareholders, taking subordinated loans so that we always keep a fast pace of lending to all categories of clients – from SMEs, start-ups, to the population. Being the largest financial group in Romania, we are aware of the responsibility we have towards the Romanian economy, towards the over 3 million clients, of which 700,000 are credited clients, to the over 31,000 Romanian shareholders, individuals, investors on BVB and to the over 7 million indirect shareholders through pillar II of pensions"– said Horia Ciorcila, Chairman of the Board of Directors BT.

The assets of Banca Transilvania Financial Group reached 77.9 billion lei at the end of last year, and the loans increased to 38.02 billion lei. The consolidated net profit of the BT Group is of RON 1,257.17 million, of which the bank's profit is RON 1,219.39 million, a result which also includes the significant integration expenses of Bancpost. The bank's operating profit increased to 1,801.41 million lei due to the efficiency and consolidation of the business. Customer deposits reached 65.16 billion lei, of which 43.34 billion lei are deposits of individual customers, and 21.82 billion lei are deposits of legal entities.

In addition to the merger between Banca Transilvania and Bancpost, in 2018 we took place the merger between BT Leasing and ERB Leasing, a company acquired from Eurobank Group together with Bancpost and ERB Retail Services. BT Direct and ERB Retail Services, non-banking institutions dedicated to granting consumer loans, will merge in the first part of this year.

In terms of operational efficiency, it is kept comfortably at Banca Transilvania, being 49.9%.

The BT Board of Directors decided in yesterday's meeting, on February 26th, to propose to the General Meeting of Shareholders in April this year to distribute from the profit of 2018 cash dividends in the amount of 818,121,781 lei (gross), representing a gross dividend of 0.17 lei / share. Also, the AGA will be proposed to capitalize on the difference up to the total profit of 2018, which will be available for distribution.

Supporting entrepreneurs, population and community in 2018:

• ≈65,000 fixed interest loans were granted last year by the bank to individuals;
• 3.7 million cards have BT in its portfolio, which means 21% market share regarding the cards issued in Romania;
• 15.5 billion lei is the portfolio of SME loans (SMEs, according to the European definition);
• 11 billion lei is the balance of mortgage loans / real estate;
• 125 BT offices across the country were upgraded during 2018.
• 23 million lei invested in communities, education and sports in over 1,000 projects of involvement and social responsibility, last year.

Massive investments in digitalization generate visible effects in business:

• Nearly 200 million transactions were made last year with BT cards. Every second there are 6 BT card transactions;
• 475,000 credit cards are in the portfolio of BT Financial Group, which generates approximately 35% of the transactions made with credit cards at merchants in Romania. Over 60,000 transactions take place every day with BT credit cards;
• 50,000 POS are managed by Banca Transilvania, which represents 25% of the terminals installed in Romania;
• 2 million operations took place, on average, daily through BT last year;
• The number of BT24 Internet Banking users exceeded 1 million, +14% compared to the same period of last year, and the mobile banking is 560,000, +34%;
• The volume of transactions through Internet Banking is +20%, and through Mobile Banking +54% compared to the same period of last year;
• BT Pay, the first wallet application in Romania, launched in January 2018, now has 12 functionalities developed within 10 months – and as many options for non-stop management of money and cards: contactless payments, money transfer, category tracking of purchases made with the card, permanent or temporary blocking of cards, etc. Nthe shoulder of phone payments at merchants and money transfers between users of the application increased by 35% in the fourth quarter of 2018, compared to the third quarter, and transaction volumes increased by 50%;
• The complementary banking solutions, offered through the BT Store online platform, have been accessed, on average, by 100 entrepreneurs/ month, since its launch in August 2018;
• At the end of the year, BT had nearly 350 BT Express Plus multipurpose ATMs, which allow for self-banking operations such as cash deposits or round-the-clock currency exchange. The number of deposits doubled in December 2018, compared to January of the same year, reaching approximately 400,000.

Other financial information & Fitch rating:

• The non-performing exposures ratio, according to eba indicator, is 4.97% at 31 December 2018;
• The coverage rate with total provisions of non-performing exposures according to EBA standards is 94%. If the guarantees are also considered, the coverage rate is 133%;
• The bank's solvency without the profit of 2018 is 18.59%, and if we include the profit, it is 21.53%;
• In January this year, Fitch Ratings confirmed Banca Transilvania's (IDR) long-term rating at 'BB+', with a stable outlook, namely the level of viability rating at the level of 'bb+'.

Additional tax on assets

In anticipation of a decision regarding the additional tax on bank assets, Banca Transilvania reiterates the idea that the capital and competences of the banks have been built in time and can be lost quickly in the absence of investments, and Romania needs a strong banking system and superior credit growth rates to reduce the gaps with western countries.

The decrease of the profit available for capitalization will slow down the development of the Romanian banking system and will affect the economic growth. However, BT, the Bank and the Romanian entity, will remain with its clients, so that they are less affected by the eventual tax.

BT, +50 places in the Brand Finance Banking 500 ranking

BT climbed 50 places in the Brand Finance Banking 500 2019 ranking, published by The Banker, with a 39% increase in brand value of up to $ 242 million, respectively in the rating from A+ to AA, compared to 2018. Banca Transilvania is the only Romanian banking brand in the top published this year. 

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Preliminary financial results for 2018 are available on BT's website, https://www.bancatransilvania.ro/actionari/rezultate-financiare/, on February 27, starting at 8:30 a.m.