Banca Transilvania’s net profit soared 32% in 2008

The bank’s assets are expected to have amounted to the maximum threshold of €4.71 billion by the end of 2008, considering that the bank established higher provisions in last year’s final quarter.

The company, one of the top ten players in the banking system in terms of assets, registered €109 mln in earnings in the first three quarters of 2008, triple year-on-year. The additional profit came from the €62 mln sale of its 25 percent stake in the Asiban insurance company.

The lender’s preliminary results are to be published on Thursday, 29 January.

“Like other banks, we have also felt the slowdown of the economy in last year’s final quarter, and have adopted a more cautious attitude,” Horia Ciorcila, the lender’s President, told Business Standard, said that he is satisfied with the bank’s results. Adrian Danciu, Broker Cluj analyst, foresees a €119.5 mln net income, which could be influenced by the reevaluation of foreign currency loans and deposits, or by a rise in set provisions.

Banca Transilvania, one of the lenders which does not enjoy the financial power of a majority shareholder, can rely on the support of the World Bank (WB), and that of the European Bank for Reconstruction and Development (EBRD), which owns almost 15 percent of the bank’s shares. In 2008 alone, BT attracted loans worth several hundred million euro from the two financial institutions. “We are enjoying the massive support of ERBD and WB. We will approve a new dividend granting policy in the next one and a half months, and will decide on possible capital increases,” said the bank’s official. Bankers are adopting a cautious attitude in 2009, based on cutting costs and selling companies which are not included in the core business. Ciorcila recently told Business Standard that he intends to sell the share packages the bank owns in non-core companies this year. Banca Transilvania owns a 50 percent share in Compania de Factoring, a major player on the factoring market, and a 57.39 percent stake in Medicredit Leasing IFN, leader on the medical equipment leasing market.

Banca Transilvania sold the BT Asigurari insurance company to Groupama in 2007, and its Asiban insurer stake to the same French buyer in 2008. Now, the first deal on the lender’s list is its BT Aegon company, which operates on the private pension segment. The lender plans to sell the 50 percent BT Aegon share package to Dutch Aegon insurer for €11 mln.

On the other hand, Romania’s national currency hit an all-time low against the euro on 20 January 2009, at a RON 4.3025/€1 exchange rate, and is nearing a threshold that could cancel lender profits. Since the first of January alone, the leu has lost 7 percent to the European currency.