Banca Transilvania opens earnings season

The bank’s after-tax profit fell six times last year, even if operating revenues jumped 27% year-on-year to 1.29 billion lei, according to preliminary results filed to the Bucharest Stock Exchange.

“We have realized the gross profit assumed before our shareholders, in a difficult and challenging economic climate. It was a year of development for Banca Transilvania as a company, both in terms of challenges and experience we have achieved in the financial-banking industry. Strict provisioning policy, risk management, credit quality, and austere cost management have remained BT's top priority in 2009. We have adapted to the new market conditions, we’ve grasped new opportunities and launched a crisis-proof platform for individuals and businesses”, said Robert Rekkers (photo), chief executive of BT.

The bank’s full-year results were largely weighed down by high loan impairment charges.

In 2009, loan impairment charges soared 225% to 755 million lei, in the context of risk management adjusted to current economic conditions.

Net credit risk cost stood at 533 million lei last year, loan-loss coverage ratio at 6.1%, “a relatively prudent level, as it covered 128% of NPL”.

So far, only Garanti Bank has made public its financial report for 2009, without stating profit or loss: the bank has increased its total assets by 84% in 2009 to €830 million, on 50% YoY increase in loan book. However, the Turkish-based bank said its Romanian subsidiary was still on the red in the trailing year.

Excluding loan impairment charges, Banca Transilvania’s pre-tax profit would have been 610 million lei, twice the size of 2008 profit.

On the other hand, revenues climbed 14% in 2009, to 4.89 billion lei (€1.15 billion), from 4.29 billion lei a year earlier. Total expenses rose 26% to 4.8 billion lei (€1.13 billion), from 3.82 billion lei in 2008.

Total assets increased by 14% to 19.47 billion lei.

“BT’s capital adequacy ratio stood at a comfortable level of 14%, well above the statutory requirement of 8%”, the bank said.

BT’s loan book totaled 12.17 billion lei, of which business loans accounted for 58.44% while retail loans 41.56%.

The bank has a roughly 4% exposure to real estate developers.