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Romania's Banca Transilvania net profit rises 3% in 2018

Romania's Banca Transilvania net profit rises 3% in 2018 Banca Transilvania

BUCHAREST (Romania), February 27 (SeeNews) – Romania's Banca Transilvania [BSE:TLV] said on Wednesday its net profit rose by 3% year-on-year in 2018, reaching 1.2 billion lei ($291 million/256 million euro).

"Banca Transilvania continued to be the most active player in the banking sector, supporting the Romanian economy, due to continuous capital boosts and to the relevant expertise gathered over its 25 years of existence, here, in our own country." Banca Transilvania's board of directors chairman Horia Ciorcila said in a statement.

"During these years, we managed to constantly grow the bank’s capital base through yearly profit accumulation, cash capital increases from shareholders and subordinated debt instruments, to be able to maintain the alert lending pace across all customer types: from established SMEs to start-ups and population."

The bank's operating income rose 34% to 3.6 billion lei in 2018.

At the end of December the bank's assets totalled 74.1 billion lei, up 25% year-on-year.

Net loans increased 22% to 36.5 billion lei in 2018. During the review period, the bank granted over 196,000 new loans to individuals, SMEs and corporate customers.

Deposits from customers grew 27% to 62.5 billion lei last year.

Non-performing loans formed 4.97% of Banca Transilvania’s total loan portfolio at the end of December, while their coverage with related provisions and mortgage collateral remained at a comfortable level of 94% and in line with the bank’s risk appetite.

Banca Transilvania group, which also comprises BT Asset Management, BT Direct, BT Securities, Factoring company and Medicredit, posted a net profit of 1.26 billion lei in 2018, up 1.2% on the year. Group assets totalled 78 billion lei at the end of December, up 30% on the year.

In comments on the government's decision to introduce an additional tax on bank assets, Banca Transilvania warned that the banks' capital and competencies have been built over time and can be quickly lost without the proper investments.

"The decrease of the available profit for capitalization will slow down the development of the Romanian banking system and will affect the economic growth.  However, as a Romanian bank and company, BT will stand by its customers, so that they will be as less as possible affected by the potential tax on assets," it said.

The government approved an emergency decree introducing the so-called 'greed tax' on banks' assets in December. The tax is to be correlated to the values of the 3-month and 6-month Romanian Interbank Offer Rate (ROBOR).

In October, Banca Transilvania merged with Bancpost, which it had acquired from Greece's Eurobank Group in April 2018.

Banca Transilvania's shares traded 2.98% lower at 1.89 lei on the Bucharest Stock Exchange as at 1047 CET on Wednesday.

(1 euro=4.7617 lei)