Banca Transilvania posts 35% y/y drop in 9-mo net profit

Romania’s Banca Transilvania [BSE:TLV] said on Friday its net profit fell by 34.9% year-on-year in the first nine months of 2020 – to 901.5 million lei ($219 million/185 million euro), according to

Despite a highly volatile economic environment, Banca Transilvania reported a robust balance sheet and a sound financial performance, above expectations, at the end of the third quarter, as both income and operating expenses remain at a comfortable level, the bank said in an unaudited nine-month financial report filed with the Bucharest Stock Exchange, BVB.

“Although trends are less than favorable due to the pandemic, we remain optimistic and confident in the forthcoming recovery of the economy. We aim at increasing the lending granted by BT, in the most responsible and efficient way, supporting the economy and the bank’s growth,” Banca Transilvania CEO Ömer Tetik said.

“The current context, which has undoubtedly affected the whole world and possibly some developed economies to a larger extent, also brings new opportunities for Romania, an important advantage for us because nobody knows the market better as a Romanian bank.”

The bank’s operating income fell to 2.88 billion lei in the first nine months of 2020, compared with 2.92 billion lei in the like period of 2019. At the end of September, Banca Transilvania’s assets totalled 96.11 billion lei, up from 87.43 billion lei at end-2019.

Net loans increased to 40.08 billion lei at end-September, compared to 38.6 billion lei at end-2019. The bank had over 2.9 million retail customers, 329,000 small and medium-sized enterprises and micro clients as well as over 10,400 corporate customers as at end-September.

Deposits from customers reached 81.26 billion lei in the first nine months of 2020, compared to 74.35 billion lei at the end of last year.

Non-performing loans accounted for 3.59% of Banca Transilvania’s total loan portfolio at end-September, while their coverage with related provisions and mortgage collaterals reached 124%, reflecting changes into the provisioning methodology in line with the recommendations of Romania’s central bank and of the European Banking Authority.

Considering the effect of the healthcare and economic crisis, the cost of risk during the first nine months of 2020 increased to 1.68%, the bank said. During January-September, the provision balance grew by 16.2% up to 2.944 billion lei compared to end-2019.

Blue-chip Banca Transilvania is the largest Romanian privately-owned bank. Its net profit rose by 33% last year, reaching 1.62 billion lei.

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