EBRD adds 5.4m euros to Transilvania capital

EBRD, the main shareholder of Banca Transilvania, will invest another 5.4 million euros in new shares to maintain its 15% interest in the Romanian institution.

The bank has scheduled a capital increase in June, from which it is expected to raise 35.5 million euros from shareholders. During this operation, the European institution will acquire 53,264,925 new shares in Banca Transilvania (BT), for which it will pay a price of 0.35 RON/share.

Ionut Patrahau, deputy general manager of BT, says he expects all shareholders to subscribe the shares almost entirely, as has happened in the previous years.

“The money will go to investments, as well as capital, in order to sustain growth because we need funds to keep up our solvency indicators,” said Patrahau. He says it is too early to talk about the possibility of other capital increases and expects the current operation to be finalised in August-September. “The capital increase will further support the growth of BT within the Romanian banking system. BT strategy will continue to target a stronger position on the market through the development of a financial group that will also include, leasing services, asset management, brokerage, consumer finance and insurance, as well as financial services” according to the EBRD project.

Banca Transilvania has recently revised its interest policy, cutting a quarter of a percentage point off the interests it pays for customers” RON deposits. Following these adjustments, interests paid by the bank range between 7.25% and 7.5% per annum, depending on maturity. The bank”s move is the first of this type to be made by players in the system since the beginning of the year, in the context where interests paid to customers have increased amid the NBR”s tighter monetary policy. The central bank has maintained the benchmark rate at 8.5% per annum since February.

Notwithstanding this reduction, interest rates BT pays are still in the upper segment of the market, with the bank being aggressive in attracting resources from customers.

In the first quarter of this year BT posted gross income worth 8.4 million euros, up 35% from the same period of last year. Assets went up by 11.4%, reaching 1.5 billion euros. This year the bank has budgeted gross income worth approximately 38 million euros (132 million RON), 25% higher than last year”s. Investments scheduled for 2006 total 30 million euros, with the largest portion of budget to be used to develop the territorial network. BT is one of the most dynamic companies in the system from this point of view, planning to open around 100 branches this year, to get to 300. Last year, the bank doubled its network, to 200 branches. This year the bank expects to derive revenues worth 146 million euros, from 107 million euros in 2005.

Banca Transilvania

* Plans a increase raise in June, designed to bring in 35.5m euros from shareholders

* EBRD, the bank”s principal shareholder, will invest another 5.4m euros in new shares during the capital increase

* The new money will sustain BT”s development in the Romanian banking system

* Posted gross income worth 8.4m euros in Q1 this year, up 35% from last year

n Has earmarked 30m euros for investments this year.