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BANCA TRANSILVANIA

Q2 2017 financial results

August 10th 2017

Disclaimer

The information contained in the present document has not been independently verified and norepresentation or warranty expressed or implied is made as to, and no reliance should be placedon the fairness, accuracy, completeness or correctness of this information or opinions containedherein.

Banca Transilvania cautions readers that no forward-looking statement that may be contained inthe present document is a guarantee of future performance and that actual results could differmaterially from those contained in the forward-looking statements. Forward-looking statementsspeak only as of the date they are made, and Banca Transilvania undertakes no obligation toupdate publicly any of them in light of new information or future events.

None of Banca Transilvania or any of its affiliates, advisors or representatives shall have anyliability for any loss howsoever arising from any use of this document or its content or otherwisearising in connection with this document.

The present document does not constitute a public offer under any applicable legislation or anoffer to sell or solicitation of any offer to buy any securities or financial instruments or any adviceor recommendation with respect to such securities or other financial instruments.

Banking Sector Dynamics

H1 2017 Highlights

Performance in H1 2017

Overview of Business Lines

BT Financial Group

Financial Statements

1

2

3

4

5

a

Agenda

2

353 352 351

364361

363

360

377

370

380378

394 394

-1.0%-0.7% -0.6%

0.5%

2.4%

3.1%

2.3%

3.6%

2.5%

4.6%

5.1%

4.4%

6.4%

320

330

340

350

360

370

380

390

-3%

-1%

1%

3%

5%

7%

9%

11%

1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17

total bank net assets source: NBR

20.2%

16.2%15.7%

13.5% 13.5%

11.3%

10.0% 9.6% 9.4%

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

NPL ratio, % source: NBR

Bank assets increasing at an accelerating pace

Overall loan quality continues to improve

Banking sector dynamics H! 2017 highlights Performance in H1 2017 Overview of business lines BT Financial Group

net assets%YoY

net assetsin RONbn

Bank assets drawing near the RON 400bn benchmark

3

-3.9

%

-4.5

%

-3.3

%

-3.4

%

-0.1

%

0.6

%

3.0

%

2.8

%

1.16

%

1.17

%

1.2

4%

3.1

%

4.2

%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

2Q14 4Q14 2Q15 4Q15 2Q16 4Q16 2Q17

loans non-government , %YoY source: NBR

102

108110

114

119122

126

130

137

113

107 107

102

99

95 94 9390

6000%

7000%

8000%

9000%

10000%

11000%

12000%

13000%

14000%

2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

loans non-government , RONbn source: NBR

RO

N l

oa

ns

FC

Y l

oa

ns

Credit activity picking up as corporate loans dynamic turns positive for the first time since 2013

Loans in LCY continue to expand, now amounting to over 60% of total loans

Housing loans – remain the key driver of credit activityCorporate loans – move to a positive YoY dynamic

Banking sector dynamics H! 2017 highlights Performance in H1 2017 Overview of business lines BT Financial Group

4

Pro-cyclical fiscal and income policies, delays in terms of structural reforms

Deterioration of the macroeconomic equilibria

-20

-15

-10

-5

0

5

10

15

20

2Q

10

4Q

10

2Q

11

4Q

11

2Q

12

4Q

12

2Q

13

4Q

13

2Q

14

4Q

14

2Q

15

4Q

15

2Q

16

4Q

16

Private consumption

Fixed investments

GDP

GDP, private consumption and fixedinvestments (%, YoY) source: Statistics Office (NIS)

-16

-14

-12

-10

-8

-6

-4

-2

0

-8

-6

-4

-2

0

2

4

6

8

10

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

GDP (%, YoY)

Budget deficit (% GDP)

Current account deficit (% GDP)

GDP and the twin deficits source: IMF, NBR, BT forecasts

The real economy unsustainable quantitative growth, lower quality

Banking sector dynamics H1 2017 highlights Performance in H1 2017 Overview of business lines BT Financial Group

5

Inflation back to the levels seen before the New Fiscal Act

EUR/RON (monthly average) at record high level in June

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Ja

n-1

3

Ap

r-13

Ju

l-13

Oct

-13

Ja

n-1

4

Ap

r-14

Ju

l-14

Oct

-14

Ja

n-1

5

Ap

r-15

Ju

l-15

Oct

-15

Ja

n-1

6

Ap

r-16

Ju

l-16

Oct

-16

Ja

n-1

7

Ap

r-17

Ju

l-17

CPI (YoY) source: Statistics Office (NIS)

Impact of the New Fiscal Act

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.6

Ja

n-0

5

Ja

n-0

6

Ja

n-0

7

Ja

n-0

8

Ja

n-0

9

Ja

n-1

0

Ja

n-1

1

Ja

n-1

2

Ja

n-1

3

Ja

n-1

4

Ja

n-1

5

Ja

n-1

6

Ja

n-1

7

EUR/RON (monthly avg.) source: NBR

The financial economyaccelerating inflation and political tensions leading to higher financial stability risk perception

Banking sector dynamics Q2 2017 highlights Performance in H1 2017 Overview of business lines BT Financial Group

6

Banca Transilvania’s

business development and

financial performance in H1 2017


7

pr

ofi

tab

ilit

y

H1 2017 H1 2016 ∆

Operating income RONmn 1,262.7 1,415.2 -10.8%

Operating expenses RONmn (622.7) (551.7) 12.9%

Gross profit before provisions RONmn 640.0 863.5 -25.9%

Net income RONmn 496.1 458.3 8.2%

Cost of risk, net (%) 0.37% 2.30% -83.7%

NIM 3.22% 3.40% -0.2 pp

NIM* 3.11% 3.12% 0.0 pp

ROE 16.64% 16.49% 0.1 pp

Cost-to-income ratio 49.32% 38.98% 10.3 pp

cr

ed

it

ac

tiv

ity

Jun-17 Dec-16 ∆

Gross loans to customers RONmn 30,736.7 29,379.7 4.6%

Deposits from customers RONmn 43,530.5 41,851.8 4.0%

Gross loans-to-deposits ratio 70.61% 70.20% 0.4 pp

NPL ratio 4.09% 4.62% -0.5 pp

ca

pit

al Jun-17 Dec-16 ∆

Total equity RONmn 6,382.4 5,984.1 6.7%

Tier 1 capital ratio (profit included) 18.91% 17.14% 10.3%

Total capital ratio (profit included) 19.95% 18.30% 9.0%

*without one-off adjustments (PPA adjustments : incurred loss and expected loss)

H1 2017 highlights


8

Total assets at RON 53.2 bn Enhanced ALM for higher efficiency

Capital adequacy ratio at 19.95%

Strong capital base, supporting organic and non organic growth

Net fees and commissions at RON 273.9 mn +12.7% Y/Y

Driven by increased number of operations and additional cross-sell

CoR, net CoR at 0.37%, including releases and recoveries

Net profit at RON 496.1 mn

Net profit positively influenced by increase in interest income, fees and commissions and decrease in provisions

Cost/income at 49.32%Cost to income at a comfortable level, with some expenses booked in advance for the whole year


Business performance H1 2017at a glance

9

858

243

81

552

274

103

623

27.4%

+12.9%

+12.7%

+3.3%

Operating expensesNet fee and commission income

Net trading incomeNet interest income

VBRO loans adjustments

127

97

731

789


Trends in income structure

10

H1 2017

H1 2016

Loans to households, RONbn

8.1 8.1

6.9 7.6

Jun’17

15.8

0.115.1

Dec’16

0.0

Other ConsumptionHousing

11.1 11.0

3.2 4.0

14.3

Dec’16

15.0

Jun’17

Large corporatesSMEs

26%74%

RON FX

20%80%

RON FX

*SMEs identified according to internal classification rules

Loans to companies, RONbn


Loan structure

11

18.4 18.5

7.9 9.6

Dec’16

26.4

Jun’17

28.0

DepositsCurrent accounts

10.1 9.3

5.4 6.2

Jun’17

15.5

Dec’16

15.5

Large corporatesSMEs

43%57%

RON FX

28%72%

RON FX

Deposit structure

Deposits from households, RONbn Deposits from companies, RONbn


12

*SMEs identified according to internal classification rules

*For Financial Statements purposes the gross loans are netted by the unwinding adjustment; For coverage ratio purposes the respective adjustment is included in the total stock of provisions

NPL coverage with mortgage collaterals NPL coverage with provisions

43%

2016

77%

120%

74%

46%

43%

127%

117%

2013

81%

40%

2014

79%

119%

2015 H1 2017

122%

33%45%

108%

77%

2012

75%

NPL ratio at 4.09%Banca Transilvania continued to provide a sound coverage ratio for its PAR 90 portfolio


13

34,000 non-card retail loans disbursed in

H1 2017

Market share for retail loans at December

2016 -14.25%

Internet banking users: over 900,000

Mobile banking users: over 300,000

Nearly 3 mn active cards, of which more

than 330,000 credit cards; BT is the market

leader, both in terms of number of cards, as

well as volume of transactions generated by

its cards, with a market share of about 20%

6.36.8

7.5

10.3

15.115.8

3.3

13.6

20162015 H1 2017201420132012

Loans transferred from VBRO

Retail loans


Retail bankingretail loan portfolio reached RON 15.77bn as of Jun’17

14

2.5 2.52.6

2.8

3.2

4.0

0.3

2014

3.1

2015 H1 201720162012 2013

SME loans

Loans transferred form VBRO

SME bankingSME loan portfolio at RON 4bn and 229,100 active clients


Banca Transilvania continued its specific

focus on the SME business sector, offering

almost 7,900 new loans in H1 2017

BT launched a new platform to support the

small and micro companies

BT continued its partnership with DFIs,

offering special loan and guarantee

products to its SME clients

Agriculture, Healthcare and European

Structural Funds are on BT radar as

specialized sectorial approaches

15

The reorganizational process was

concluded, including client new

segmentation & deeper sectorial

specialization

BT was present with lending facilities

especially in the industrial manufacturing

and agribusiness segments

BT continued to play an important role as

co-lender of EU structural funds eligible

projects

8.7

9.9 10.0

10.1

11.1 11.0

0.9

2013

11.0

20142012 20162015 H1 2017

Corporate bankingcorporate loan portfolio above RON 11bn


16

Corporate loans

Loans transferred form VBRO

Total assets: RON 83 mn Total assets: RON 145 mn

AuM: RON 3,772 mn Total assets: RON 661 mn

Total assets: RON 170 mn

*Total assets for subsidiaries are presented under RAS rules


Banca Transilvania Financial Groupas of 30.06.2017*

Total assets: RON 53.2 bn

17

Total assets: RON 106 mn


pr

ofi

tab

ilit

y

H1 2017 H1 2016 ∆

Operating income RONmn 1,350.8 1,479.0 -8.7%

Operating expenses RONmn (686.1) (596.0) 15.1%

Gross profit before provisions RONmn 664.7 883.0 -24.7%

Net income RONmn 512.7 481.1 6.6%

EPS RON 0.1187 0.1316 -9.8%

Cost of risk, net (%) 0.40% 2.24% -82.3%

NIM 3.28% 3.42% -4.1%

NIM* 3.18% 3.15% 1.0%

ROE 16.43% 16.74% -1.9%

Cost-to-income ratio 50.79% 40.30% 26.1%

cr

ed

it

ac

tiv

ity Jun-17 Dec-16 ∆

Gross loans to customers RONmn 30,792.9 29,477.9 4.5%

Deposits from customers RONmn 43,351.7 41,681.5 4.0%

Gross loans-to-deposits ratio 71.03% 70.72% 0.4%

ca

pit

al Jun-17 Dec-16 ∆

Total equity RONmn 6,536.4 6,152.7 6.2%

Tier 1 capital ratio (profit included) 19.13% 17.36% 10.2%

Total capital ratio (profit included) 20.15% 18.50% 8.9%

*without one-off adjustments (PPA adjustments : incurred loss and expected loss)

H1 2017 highlights – consolidated figures

18

IFRS individual, RONmn H1 2017 H1 2016 ∆

Net interest income 886.3 857.7 3.3%

Net fee and commission income 273.9 242.9 12.7%

Net trading income 102.8 80.7 27.4%

Other net income (0.2) 233.9 -100.1%

Operating income 1,262.7 1,415.2 -10.8%

Personnel expenses (338.2) (304.8) 10.9%

D&A (41.2) (35.7) 15.6%

Other operating expenses (243.3) (211.2) 15.2%

Operating expenses (622.7) (551.7) 12.9%

Cost of risk (57.5) (325.2) -82.3%

Net income before taxation 582.5 538.3 8.2%

Income tax expense (86.4) (80.0) 8.0%

Net income after taxation 496.1 458.3 8.2%

annex Iincome statement H1 2017 – individual figures


19

annex IIbalance sheet June 2017 – individual figures

IFRS individual, RONmn Jun 2017 Dec 2016 ∆

Cash & cash equivalents 4,546.0 5,293.6 -14.1%

Placements with banks 3,723.9 2,524.9 47.5%

Loans to customers, net 28,741.7 27,210.0 5.6%

T-bills & securities 15,024.3 15,402.1 -2.5%

Fixed assets 501.3 448.7 11.7%

Participations 136.7 136.7 0.0%

Current tax assets 53.2 125.1 -57.5%

Deferred tax assets 262.1 373.9 -29.9%

Other financial assets 159.6 170.2 -6.2%

Other assets 88.0 84.5 4.1%

Total assets 53,236.8 51,769.6 2.8%

Deposits from banks 181.0 247.3 -26.8%

Deposits from customers 43,530.5 41,851.8 4.0%

Loans from banks and FIs 1,425.1 2,246.5 -36.6%

Subordinated loan 412.5 424.1 -2.7%

Provisions for other risks and charges 504.4 507.0 -0.5%

Other financial liabilities 735.6 441.2 66.7%

Other liabilities 65.4 67.8 -3.5%

Total liabilities 46,854.5 45,785.5 2.3%

Shareholders’ equity 6,382.4 5,984.1 6.7%


20

IFRS consolidated, RONmn H1 2017 H1 2016 ∆

Net interest income 923.0 881.8 4.7%

Net fee and commission income 295.0 258.5 14.1%

Net trading income 120.3 79.7 50.9%

Other net income 12.5 258.9 -95.2%

Operating income 1,350.8 1,479.0 -8.7%

Personnel expenses (359.6) (318.1) 13.1%

D&A (57.0) (45.2) 26.2%

Other operating expenses (269.5) (232.7) 15.8%

Operating expenses (686.1) (596.0) 15.1%

Cost of risk (59.3) (317.9) -81.3%

Bargaining gain 0.0 0.0

Net income before taxation 605.3 565.1 7.1%

Income tax expense (92.6) (84.0) 10.2%

Net income after taxation 512.7 481.1 6.6%

annex IIIincome statement H1 2017 – consolidated figures


21

IFRS consolidated, RONmn Jun 2017 Dec 2016 ∆

Cash & cash equivalents 4,546.1 5,293.7 -14.1%

Placements with banks 3,784.5 2,563.8 47.6%

Loans to customers, net 28,723.4 27,234.0 5.5%

T-bills & securities 15,005.6 15,399.7 -2.6%

Fixed assets 728.1 645.3 12.8%

Current tax assets 51.2 119.1 -57.0%

Deferred tax assets 268.7 378.7 -29.0%

Other financial assets 161.6 194.2 -16.8%

Other assets 128.6 115.7 11.2%

Total assets 53,397.6 51,944.2 2.8%

Deposits from banks 181.0 247.3 -26.8%

Deposits from customers 43,351.7 41,681.5 4.0%

Loans from banks and FIs 1,469.4 2,304.9 -36.2%

Subordinated loan 412.5 424.1 -2.7%

Provisions for other risks and charges 511.1 514.6 -0.7%

Other financial liabilities 768.7 470.0 63.6%

Other liabilities 166.9 149.2 11.8%

Total liabilities 46,861.2 45,791.5 2.3%

Shareholders’ equity 6,536.4 6,152.7 6.2%

annex IVbalance sheet June 2017 – consolidated figures


22

Banca Transilvania HQ8, G. Baritiu Street, Cluj-Napoca 400027, Romania

+ 40 264 407 150+ 40 264 407 179 /FAX

[email protected]

www.bancatransilvania.ro/en/investor-relationswww.bancatransilvania.rowww.bt24.ro

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Font scris: Georgia - bancatransilvania.ro · Disclaimer The information contained in the present document has not been independently verified and no representation or warranty expressed