Banca Transilvania Nine-Month Net Income Rises 30% on Loans

Banca Transilvania SA (TLV), Romania’s second-biggest publicly traded bank, said its profit rose 30 percent in the first nine months as increased lending boosted its total assets.

Net income jumped to 265.4 million lei ($75 million) from 204.5 million lei in the same period a year earlier, the Cluj- Napoca, Romania-based bank said in a regulatory filing today. Operating profit rose 14 percent to 540.6 million lei on rising revenue from financial operations and fees.

“These results confirm our expectations and the ongoing positive trend, despite some adverse market events,” Chairman Horia Ciorcila said in the statement. “We’re optimistic about our abilities to fulfill our annual targets, even though we remain cautious and mindful of the extremely difficult local and international economic environment.”

Banca Transilvania, one of the six Romanian banks controlled by domestic investors, is increasing lending to gain market share in the eastern European country mainly from Greek and Austrian lenders. The banking industry is struggling to reverse a rise in non-performing loans that will probably trigger losses for the third consecutive year.

Romania’s banking industry is dominated by Austrian banks, which control 38 percent of the market, followed by Romanian lenders with a market share of 18.3 percent, the country’s central bank said in its financial stability report published on Sept. 18.

Greeks, Austrians

The market share of Greek banks declined to 12.9 percent from 16.3 percent, according to the stability report. Banca Comerciala Romana SA, owned by Erste Group Bank AG, is the country’s largest bank by assets. BRD-Groupe Societe Generale SA (BRD) ranks second.

Banca Transilvania’s net assets grew 12 percent to 29 billion lei from 25.8 billion lei at the end of 2011, the lender said. Non-performing loans amounted to 10.9 percent of the bank’s total loan portfolio, according to the statement.

Net bad-loan provisions rose to 277.6 million lei in the first nine months of the year, compared with 195 million lei a year ago, the bank said.

Banca Transilvania will see a charge of 23 million lei in the fourth quarter stemming from higher bad-loan costs following an audit ordered by the central bank across the entire sector, according to the statement.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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