Banca Transilvania 2012 Profit Rises 40%, Aims More Growth

Banca Transilvania SA, Romania’s second-biggest publicly traded bank, said its profit rose 40 percent last year on higher lending and proposed to retain profit to finance further growth.

Net income jumped to 320.4 million lei ($98 million) from 228.6 million lei in 2011, the Cluj-Napoca, Romania-based bank said in a regulatory filing today. Operating profit rose 9 percent to 720.2 million lei on rising revenue from financial operations and fees.

“An increase in the number of clients, together with a record number of operations and a good performance in some of our business lines have led to a strong consolidation of our market position,” Chairman Horia Ciorcila said in the statement. “We will propose to our shareholders to agree on the profit capitalization so that the bank can grow further and support the Romanian economy.”

Banca Transilvania, one of the six Romanian banks controlled by domestic investors, boosted lending at a time when the country’s banking system is struggling with rising bad loans. The industry posted the third consecutive year of losses and incurred a total loss of 2.1 billion lei in 2012 as the ratio of non-performing loans soared to 18.2 percent, Ziarul Financiar reported today.

Bad Loans

Banca Transilvania’s net assets grew 15 percent to 29.6 billion lei from 25.8 billion lei at the end of 2011, the lender said. Non-performing loans amounted to 11.3 percent of the bank’s total loan portfolio, according to the statement.

Net bad-loan provisions rose to 379.4 million lei last year, compared with 380.8 million lei a year earlier, the bank said.

“Increasing the bank’s value and its market share remain a priority in 2013,” Ciorcila said.

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, according to the central bank’s data. Banca Comerciala Romana SA, owned by Erste Group Bank AG, is the country’s largest bank by assets. BRD-Groupe Societe Generale SA ranks second.

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