In H1 2024, Banca Transilvania recorded NII growth of 24% YoY, NFCI increase of 17%, net banking income growth of 14.7%, and a net profit of RON 2.1bn, increasing by 35.7% YoY.
Starting off with the net interest income, it amounted to RON 3.12bn in H1 2024, growing by 23.6% YoY. This was supported by several categories, including larger amounts of cash and cash balances with Central Banks, which increased by 41% YoY to RON 25.2bn, higher loans issued to customers, which increased by 15% YoY, as well as larger amounts of loans issued to other financial institutions, which grew by almost 4x YoY.
Of course, the increase in the net interest income came not only due to the higher volume of loans issued but also due to the higher interest rate on said loans. While Banca Transilvania (BT) does not provide details for its net interest margin, the deposit interest rate at the Romanian Central Bank is currently held at 6.5% (and has been elevated for a while now, but down from 7% in Q1), to combat inflation. As such, it could be expected that most of the loans issued are issued at higher interest rates as well.
One other interesting tidbit provided by Banca Transilvania is the fact it issued RON 11bn financing for corporate clients, while RON 4bn was financed for retail clients. During H1, BT noted 300,000 new customers. Moving on to net fee and commission income, it amounted to RON 696m, growing by 14.7% YoY, supported by the higher number of transactions as well as more digital services usage by the Bank’s clients. This is of course to be expected, as Banca Transilvania is the largest bank in the country.
As a result of these developments, the consolidated net banking income amounted to RON 3.8bn, growing by 21.9% YoY. In terms of OPEX, it grew by 26.6% YoY to RON 2.5bn. This came mainly due to higher personnel expenses, which grew by 19.1% YoY to RON 1.2bn, mainly as a result of higher wages, but also due to higher other op. expenses, which themselves increased across many different categories. As a result of all of the above-mentioned developments, Banca Transilvania recorded a net profit to of RON 2.1bn, growing by 35.7% YoY.
Banca Transilvania key financials (H1 2024 vs. H1 2023, RONm)
Source: Banca Transilvania, InterCapital Research
Taking a quick look at the balance sheet, BT’s total assets grew by 5.2% since the beginning of the year to RON 178bn, mainly as a result of the developments described above, related to the loans issued to individuals and banks, as well as Cash and current balances with Central Banks.
On the other hand, total liabilities also grew by 4.9% YTD to RON 162bn, mainly as a result of higher deposits from customers, which grew by 3.3% YTD to RON 142.7bn. One other category that also recorded an increase was the other financial liabilities, which grew by c. 2x YoY to RON 5.1bn, mainly as a result of higher amounts under the settlement. Finally, total equity grew by 7.9% YTD to RON 15bn, as a result of higher retained earnings.
