According to preliminary FY 2022 results, Banca Transilvania recorded a net interest income growth of 40.9% YoY, a net fee and commission income increase of 21.5%, operating income growth of 27.1%, and a net income of RON 2.49bn, an increase of 22.9% YoY.
In total, Banca Transilvania (TLV) issued 260k loans in 2022, with the total amount of loans equaling 1.14m by the end of the year, an increase of 21% YoY. The total value of the issued loans to customers amounted to RON 68bn, an increase of 21% YoY. The high volume of loans issued, as well as higher interest rates on said loans, have led to a net interest income of 4.43bn, an increase of 41% YoY. Net fee and commission income (NFCI) also noted an increase, growing by 21.5% YoY, and amounting to RON 1.17bn. Even though the Group did not provide much clarification as to why the NFCI increased, it could be summarized that due to the higher number of customers (3.5m retail customers) using loans issued by the banks, they are also using more of the bank’s services, leading to the higher income on this line.
Together, this led to the operating income amounting to RON 6.28bn, an increase of 27% YoY. Moving on to the operating expenses, in total, they amounted to RON 2.98bn, an increase of 25%, or RON 601.7m YoY. This growth was driven by an increase of personnel expenses, which grew by 24.6% (or RON 327.3m) and amounted to RON 1.66bn. Other op. expenses also noted an increase, growing by 34.4% (or RON 239.3m) YoY to RON 935.2m.
This also leads to a cost-to-income ratio of 47.5%, an increase of app. 0.7 p.p. YoY, implying that the Group has managed its revenue and especially cost growth well. Combined, this leads us to a net profit of RON 2.49bn, an increase of 22.9% YoY.
Banca Transilvania key financials (Preliminary 2022 vs. 2021, RONm)
Source: Banca Transilvania, InterCapital Research
Moving on to the balance sheet, the total assets of the Group amounted to RON 140.5bn, an increase of 6% YoY. This was mainly driven by the aforementioned increase in loans to customers, which increased by 21.2% and amounted to RON 68bn. A notable increase was also recorded in other financial assets, which grew by 78.9% to RON 1.89bn. On the other hand, Cash and cash equivalents at Central Bank decreased by 20.6% YoY and amounted to RON 14.5bn. Placements with banks and public institutions also decreased, declining by 46.4% YoY and amounting to RON 5.57bn.
On the other hand, looking at the liabilities, in total they amounted to RON 131bn, an increase of 7.5% YoY. The primary drivers of this growth were the deposits from customers, which increased by 10.8% YoY and amounted to RON 119.7bn. Of this, RON 79.9bn were retail customer deposits, while RON 39.85bn were deposits from corporate customers. Deposits from banks also noted an increase, growing by 63.8% to RON 1.68bn. On the other hand, loans from banks and other financial institutions decreased by 38.9% to RON 4.84bn.
Banca Transilvania also commented on several other pieces of financial information. The NPL ratio stands at 2.44% at the end of 2022, and the total provision coverage of NPLs stands at 195%. Finally, the Capital Adequacy Ratio (CAR) stands at 19.26% (excl. net profit) and 21.62% (incl. net profit), and given that the Board of Directors (BoD) also proposed that roughly RON 900m of the net profit be used for the capitalization purposes, the 21.6% number should be the one looked at. The BoD proposed that the remaining amount (RON 1.1bn) be moved to retained earnings.