During FY 2023, Banca Transilvania recorded NII growth of 17.8% YoY, NFCI increase of 10%, and a net income to majority of RON 2.98bn, a 19.9% increase YoY. The group’s NPL ratio stood at 1.98%.
Starting off with the net interest income, it amounted to RON 5.2bn during FY 2023, a 17.8% increase YoY. This came as a result of an increase in the lending activity to both households and corporate clients, as well as interest rates being higher compared to last year. In terms of the net fee and commission income, during FY 2023, it increased by 10% YoY to RON 1.28bn. This was supported by the increase in the number of transactions, the number of clients, and the diversification of the operations available to customers. The last component, net trading income, decreased by 4.2% YoY to RON 657m during 2023 on the back of lower income from interest rate and exchange rate derivatives, which was partially offset by higher income from foreign exchange transactions. The group’s non-performing loans ratio stood at 1.98%.
In terms of operating expenses, OPEX grew by 18.1% YoY to RON 3.5bn during the period. Breaking this down further, employee expenses grew by 18.8% YoY, amounting to RON 1.97bb. This increase came due to salary increases, benefits granted to employees to support them against the backdrop of inflationary pressures, as well as an expansion in the employee base. Banca Transilvania also recorded lower impairment (or rather a reversal of impairment) of financial assets not measured at fair value through P&L, which declined by 23.9% to RON 420.7m, also positively influencing the result. Due to all of these developments, the net income to majority also grew significantly, increasing by 19.9% YoY to RON 2.98bn during FY 2023.
Banca Transilvania key financials (FY 2023 vs. FY 2022, RONm)
Source: Banca Transilvania, InterCapital Research
Moving on to the balance sheet, during FY 2023, the total assets amounted to RON 169.2bn, an increase of over 20% YoY. Group’s placement with banks and public institutions increased significantly, more than 2x meaning Banca Transilvania issued more loans. Delving into this further, financial assets measured at FV through OCI, decreased by 6.6% YoY to RON 40bn. This basically means that the various debt and equity instruments decreased in value as compared to last year. In terms of other categories, loans and advances to customers grew by 11% YoY to RON 75.6bn. Finally, Cash and current accounts with Central Banks grew by 66.8% YoY to RON 24.3bn, reflecting better conditions currently offered on deposits at the Central Banks.
On the other hand, total liabilities grew by 18.5% YoY to RON 155.3m during FY 2023. This came primarily as a result of higher deposits from customers, which grew by 15.3% YoY to RON 138.1bn on the back of higher interest rates customers can achieve. Loans from banks and other financial institutions also increased, by almost 2x YoY to RON 9.5bn, while deposits from banks decreased by 38.4%, to RON 138m. Finally, other financial liabilities increased by 43.3% YoY to RON 2.5bn, which was supported by higher amounts under settlement, and higher amounts of dividends payable.
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