Banca Transilvania Publishes Q1 2022 Results

In Q1 2022, Banca Transilvania recorded a net interest income increase of 29.3%, net fee and commission income increase of 21.5%, an increase in operating income of 11.7%, and a net profit of RON 400.3m, a decrease of -39% YoY.

The Group’s net interest income amounted to RON 969.4m, an increase of 29.3% YoY. This growth was driven by the increased levels of lending, as app. 63k loans were granted by the bank during Q1, amounting to RON 6.4bn, an increase of 61% YoY. This would also mean that the bank has expanded its loan balance by RON 2.5bn, an increase of 5% compared to the end of 2021. Net fee and commission income increased by 21.5%, and amounted to RON 259m, driven by the increased activity of the bank. Finally, this led to an operating income of RON 1.29bn, an increase of 11.8% YoY.

Operating expenses more than doubled, and amounted to RON 822.9m. There were several factors that drove the increases in the OPEX, but the main one for sure is the impairment or reversal of impairment. In Q1 2021, this number reduced OPEX by RON 137.1m, while in Q1 2022, it increased it by RON 142.2m, leading to an overall increase in impairment costs of RON 279.2m. The growth can be attributed to the current geopolitical uncertainty, as the energy costs, inflation, and geopolitical uncertainty are posing a lot of challenges to the European economies, Romania included. As such, Banca Transilvania is evaluating all of the possible scenarios, and in order to quickly respond to any of them, they have increased provisions (impairments), particularly for loans to customers.

Another factor that had an influence is uncertainty regarding the current interest rate increases, and after yesterday’s announcement, the Romanian National Bank has raised key interest rates from 3% to 3.75%. Considering this will have a direct influence on all loans issued, increasing the risk of the people’s inability to pay back the loans, an increase in provisions is expected.

All of these reasons had an influence on the bottom line, with the bank’s net profit amounting to RON 400.3m, a decrease of -39% YoY.

Balance Sheet

Meanwhile, the Group’s total assets decreased to RON 128.3bn, a decrease of 3.2% YoY. The main driver of this decrease was the reduction of Cash and current accounts with the Central Banks, which decreased by -21.8% and amounted to RON 14.3bn. At the same time, financial assets at amortized cost decreased by -3.65% and amounted to RON 65.1bn. Inside this category, placements with banks decreased by -46.6%, and amounted to RON 5.5bn, while at the same time, loans and advances to customers increased by 4.4% and amounted to RON 57bn.

Moving on the liabilities side, the Group’s total liabilities decreased by -2.9% YoY and amounted to RON 118.5bn. This was driven by a decrease in loans from banks and other financial institutions, which fell by -47%, and amounted to RON 4.2bn, followed by the decrease in deposits from customers, which decreased by -0.6% and amounted to RON 107.4bn.

Banca Transilvania Key Financials (Q1 2021 vs. Q1 2022, RONm)

InterCapital
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Category : Flash News

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