Banca Transilvania Publishes Q1 2023 Results

In Q1 2023, Banca Transilvania recorded a net interest income growth of 28% YoY, net fee and commission income increase of 11%, op. income growth of 34.3%, and a net income to majority of RON 804.5m, up 109.8% YoY.

In total, Banca Transilvania’s net interest income amounted to RON 1.24bn, an increase of 28.1% YoY. The growth in the NII was supported by the increase in the number of loans issued. On a YTD basis, this would amount to a slight decrease (-0.3%), while on a YoY basis, the number of loans issued increased by 13.9%. In fact, in Q1 2023, 59k new loans were issued, out of which 55k went to retail customers. Besides the loan volume growth, the net interest income was also supported by the increase in interest rates, mainly relating to the increase in the ROBOR index, but also the growth of interest on deposits.

The 2nd main driver of banking income growth, net fee, and commission income increased by 11.1% YoY and amounted to RON 287.9m. This increase was supported by the increase in the number of card transactions, as well as the increasing degree of customer digitalization. On the other hand, net trading income decreased by 19% YoY, and amounted to RON 135m, due to an increase in net expenses from derivatives, which was partially offset by net income from FX transactions. All of these categories taken together have led to a net banking/operating income increase of 34.3% YoY, amounting to RON 1.74bn in total.

Moving on to op. expenses, they amounted to RON 772.2m, representing a decrease of 6.2% YoY. This decline was mainly driven by a net income from impairment adjustments, expected losses for assets, provisions for other risks, and credit commitments in the amount of RON 40m, against a net expense of RON 101m in Q1 2022. Personnel expenses amounted to RON 476.3m, a 20% increase YoY, driven by the expansion in the Group’s employee base, with the number of employees increasing by 3.9% YoY on the Group level.

Finally, all of these positive developments led to a net income to majority of RON 804.5m, an increase of 109.8% YoY.

Banca Transilvania key financials (Q1 2023 vs. Q1 2022, RONm)

Source: Banca Transilvania, InterCapital Research

Taking a look at the balance sheet, the total assets of Banca Transilvania amounted to RON 147.9bn, an increase of 5.3% YTD, or RON 7.42bn. The two main drivers of this increase were the growth in financial assets measured at fair value through other items of comprehensive income, and the increase in cash and cash accounts with Central Banks. The first category increased by 8% (or RON 3.68bn) YTD and amounted to RON 47.2bn. This category is mainly related to treasury financial instruments, which recorded growth due to the increase in value of the managed portfolio of govt. bonds. The 2nd category, cash and current accounts with Central Bank increased by RON 3.3bn (or 22.8%) YTD and amounted to RON 17.9bn. This was mainly driven by the minimum compulsory reserve held with the National Bank of Romania (73% of this category) increasing.

On the other hand, placements with banks and public institutions decreased by 22% YTD (or RON 1.22bn) to RON 4.35bn, mainly under the influence of the change in volume of sight, collateral and term deposits at credit institutions, but also by the volume of reverse repo operations and loans granted to credit institutions.

On the flip side, total liabilities increased by 4.6% (or RON 6.1bn) YTD and amounted to RON 137.1bn, driven primarily by the increase in deposits from customers. In fact, these deposits increased by 5.9% (or RON 7.05bn) and amounted to RON 127.8bn. Meanwhile, the equity of the Group amounted to RON 10.9bn, an increase of 14.9% (or RON 1.4bn) YTD, mainly driven by higher retained earnings, which increased by 18.9% (or RON 843.7m), and amounted to RON 5.3bn.

Category : Flash News

Want to invest? Do not know how and where? Contact us and we will solve everything for you.