By Bogdan Todasca
In 2022, Banca Transilvania topped the ranking of the largest banks in Southeast Europe for the fifth consecutive year, withstanding global tensions. What was the key to its resilience?
We are proud to be one of the largest banks in this part of Europe. Our geography is Romania, so we have continued to be the main lender of the local economy throughout all these years, targeting almost all sectors of activity.
Our focus has always been on SMEs, where we have unique skills in the market and branches located in all areas of Romania, where other banks do not reach. We are well positioned in our relationship with our customers in several segments and we see that the bank is appreciated by its customers and they enjoy working with us. We are well positioned in the micro, SME and mid corporate segments, but also in the specialised sectors – medical and agriculture. Some of these will continue to benefit from public investments and European funds. We still have a significant gap with Western Europe in the medical sector – investments are needed and we have the know-how to help customers. In retail banking we have a few areas where we have reached network effects – BT Pay is the banking and payments app with most users in Romania, and STAR is the largest ecosystem of retailers and credit cards.
Given the challenges coming from the economic and international environment, each year we have been cautiously optimistic. Optimism gives us a special energy, a certain combustion while caution puts us on guard, given the volatility and fundamental changes in macroeconomic benchmarks during the recent years – a period in which we have had everything from pandemics to war. But we continue to move on.
What is your forecast for the bank’s financial performance in 2023?
As we are listed on the stock exchange, I will unfortunately not be able to make any forecasts publicly. From the 2023 first-quarter and first half results, one can predict BT’s performance to some extent, but – like any other element of the ecosystem – we depend on the challenges of the economic environment.
The bank is doing well, during the first half of the year we had continued the organic growth, mainly due to the increasing volume of transactions. More than 130,000 loans were granted, and we reached 4 million customers. We made further steps in terms of digitisation and inclusion, and a total of 88% of our customers ended up using at least one of BT’s apps. Banca Transilvania Financial Group’s consolidated net profit at the end of June 2023 amounted to 1,581.7 million lei (+51.14% compared to June 2022), of which the bank’s net profit amounted to 1,269.0 million lei (+39.91% compared to June 2022).
We generate value for the population and companies, we support the economy during a key period for Romania. We continue to invest in increasing the volumes, the number of transactions and the financing of the economy in order to ensure prosperity for the Romanians. The bank’s profitability helps us strengthen BT’s capital in order to fulfill our plans and meet legal regulations.
What obstacles to growth do you anticipate and what opportunities do you see in the short term?
I would refer to both Banca Transilvania and Romania because, if our country is doing well, so is the bank. For BT, an opportunity is the large number of customers. As I said, we have exceeded the 4 million clients’ milestone, which allows us to have a critical mass for selling products and services, but also for risk dispersion. Another would be the bank’s magnetism towards attracting new customers. For example, the first six months of the year saw more than 280,000 new customers, which means more than 1,600 clients every day. Obstacles in banking come from fiscal instability and increasing regulatory complexity in our business, but we are adapting.
As far as Romania is concerned, a first opportunity is to increase the level of investments in infrastructure, mainly because this is a necessity. Transport infrastructure, for example, plays a decisive role in the country’s development because it fundamentally increases accessibility in various areas, reduces transport distance and time, and optimizes distances between economic areas. Another opportunity is the absorption of the National Recovery and Resilience Plan (NRRP) funds, which would help us, as a nation, grow economically and narrow the gap with the Western economies. Obstacles include the slowdown in the growth of the real economy, the intensification of geopolitical tensions and the pressure on international markets due to macroeconomic pressures globally.
The acquisition of three leasing companies in the last five years has strengthened your position in this market. What are your objectives within this division and how do you see Romania’s appetite for leasing evolving?
Each of the three acquisitions Țiriac Leasing (2022), Idea::Leasing (2021) and ERB Leasing (2018) – has brought us closer to the goal we have at BT Leasing, which is to strengthen our position in the market, to become number one in this segment, as we are in banking.
The leasing market in Romania has been growing in recent years and we believe in its potential because leasing is an easy, quick solution to purchase new, highperformance machinery and equipment. We are pleased to see the growing interest from customers in electric cars or energy efficient equipment. BT Leasing’s synergies with Banca Transilvania Financial Group, digitalisation, products and team are all our growth engine in this business segment.
As projects in Romania’s NRRP develop and new targets approach, do you anticipate a potential financing gap in any sector and how is the bank positioned to fill potential gaps?
I hope that Romania will respect the timetable for achieving the targets agreed in the NRRP and in line with the European Commission’s requirements. This would bring billions of euro to our country, together with public investment and reforms. The largest amount of investments from the NRRP by the end of the implementation period will go to the construction sector, which has several subsegments: infrastructure, renovations and utilities. Therefore, this is where a potential financing gap could be anticipated and we are ready to support companies involved in the completion of these projects.
Whether we are talking about investments in energy, education, digital transformation, sustainable transportation or investments to finance work to increase the energy efficiency of existing housing stock, our bank supports these public projects because they contribute to the sustainable development of the Romanian economy.
Moreover, under the NRRP private sector facilities, BT participates by financing the SMEs sustainability and competitiveness plans, which are supported by portfolio guarantees managed by the European Investment Fund.