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BANCA TRANSILVANIA
Q3 2018 financial results
November 15th 2018
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Disclaimer
The information contained in the present document has not been independently verified and norepresentation or warranty expressed or implied is made as to, and no reliance should be placedon the fairness, accuracy, completeness or correctness of this information or opinions containedherein.
Banca Transilvania cautions readers that no forward-looking statement that may be contained inthe present document is a guarantee of future performance and that actual results could differmaterially from those contained in the forward-looking statements. Forward-looking statementsspeak only as of the date they are made, and Banca Transilvania undertakes no obligation toupdate publicly any of them in light of new information or future events.
None of Banca Transilvania or any of its affiliates, advisors or representatives shall have anyliability for any loss howsoever arising from any use of this document or its content or otherwisearising in connection with this document.
The present document does not constitute a public offer under any applicable legislation or anoffer to sell or solicitation of any offer to buy any securities or financial instruments or any adviceor recommendation with respect to such securities or other financial instruments.
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Banking sector dynamics
Q3 2018 Highlights
Performance in Q3 2018
Overview of business lines
BT Financial Group
Financial statements
1
2
3
4
5
a
Agenda
2
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342354
366 362 364377
394
428435
10000%
15000%
20000%
25000%
30000%
35000%
40000%
45000%
50000%
10 11 12 13 14 15 16 17 Jun-18
total bank net assets, RONbn source: NBR
16.2
%
15.7
%
13.5
%
13.5
%
11.3
%
10.0
%
9.6
%
9.4
%
8.3
%
8.0
0%
6.4
%
6.2
%
5.7
%
2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18
NPE ratio (EBA), % source: NBR
Bank assets rose 1.6% YTD as of Jun end
Loan quality further improving, NPE ratio drops below 6%
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Bank assets continued to expand during 1H18 reaching RON 435bn as credit activity gathers pace
3
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6.17.4 7.4 7.8 7.9
6.5 6.85.9
7.2 7.7 8.1 8.3 7.83.2
-1.4 -1.7 -2.1-0.9 -0.7
0.1 1.2
2.2 1.63.2 3.5 3.6
-2.9
-0.6 -0.7
-4.3 -5.6
-3.2
-0.5
2.3
6.6
2.52.1
3.73.4
-10
-5
0
5
10
15
20
3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18
YoY, RONbn source: NBR
non-financial corporate loans
financial corporate (excl. MFIs) loans
household - other loans
household - consumer credit
household - housing loans
Private loans expanding at a fast pace Housing loans remain the main driver of credit growth
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
4
0.6
%
3.0
%
2.8
%
1.16
%
1.17
%
1.2
4%
3.1
%
4.4
%
7.4
%
5.7
% 6.1
%
6.8
%
6.3
%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18
%YoY source: NBR
Lending up 6.3% YoY to RON 248bn end of Q3’18
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7782
85 85
93
110
126
146
162
132
141 141
133
119
107
94
87 86
0%
2000%
4000%
6000%
8000%
10000%
12000%
14000%
16000%
10 11 12 13 14 15 16 17 Sep-18
RONbn source: NBR
RO
N l
oa
ns
FC
Y l
oa
ns
78%
65%
86%
60%
22%
35%
14%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
household -consumer
credit
household -housing loans
household -other loans
non-financialcorporate loans
structure by currency as of Sepsource: NBR
RO
N l
oa
ns
FC
Y l
oa
ns
LCY loans more than double compared to 2010
All types of credit are now mostly RON denominated
Local currency loans at RON 162bn make up 2/3 of the private credit
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
5
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The real economy & investment cycle
Economy Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
6
Evolution around the potential pace Deterioration of the current account
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
3Q
05
1Q0
63
Q0
61Q
07
3Q
07
1Q0
83
Q0
81Q
09
3Q
09
1Q10
3Q
101Q
113
Q11
1Q12
3Q
121Q
133
Q13
1Q14
3Q
141Q
153
Q15
1Q16
3Q
161Q
173
Q 1
71Q
18
3Q
18
GDP (%, YoY) source: Statistics Office
-25
-20
-15
-10
-5
0
5
3Q
08
1Q 0
9
3Q
09
1Q 1
0
3Q
10
1Q 1
1
3Q
11
1Q 1
2
3Q
12
1Q 1
3
3Q
13
1Q 1
4
3Q
14
1Q 1
5
3Q
15
1Q 1
6
3Q
16
1Q 1
7
3Q
17
1Q 1
8
3Q
18
Current account deficit (EUR bn, TTM) source: NBR
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The financial economyInflationary pressures fading out gradually, while EUR/RON resilient tothe volatility on the global markets
Economy Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
7
Inflation changed the trend EUR/RON stability
-4
-2
0
2
4
6
8
Jan
-13
Ap
r-1
3Ju
l-13
Oct
-13
Jan
-14
Ap
r-1
4Ju
l-14
Oct
-14
Jan
-15
Ap
r-1
5Ju
l-15
Oct
-15
Jan
-16
Ap
r-1
6Ju
l-1
6O
ct-1
6Ja
n-1
7A
pr-
17
Jul-
17O
ct-1
7Ja
n-1
8A
pr-
18
Jul-
18O
ct-1
8
CPI (%, YoY) source: Statistics Office
4.5
4.6
4.6
4.7
4.7
4.8
4.8
No
v-17
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-18
Sep
-18
Oct
-18
EUR/RON source: NBR
Clasificare BT: Uz InternBanking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Banca Transilvania’s
business development and
financial performance in Q3 2018
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*without POCI adjustments
Q3 2018 BT Highlights
Banking sector dynamics Q1 2018 Highlights Performance in Q1 2018 Overview of business lines BT Financial Group
9
pr
ofi
tab
ilit
y
YTD Sep 2018 YTD Sep 2017 ∆
Net interest income RONmn 1,562.9 1,320.3 18.4%
Net fee and commission income RONmn 466.7 424.3 10.0%
Operating expenses RONmn (1,053.3) (957.6) 10.0%
Gross profit before provisions RONmn 1,189.2 959.6 23.9%
Net income RONmn 979.1 779.8 25.5%
Cost of risk, net (%) -0.32% 0.16%
NIM* 3.54% 3.19% 0.3 pp
ROE 19.00% 16.68% 2.3 pp
Cost-to-income ratio 46.97% 49.95% -3.0 pp
cr
ed
it
ac
tiv
ity
Sep-18 Dec-17 ∆
Gross loans to customers RONmn 34,690.5 31,828.3 9.0%
Deposits from customers RONmn 52,384.2 49,099.2 6.7%
Gross loans-to-deposits ratio 66.22% 64.82% 1.4 pp
NPL ratio 3.13% 3.05% 0.1 pp
ca
pit
al Sep-18 Dec-17 ∆
Total equity RONmn 7,175.9 6,970.1 3.0%
Tier 1 capital ratio (profit included) 18.81% 18.25% 3.1%
Total capital ratio (profit included) 23.16% 19.21% 20.5%
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Business performance Q3 2018at a glance
10
Total assets at RON 64.7bn Balance sheet consolidation
Capital adequacy ratio at 23.16%
Strong capital base, supporting organic and non organic growth
Net fees and commissions at RON 467mn +10% Y/Y
Increased number of operations and additional cross-sell
CoR, net CoR at -0.32%, recoveries and releases are higher than provision expenses
Net profit at RON 979mn
Net profit positively influenced by increase in interest income, fees and commissions income and decrease in provisions
Cost/income at 46.97% Operational efficiency closely monitored
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
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Trends in income structureRONmn
11
958
162
424
1,320
1,053
176
467
1,563
Net trading incomeNet fee and commission income
+10.0%
+9.0%
+10.0%
+18.4%
Operating expensesNet interest income
YTD Sep 2018
YTD Sep 2017
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Clasificare BT: Uz InternBanking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Loan structure
12
Loans to households, RONbn
8.2 8.7
8.49.3
Sep’18
18.00.1
Dec’17
16.70.0
Other ConsumptionHousing
10.7 11.7
4.34.9
Sep’18
16.6
Dec’17
15.0
Large corporatesSMEs
22%78%
RON FX
20%80%
RON FX
*SMEs identified according to internal classification rules
Loans to companies, RONbn
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Deposit structure
13
19.1 20.6
11.313.8
34.4
Sep’18Dec’17
30.4
Current accounts Deposits
11.09.6
7.78.4
Dec’17
18.7 18.0
Sep’18
Large corporatesSMEs
46%54%
FXRON
28%72%
FXRON
Deposits from households, RONbn Deposits from companies, RONbn
*SMEs identified according to internal classification rules
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
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NPL ratio at 3.13%Banca Transilvania continued to provide a sound coverage ratio for its PAR 90 portfolio
14
33%
45%46% 40%
54%46%
2013
122%
77% 78%
46%
119%
73%
127%
2017
49%
2016
117%
74%
43%
2015
119%
79%
40%
2014
127%
81%
45%
Sep’ 2018
NPL coverage with mortgage collaterals NPL coverage with provisions
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Clasificare BT: Uz InternBanking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Retail bankingretail loan portfolio reached RON 18bn as of Sep 2018
15
60,000 non-card retail loans disbursed in
the first nine months of 2018
3.2 mn active cards, with a market share of
about 19%
The Bank manages a portfolio of 410.000
credit cards, representing 30% of the
Romanian retail card transactions.
BT Pay- first bank wallet in Romania – has
over 180.000 downloads; A 33% increase
compared to Q2 2018 for mobile-phone
transactions and money transfers.
10.3
18.0
16.7
15.1
7.56.8
3.3
13.6
20162015 201720142013 Sep-18
Retail loansLoans transferred from VBRO
0.2
Loans transferred from Bancpost
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SME bankingSME loan portfolio at RON 4.9bn and 252,400 active clients
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
16
• First non-banking solutions platform for
SMEs, BT Store
• Banca Transilvania continued its specific
focus on the SME business sector, offering
more than 15,000 new loans in the first nine
months of 20182.8
4.9
4.3
3.2
2.62.5
0.3
20172016 Sep-182013 2015
3.1
2014
SME loansLoans transferred form VBRO
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Corporate bankingcorporate loan portfolio reached RON 11.7bn
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
17
• Sectorial specialization is a main focus
• BT is present with lending facilities
especially in the industrial manufacturing
and agribusiness segments
• Joint actions BT and Bp to ensure common
clients customized approach
10.1
11.7
10.711.1
10.09.90.9
2017
11.0
20142013 2015 2016 Sep’18
Loans transferred form VBRO Corporate loans
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Total assets: RON 3.5bn
AuM: RON 3,824mn
Total assets: RON 906mn
*Total assets for Bancpost are computed under IFRS;Total assets for Victoriabank are computed under local FINREP standards, at official MDL/RON exchange rate as at 30.09.2018;Total assets for subsidiaries other than banks are presented under RAS rules.
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
Banca Transilvania Financial Groupas of 30.09.2018*
Total assets: RON 64.7bn
18
Total assets: RON 288mn
Total assets: RON 136mn
Total assets: RON 162mn
Total assets: RON 9.1bn
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H1 2018 Highlights – consolidated figures
19
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YTD Sep 2018 YTD Sep 2017 ∆
Net interest income RONmn 2,089.6 1,379.0 51.5%
Net fee and commission income RONmn 569.2 458.8 24.1%
Operating expenses RONmn (1,587.3) (1,056.2) 50.3%
Gross profit before provisions RONmn 1,668.6 1,033.5 61.5%
Net profit RONmn 1,241.1 829.5 49.6%
EPS RON 0.2553 0.1729 47.7%
Cost of risk, net (%) 0.34% 0.23% 49.2%
NIM* 3.99% 3.30% 20.9%
ROE 22.65% 17.07% 32.7%
Cost-to-income ratio 48.75% 50.54% -3.5%
cr
ed
it
ac
tiv
ity Sep-18 Dec-17 ∆
Gross loans to customers RONmn 40,889.4 32,120.7 27.3%
Deposits from customers RONmn 62,787.9 48,932.2 28.3%
Gross loans-to-deposits ratio 65.12% 65.64% -0.8%
ca
pit
al
Sep-18 Dec-17 ∆
Total equity RONmn 7,542.2 7,125.4 5.8%
Tier 1 capital ratio (profit included) 16.31% 18.37% -11.2%
Total capital ratio (profit included) 19.92% 19.31% 3.2%
*without POCI adjustments
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annex Iincome statement YTD Sep 2018 – individual figures
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
20
IFRS individual, RONmn YTD Sep 2018 YTD Sep 2017 ∆
Net interest income 1,562.9 1,320.3 18.4%
Net fee and commission income 466.7 424.3 10.0%
Net trading income 176.5 162.0 9.0%
Other net income 36.5 10.7 240.6%
Operating income 2,242.5 1,917.2 17.0%
Personnel expenses (584.2) (528.3) 10.6%
D&A (80.2) (64.8) 23.8%
Other operating expenses (388.9) (364.5) 6.7%
Operating expenses (1,053.3) (957.6) 10.0%
Cost of risk 84.3 (37.8)
Net income before taxation 1,273.4 921.9 38.1%
Income tax (expense) / revenue (294.4) (142.0) 107.3%
Net income after taxation 979.1 779.8 25.5%
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annex IIbalance sheet 30.09.2018 – individual figures
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
21
IFRS individual, RONmn Sep 2018 Dec 2017 ∆
Cash & cash equivalents 6,204.0 6,637.7 -6.5%
Placements with banks 4,133.7 5,302.3 -22.0%
Loans to customers, net 32,510.6 29,914.0 8.7%
T-bills & securities 19,478.8 16,115.7 20.9%
Fixed assets 583.2 533.4 9.3%
Participations 1,183.8 156.6 655.8%
Current tax assets 22.9 148.6 -84.6%
Deferred tax assets 32.2 173.2 -81.4%
Other financial assets 429.3 211.9 102.6%
Other assets 108.2 108.5 -0.3%
Total assets 64,686.9 59,302.1 9.1%
Deposits from banks 161.9 127.9 26.5%
Deposits customers 52,384.2 49,099.2 6.7%
Loans from banks and FIs 1,535.1 1,099.9 39.6%
Subordinated loan 1,759.0 414.6 324.3%
Provisions for other risks and charges 317.0 373.1 -15.0%
Other financial liabilities 1,294.0 1,154.8 12.1%
Other liabilities 59.8 62.4 -4.2%
Total liabilities 57,511.1 52,332.0 9.9%
Shareholders’ equity 7,175.9 6,970.1 3.0%
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annex IIIincome statement YTD Sep 2018 – consolidated figures
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
22
IFRS consolidated, RONmn YTD Sep 2018 YTD Sep 2017 ∆
Net interest income 2,089.6 1,379.0 51.5%
Net fee and commission income 569.2 458.8 24.1%
Net trading income 169.9 204.9 -17.1%
Other net income 427.2 47.0 809.8%
Operating income 3,255.9 2,089.7 55.8%
Personnel expenses (732.7) (560.8) 30.7%
D&A (121.4) (89.9) 35.1%
Other operating expenses (733.2) (405.5) 80.8%
Operating expenses (1,587.3) (1,056.2) 50.3%
Cost of risk (103.3) (53.9) 91.6%
Bargaining gain 110.8 0.0
Net income before taxation 1,676.1 979.6 71.1%
Income tax (expense) / revenue (435.0) (150.1) 189.9%
Net income after taxation 1,241.1 829.5 49.6%
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annex IVbalance sheet 30.09.2018 – consolidated figures
Banking sector dynamics Q3 2018 Highlights Performance in Q3 2018 Overview of business lines BT Financial Group
23
IFRS consolidated, RONmn Sep 2018 Dec 2017 ∆
Cash & cash equivalents 8,823.7 6,637.7 32.9%
Placements with banks 5,301.6 5,348.1 -0.9%
Loans to customers, net 38,433.4 30,249.0 27.1%
T-bills & securities 22,076.8 16,096.2 37.2%
Fixed assets 805.0 766.9 5.0%
Current tax assets 0.0 146.9 -100.0%
Deferred tax assets 73.5 187.1 -60.7%
Other financial assets 791.6 234.3 237.8%
Other assets 246.1 138.8 77.3%
Total assets 76,551.7 59,805.0 28.0%
Deposits from banks 282.6 127.9 120.9%
Deposits from customers 62,787.9 48,932.2 28.3%
Loans from banks and FIs 1,737.7 1,487.0 16.9%
Subordinated loan 1,763.0 414.6 325.3%
Current tax liabilities 92.2 0.0
Provisions for other risks and charges 381.6 382.8 -0.3%
Other financial liabilities 1,549.1 1,216.2 27.4%
Other liabilities 125.4 104.0 20.5%
Total liabilities 68,719.5 52,664.9 30.5%
Shareholders’ equity 7,542.2 7,125.4 5.8%
Non-controlling interest 290.0 14.7 1873.8%
Total liabilities and equity 76,551.7 59,805.0 28.0%
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Banca Transilvania HQ8, G. Baritiu Street, Cluj-Napoca 400027, Romania
+ 40 264 407 150+ 40 264 407 179 /FAX
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