BANCA TRANSILVANIA Q1 2017 Financial Results · source: NBR 110 114 119 122 126 107 102 99 95 94 6000% 7000% 8000% 9000% 10000% 11000% 12000% 13000% 4Q15 1Q16 2Q16 3Q16 4Q16 loans

BANCA TRANSILVANIAQ1 2017 Financial Results

1

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.

2

AGENDA

Banking Sector Dynamics

Q1 2017 Highlights

Performance in Q1 2017

Overview of Business Lines

BT Financial Group

Financial Statements

1

2

3

4

5

A

3

BANK ASSETS drawing near the RON 400bn benchmark

362

353 352 351

364

361363

360

377

370

380378

394

-0.9% -1.0%-0.7% -0.6%

0.5%

2.4%

3.1%

2.3%

3.6%

2.5%

4.6%

5.1%

4.4%

320

330

340

350

360

370

380

390

-3%

-1%

1%

3%

5%

7%

9%

11%

4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16

total bank net assets source: NBR

20.7%20.2%

16.2%15.7%

13.5% 13.5%

11.3%

10.0%9.5%

4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

NPL ratio, % source: NBR

Bank assets reach record levels NPL ratio below 10% threshold

BANKING SECTOR DYNAMICS

Q1 2017 highlights PERFORMANCE IN Q1 2017OVERVIEW OF BUSINESS

LINESBT FINANCIAL GROUP

net assets

%YoY

net assets

in RONbn

4

LCY LOANS TO HOUSEHOLDSsupporting the credit activity troughout the whole year

-3.3

% -2.7

%

-3.9

%

-4.5

%

-3.3

%

-3.4

%

-0.1

%

0.6

%

3.0

%

2.8

%

1.1

6%

1.1

7%

1.2

4%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

4Q13 2Q14 4Q14 2Q15 4Q15 2Q16 4Q16

loans non-government , %YoY source: NBR

110

114

119

122

126

107

102

99

95 94

6000%

7000%

8000%

9000%

10000%

11000%

12000%

13000%

4Q15 1Q16 2Q16 3Q16 4Q16

loans non-government , RONbn source: NBR

RO

N l

oans

FCY l

oans

The rise in credit to households offsetting the decline in corporate loans

Loans in LCY amounting to 57% oftotal loans at 2016-end




5

ROMANIAN REAL ECONOMY Acceleration to 4.8% YoY in 2016, highest since 2008

Two stages of the Fiscal Act: divergence consumption vs. investments

Strong increase of FDIs ~ EUR 4bn




6

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

FDIs (EUR, mn) source: National Bank of Romania (NBR)

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

-15

-10

-5

0

5

10

15

20

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

Private consumption Fixed investments (rhs)

Private consumption vs. fixed investments

(%, YoY) source: Statistics Office (NIS)

FINANCIAL ECONOMYhigher global financing costs vs. twin deficits and political risks in Romania

The impact of the VAT cuts is fading out … HICP YoY changing the trend

Huge volatility and high pressure on bonds and FX markets




-4%

-3%

-2%

-1%

0%

1%

2%

3%

Jan-1

4

Jun-1

4

No

v-1

4

Apr-

15

Sep-1

5

Feb

-16

Jul-1

6

De

c-1

6

HICP (YoY) source: Statistics Office (NIS)

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.4

4.4

4.4

4.4

4.5

4.5

4.5

4.5

4.5

4.6

Jan-1

6

Feb

-16

Ma

r-1

6

Apr-

16

Ma

y-1

6

Jun-1

6

Jul-1

6

Aug-1

6

Sep-1

6

Oct-

16

No

v-1

6

De

c-1

6

EUR/RON vs. 10 YR T-Bonds yield (%)source: National Bank of Romania (NBR)

EUR/RON 10 YR Bonds yield (%) (rhs.)

7

Banca Transilvania’sBusiness Development and Financial Performance Q1 2017

8

Q1 2017 HIGHLIGHTSP

RO

FIT

AB

ILIT

Y

Mil. RON Q1 2017 Q1 2016 ∆

Operating income RONmn 586.6 600.2 -2.3%

Operating expenses RONmn (300.0) (270.8) 10.8%

Gross profit before provisions RONmn 286.7 329.3 -13.0%

Net profit RONmn 246.2 228.5 7.7%

Cost of risk, net (%) -0.08% 0.87% -109.0%

NIM 3.26% 3.56% -0.3 pp

NIM* 3.15% 3.15% 0.0 pp

ROE 17.08% 15.31% 1.8 pp

Cost-to-income ratio 51.13% 45.13% 6.0 pp

CR

ED

IT

AC

TIV

ITY

Mar-17 Dec-16 ∆

Gross loans to customers RONmn 30,324.7 29,379.7 3.2%

Deposits from customers RONmn 41,754.0 41,851.8 -0.2%

Gross Loans-to-deposits ratio 72.63% 70.20% 2.4 pp

NPL ratio 4.90% 4.62% 0.3 pp

CA

PIT

AL Mar-17 Dec-16 ∆

Total equity RONmn 6,263.9 5,984.1 4.7%

Tier 1 capital ratio (profit included) 17.52% 17.14% 2.2%

Total capital ratio (profit included) 18.60% 18.30% 1.7%

*without one-off adjustments (PPA adjustments : incurred loss and expected loss)

DYNAMICSBANKING SECTOR



9

BUSINESS PERFORMANCE Q1 2017at a glance

Total assets at RON 51.9 bn ● Enhanced ALM for higher efficiency

Capital adequacy ratio at 18.6%

● Strong capital base, supporting organic and non organic growth

Net fees and commissions at RON 129.4 mn 11.1% Y/Y

● Driven by increased number of operations and additional cross-sell

CoR, net ● CoR at -0.08%, including releases and recoveries

Net profit at RON 246.2 mn

● Net profit positively influenced by increase in interest income, fees and commissions and decrease in provisions

Cost/income at 51.13%● Cost to income at a comfortable level, with some expenses booked in

advance for the whole year




10

TRENDS IN INCOME STRUCTURE




271

37

117

429

300

51

129

456

Operating expensesNet trading incomeNet fee and commission income

Net interest income

+6,5%

+11,1%

+36,8%

+10,8%

11

Q1 2016

Q1 2017

VBRO loans adjustments

63

66

366

390

Loans to Households, RONbn

Mar’17

15,4

8,1

7,3

0,0

Dec’16

15,1

8,1

6,9

0,1

ConsumptionHousingOther

Mar’17

14,9

11,1

3,9

Dec’16

14,3

11,1

3,2

Large corporatesSMEs

28%72%

RON FX

20%80%

RON FX

LOAN STRUCTURE

*SMEs identified according to internal classification rules




Loans to Companies, RONbn

Loans to Households Loans to Companies

12

Mar’17

27,2

18,5

8,6

Dec’16

26,4

18,4

7,9

DepositsCurrent accounts

15,5

10,1

5,4

Mar’17

14,6

8,5

6,1

Dec’16

Large corporatesSMEs

42%58%

RON FX

26%74%

RON FX

DEPOSIT STRUCTURE




*SMEs identified according to internal classification rules

Deposits from Households, RONbn Deposits from Companies, RONbn

Deposits from CompaniesDeposits from Households

13

6,4

NPL RATIO AT 4.90%

● Banca Transilvania continued to provide a sound coverage ratio for its PAR 90 portfolio




*For Financial Statements purposes the gross loans are netted by the unwinding adjustment; For coverage ratio purposes the respective adjustment is included in the total stock of provisions

NPL coverage with mortgage collaterals

NPL coverage with provisions

33%

45%46% 40%

54%45%

12

108%

75%

33%

119%

79%

40%

14

127%

81%

46%

13

122%

77%

Q1’1716

117%

74%

43%

15

113%

73%

39%

NPL coverage with provisions

NPL coverage with mortgage collaterals

14




Retail Banking

Retail loan portfolio reached RON 15.4 bn as at Mar’17

15,000 non-card retail loans disbursed in Q1 2017

Market share for retail loans at December 2016 -

14.25%

Internet banking users: over 820,000

Mobile banking users: over 300,000

2.9 mn active cards, of which more than 330,000

credit cards; BT is the market leader, both in terms

of number of cards, as well as volume of

transactions generated by its cards, with a market

share of almost 20%.

15

10.3

15.415.1

7.56.8

6.3

3.3

20132012 Q1 201720162015

13.6

2014

Loans transferred from VBRO

Retail loans

SME Banking

● Banca Transilvania continued its specific focus on the SME business sector, offering almost 4,000 new loans in Q1 2017

BT launched a new platform to support the small

and micro companies

BT continued its partnership with DFIs, offering

special loan and guarantee products to its SME

clients

● Agriculture, Healthcare and European Structural Funds are on BT radar as specialized sectorial approaches

SME loan portfolio at RON 3.9 bnand 214,700 active clients




16

2.8

3.9

3.2

2.62.52.5

0.3

Q1 201720162015

3.1

201420132012

SME Loans

Loans transferred form VBRO

Corporate Banking

● The reorganizational process was concluded, including client new segmentation & deeper sectorial specialization

BT was present with lending facilities especially in

the industrial manufacturing and agribusiness

segments

BT continued to play an important role as co-lender

of EU structural funds eligible projects

Corporate loan portfolio aboveRON 11.1 bn




17

10.1

11.111.1

10.09.9

8.7

0.9

Q1 201720162015

11.0

20142012 2013

SME Loans

Loans transferred form VBRO

Banca Transilvania Financial Group

As of 31.03.2017*:




Total assets: 51.9 RON bn

Total assets: 72 RON mn. Total assets: 139 RON mn.

AuM: 3,509 RON mn.Total assets: 605 RON mn.

Total assets: 145 RON mn.

*Total assets for subsidiaries are presented under RAS rules

18

Q1 2017 HIGHLIGHTS – Consolidated FiguresP

RO

FIT

AB

ILIT

Y

Mil. RON Q1 2017 Q1 2016 ∆

Operating income 647.5 621.8 4.1%

Operating expenses (332.4) (288.4) 15.3%

Gross profit before provisions 315.1 333.4 -5.5%

Net income 266.9 231.1 15.5%

EPS RON 0.0615 0.0632 -2.8%

Cost of risk, net (%) 0.00% 0.86% -100.5%

NIM 3.27% 3.57% -8.4%

NIM* 3.16% 3.17% -0.1%

ROE (%) 18.07% 15.32% 17.9%

Cost-to-income ratio (%) 51.33% 46.38% 10.7%

CR

ED

IT

AC

TIV

ITY Mar-17 Dec-16

Gross loans to customers RONmn 30,412.8 29,477.9 3.2%

Deposits from customers RONmn 41,555.6 41,681.5 -0.3%

Loans-to-deposits ratio 73.19% 70.72% 3.5%

CA

PIT

AL

Mar-17 Dec-16

Total equity RONmn 6,440.3 6,152.7 4.7%

Tier 1 capital ratio (Profit included) 17.73% 17.36% 2.2%

Total capital ratio (Profit included) 18.81% 18.50% 1.7%




19

*without one-off adjustments (PPA adjustments : incurred loss and expected loss)

ANNEX I INCOME STATEMENT YTD Q1 2017 - Individual

IFRS, individual, RONmn Q1 2017 Q1 2016 ∆

Net interest income 456.3 428.6 6.5%

Net fee and commission income 129.4 116.5 11.1%

Net trading income 50.5 36.9 36.8%

Other net income (49.7) 18.1 -373.8%

Operating income 586.6 600.2 -2.3%

Personnel expenses (165.0) (151.5) 8.9%

D&A (19.6) (17.6) 11.4%

Other operating expenses (115.4) (101.7) 13.5%


Cost of risk 5.92 (60.6)

Bargaining gain 0.0 0.0

Net income before taxation 292.6 268.7 8.9%

Income tax expense (46.4) (40.2) 15.3%

Net income after taxation 246.2 228.5 7.7%

20

ANNEX II BALANCE SHEET Q1 2017 - Individual

IFRS, individual, RONmn Mar-17 Dec-16 ∆

Cash & cash equivalents 4,428.0 5,293.6 -16.4%

Placements with banks 2,820.0 2,524.9 11.7%

Loans to customers, net 28,168.7 27,210.0 3.5%

T-bills & securities 15,190.3 15,402.1 -1.4%

Fixed assets 466.6 448.7 4.0%

Participations 136.7 136.7 0.0%

Deferred tax assets 317.1 373.9 -15.2%

Other assets 361.0 379.7 -4.9%

Total assets 51,888.5 51,769.6 0.2%

Deposits from banks 700.8 247.3 183.4%

Deposits customers 41,754.0 41,851.8 -0.2%

Loans from banks and FIs 1,736.9 2,246.5 -22.7%

Subordinated loan 425.7 424.1 0.4%

Other liabilities 1,007.2 1,015.9 -0.9%

Total liabilities 45,624.5 45,785.5 -0.4%

Shareholders’ equity 6,263.9 5,984.1 4.7%

21

ANNEX III INCOME STATEMENT YTD Q1 2017 - Consolidated

IFRS, consolidated, RONmn Q1 2017 Q1 2016 ∆

Net interest income 473.1 439.7 7.6%

Net fee and commission income 138.7 124.0 11.9%

Net trading income 61.0 31.3 95.3%

Other net income (25.3) 26.9

Operating income 647.5 621.8 4.1%

Personnel expenses (175.3) (158.3) 10.8%

D&A (27.2) (21.9) 24.0%

Other operating expenses (129.9) (108.2) 20.1%


Cost of risk 0.3 (60.0)

Bargaining gain 0.0 0.0

Net income before taxation 315.4 273.3 15.4%

Income tax expense (48.5) (42.3) 14.7%

Net income after taxation 266.9 231.1 15.5%

22

ANNEX IV BALANCE SHEET 2016 - Consolidated

IFRS, consolidated, RONmn Mar-17 Dec-16 ∆

4,428.0 5,293.7 -16.4%

Cash & cash equivalents 2,878.2 2,563.8 12.3%

Placements with banks 28,175.1 27,234.0 3.5%

Loans to customers, net 15,176.4 15,399.7 -1.5%

T-bills & securities 670.9 645.3 4.0%

Fixed assets 323.9 378.7 -14.5%

Deferred tax assets 414.3 428.9 -3.4%

Other assets 52,066.9 51,944.2 0.2%

Total assets

700.8 247.3 183.4%

Deposits from banks 41,555.6 41,681.5 -0.3%

Deposits customers 1,780.3 2,304.9 -22.8%

Loans from banks and FIs 425.7 424.1 0.4%

Subordinated loan 0.0 0.0

Other liabilities 1,164.2 1,133.8 2.7%

Total liabilities 45,626.6 45,791.5 -0.4%

Total equity 6,440.3 6,152.7 4.7%

Total liabilities and equity 52,066.9 51,944.2 0.2%

23

Banca Transilvania HQ8, G. Baritiu Street, Cluj-Napoca 400027, Romania

+ 40 264 407 150+ 40 264 407 179 /FAX

[email protected]

www.bancatransilvania.ro/en/investor-relationswww.bancatransilvania.rowww.bt24.ro

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24

Documents

BANCA TRANSILVANIA Q1 2017 Financial Results · source: NBR 110 114 119 122 126 107 102 99 95 94 6000% 7000% 8000% 9000% 10000% 11000% 12000% 13000% 4Q15 1Q16 2Q16 3Q16 4Q16 loans