BANCA TRANSILVANIA H1 2018 financial results August 10 th 2018 Clasificare BT: Uz Intern
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Agenda 1 2 3 4 5 a Banking sector dynamics H1 2018 Highlights Performance in H1 2018 Overview of business lines BT Financial Group Financial statements 2 Clasificare BT: Uz Intern
12% 10% 8% 6% 4% 2% 0% 440 420 400 380 360 340 320 20.2% 16.2% 15.7% 13.5% 13.5% 11.3% 10.0% 9.6% 9.4% 8.3% 8.00% 6.4% 6.2% Bank assets growing at the fastest pace since 1Q12 Bank assets Loan quality total bank net assets, RONbn, % source: NBR 428 432 NPL ratio (EBA), % source: NBR 406 9.6% 394 394 399 8.7% 7.5% 377 370 380 378 6.4% 361 363 360 3.1% 3.6% 4.6% 5.1% 4.4% 4.9% net assets %YoY 2.4% 2.3% 2.5% net assets in RONbn 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3
9% 7% 5% 3% 1% -1% -3% -0.1% 0.6% 3.0% 2.8% 1.16% 1.17% 1.24% 3.1% 4.4% 7.4% 5.7% 6.1% 6.8% Lending reaches RON 242bn at the end of June Private loans maintain their robust growth during the first semester Positive contribution across all segments %YoY source: NBR YoY, RONbn source: NBR 20 15 10 5 non-financial corporate loans financial corporate (excl. MFIs) loans household - other loans 6.6 household - consumer credit 3.7 household - housing loans 2.5 2.1 2.3 3.2 3.5 2.2 1.6 2.7 3.2 7.4 7.4 7.8 7.9 0.1 1.2 6.2 6.1 6.5 6.8 7.2 7.7 8.1 8.3 5.9 0-5 -10-1.4-1.7-0.9-0.7-2.1-0.5-0.6-0.7-3.2-4.3-5.6-2.9-4.6 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18-15 2Q15 4Q15 2Q16 4Q16 2Q17 4Q17 2Q18 4
16000% 14000% 12000% 10000% 8000% 6000% 4000% 2000% 0% RON loans FCY loans RON loans FCY loans 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% RON denominated loans make up 65% of all lending in Romania LCY loans continue to grow at double-digit YoY rates Companies have also been switching to LCY loans RONbn source: NBR 126 122 119 130 137 143 146 151 158 structure by currency as of June source: NBR 24% 37% 14% 40% 99 95 94 93 90 90 87 86 85 76% 86% 63% 60% 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 household - consumer credit household - housing loans household - other loans non-financial corporate loans 5 Clasificare Banking BT: sector Uz Intern dynamics H1 2018 Highlights Performance inh1 2018 Overview of business lines BT Financial Group
T1 96 T1 97 T1 98 T1 99 T1 00 T1 01 T1 02 T1 03 T1 04 T1 05 T1 06 T1 07 T1 08 T1 09 T1 10 T1 11 T1 12 T1 13 T1 14 T1 15 T1 16 T1 17 T1 18 1Q 05 1Q 06 1Q 07 1Q 08 1Q 09 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16 1Q 17 1Q 18 The real economy & investment cycle Deceleration converging towards potential Deterioration of the public finance Investments vs. consumption source: Statistics Office 20 60 Budget deficit / GDP (%, s.a) source: Eurostat 6 15 40 4 2 10 20 0 5-2 0 0-4 -5-20 -6-8 -10 Private consumption (%, YoY) -40-10 -15 Fixed investments (%, YoY) (rhs) -60-12 6 Clasificare BT: Economy Uz Intern H1 2018 Highlights Performance in H1 2018 Overview of business lines BT Financial Group
May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 The financial economy The normalization of the financing costs, given the post-crisis monetary cycle (FED and NBR) and the macroeconomic equilibria challenges The resilience of the FDIs The flattening of the yield curve FDIs (12M cumulative) source: NBR 12,000 The sovereign spread (10Y 6M) source: NBR 4.0 10,000 3.5 3.0 8,000 2.5 6,000 2.0 4,000 1.5 1.0 2,000 0.5 0 0.0 7 Clasificare BT: Economy Uz Intern H1 2018 Highlights Performance in H1 2018 Overview of business lines BT Financial Group
Banca Transilvania s business development and financial performance in H1 2018
capital credit activity profitability H1 2018 Highlights H1 2018 H1 2017 Net interest income RONmn 1,011.7 886.3 14.2% Net fee and commission income RONmn 302.6 273.9 10.5% Operating expenses RONmn (707.7) (614.2) 15.2% Gross profit before provisions RONmn 715.9 640.0 11.9% Net income RONmn 662.7 496.1 33.6% Cost of risk, net (%) -1.08% 0.37% NIM* 3.53% 3.22% 0.3 pp ROE 19.79% 16.64% 3.2 pp Cost-to-income ratio 49.71% 48.98% 0.7 pp Jun-18 Dec-17 Gross loans to customers RONmn 33,381.7 31,828.3 4.9% Deposits from customers RONmn 50,703.8 49,099.2 3.3% Gross loans-to-deposits ratio 65.84% 64.82% 1.0 pp NPL ratio 2.95% 3.05% -0.1 pp Jun-18 Dec-17 Total equity RONmn 6,709.7 6,970.1-3.7% Tier 1 capital ratio (profit included) 17.92% 18.25% -1.8% Total capital ratio (profit included) 22.41% 19.21% 16.6% *without POCI adjustments 9
Business performance H1 2018 at a glance Total assets at RON 62.9bn Capital adequacy ratio at 22.41% Net fees and commissions at RON 303mn +10.5% Y/Y CoR, net Net profit at RON 663mn Cost/income at 49.71% Balance sheet consolidation More efficient capital structure, supporting organic and non organic growth Increased number of operations and additional crosssell CoR at -1.08%, recoveries and releases are higher than provision expenses Net profit positively influenced by increase in interest income, fees and commissions income and decrease in provisions Operational efficiency closely monitored 10
Trends in income structure RONmn +14.2% H1 2017 H1 2018 1,012 886 +15.2% 708 614 +10.5% 274 303 +4.2% 103 107 Net interest income Net fee and commission income Net trading income Operating expenses 11
Loan portfolio structure Loans to households, RONbn Loans to companies, RONbn 16.7 0.0 17.4 0.0 15.0 16.0 8.4 8.9 4.3 4.8 8.2 8.5 10.7 11.2 Dec 17 Jun 18 Dec 17 Jun 18 Other Housing Consumption SMEs Large corporates 77% 23% 81% 19% RON FX RON FX *SMEs identified according to internal classification rules 12
Deposit structure Deposits from households, RONbn 30.4 32.9 Deposits from companies, RONbn 18.7 17.8 11.3 13.1 7.7 7.8 19.1 19.8 11.0 10.0 Dec 17 Jun 18 Dec 17 Jun 18 Current accounts Deposits SMEs Large corporates 54% 46% 70% 30% RON FX RON FX *SMEs identified according to internal classification rules 13
NPL ratio at 2.95% Banca Transilvania continued to provide a sound coverage ratio for its PAR 90 portfolio 122% 127% 119% 117% 127% 121% 33% 45% 45% 46% 46% 40% 40% 43% 54% 49% 51% 77% 81% 79% 74% 78% 70% 2013 2014 2015 2016 2017 H1 2018 NPL coverage with mortgage collaterals NPL coverage with provisions 14
Retail banking retail loan portfolio reached RON 17.4bn as of Jun 2018 13.6 15.1 16.7 17.4 38,000 non-card retail loans disbursed in H1 2018 3.3 Market share for retail loans at June 2018-14.11% 6.8 7.5 10.3 3.20 mn active 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 more than 20% 2013 2014 2015 2016 2017 H1 2018 Loans transferred from VBRO Retail loans 15
SME banking SME loan portfolio at RON 4.8bn and 254,000 active clients 4.3 4.8 2.5 2.6 3.1 0.3 3.2 Banca Transilvania continued its specific focus on the SME business sector, offering close to 9,500 new loans in H1 2018 2.8 2013 2014 2015 2016 2017 H1 2018 Loans transferred form VBRO SME loans 16
Corporate banking corporate loan portfolio reached RON 11.2bn 9.9 10.0 11.0 0.9 11.1 10.7 11.2 Sectorial specialization is a main focus BT is present with lending facilities especially in the industrial manufacturing and agribusiness segments 10.1 2013 2014 2015 2016 2017 H1 2018 Loans transferred form VBRO Corporate loans 17
Banca Transilvania Financial Group as of 30.06.2018* Total assets: RON 62.9bn Total assets: RON 9.7bn Total assets: RON 3.7bn Total assets: RON 114mn Total assets: RON 146mn Total assets: RON 892mn Total assets: RON 264mn AuM: RON 3,945mn *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 30.06.2018; Total assets for subsidiaries other than banks are presented under RAS rules. 18
capital credit activity profitability H1 2018 Highlights consolidated figures H1 2018 H1 2017 Net interest income RONmn 1,276.5 923.0 38.3% Net fee and commission income RONmn 361.9 295.0 22.7% Operating expenses RONmn (1,088.8) (677.3) 60.8% Gross profit before provisions RONmn 1,027.3 664.7 54.6% Net profit RONmn 864.6 512.7 68.6% EPS RON 0.1789 0.1070 67.2% Cost of risk, net (%) -0.44% 0.39% -212.8% NIM* 3.83% 3.31% 15.9% ROE 23.21% 16.43% 41.3% Cost-to-income ratio 51.45% 50.47% 2.0% Jun-18 Dec-17 Gross loans to customers RONmn 40,185.0 32,120.7 25.1% Deposits from customers RONmn 61,482.7 48,932.2 25.6% Gross loans-to-deposits ratio 65.36% 65.64% -0.4% Jun-18 Dec-17 Total equity RONmn 7,005.0 7,125.4-1.7% Tier 1 capital ratio (profit included) 15.22% 18.37% -17.1% Total capital ratio (profit included) 18.88% 19.31% -2.2% *without POCI adjustments 19
annex I income statement H1 2018 individual figures IFRS individual, RONmn H1 2018 H1 2017 Net interest income 1,011.7 886.3 14.2% Net fee and commission income 302.6 273.9 10.5% Net trading income 107.1 102.8 4.2% Other net income 2.2 (8.7) Operating income 1,423.6 1,254.2 13.5% Personnel expenses (397.2) (338.2) 17.4% D&A (51.7) (41.2) 25.4% Other operating expenses (258.8) (234.8) 10.2% Operating expenses (707.7) (614.2) 15.2% Cost of risk 181.9 (57.5) Net income before taxation 897.8 582.5 54.1% Income tax (expense) / revenue (235.1) (86.4) 172.0% Net income after taxation 662.7 496.1 33.6% 20
annex II balance sheet H1 2018 individual figures IFRS individual, RONmn Jun 2018 Dec 2017 Cash & cash equivalents 6,318.0 6,637.7-4.8% Placements with banks 4,545.3 5,302.3-14.3% Loans to customers, net 31,352.2 29,914.0 4.8% T-bills & securities 18,454.0 16,115.7 14.5% Fixed assets 561.5 533.4 5.3% Participations 1,183.0 156.6 655.3% Current tax assets - 148.6-100.0% Deferred tax assets 79.1 173.2-54.3% Other financial assets 280.4 211.9 32.3% Other assets 97.4 108.5-10.3% Total assets 62,870.8 59,302.1 6.0% Deposits from banks 562.3 127.9 339.5% Deposits customers 50,703.8 49,099.2 3.3% Loans from banks and FIs 1,596.8 1,099.9 45.2% Subordinated loan 1,743.9 414.6 320.6% Current tax liabilities 11.0 - Provisions for other risks and charges 306.3 373.1-17.9% Other financial liabilities 1,145.1 1,154.8-0.8% Other liabilities 92.0 62.4 47.4% Total liabilities 56,161.1 52,332.0 7.3% Shareholders equity 6,709.7 6,970.1-3.7% 21
annex III income statement H1 2018 consolidated figures IFRS consolidated, RONmn H1 2018 H1 2017 Net interest income 1,276.5 923.0 38.3% Net fee and commission income 361.9 295.0 22.7% Net trading income 96.4 120.3-19.9% Other net income 381.3 3.6 10393.8% Operating income 2,116.1 1,341.9 57.7% Personnel expenses (477.2) (359.6) 32.7% D&A (83.1) (57.0) 45.7% Other operating expenses (528.5) (260.6) 102.8% Operating expenses (1,088.8) (677.3) 60.8% Cost of risk 87.9 (59.3) Bargaining gain 111.6 - Net income before taxation 1,226.7 605.3 102.6% Income tax (expense) / revenue (362.1) (92.6) 291.0% Net income after taxation 864.6 512.7 68.6% 22
annex IV balance sheet H1 2018 consolidated figures IFRS consolidated, RONmn Jun 2018 Dec 2017 Cash & cash equivalents 8,937.6 6,637.7 34.6% Placements with banks 5,210.6 5,348.1-2.6% Loans to customers, net 37,889.6 30,249.0 25.3% T-bills & securities 21,321.4 16,096.2 32.5% Fixed assets 812.5 766.9 5.9% Current tax assets 0.0 146.9-100.0% Deferred tax assets 126.3 187.1-32.5% Other financial assets 786.4 234.3 235.6% Other assets 220.6 138.8 58.9% Total assets 75,305.0 59,805.0 25.9% Deposits from banks 659.6 127.9 415.6% Deposits from customers 61,482.7 48,932.2 25.6% Loans from banks and FIs 1,939.6 1,487.0 30.4% Subordinated loan 1,747.9 414.6 321.6% Current tax liabilities 96.3 0.0 Provisions for other risks and charges 386.9 382.8 1.1% Other financial liabilities 1,313.3 1,216.2 8.0% Other liabilities 391.8 104.0 276.6% Total liabilities 68,018.1 52,664.9 29.2% Shareholders equity 7,005.0 7,125.4-1.7% Non-controlling interest 281.8 14.7 1818.5% Total liabilities and equity 75,305.0 59,805.0 25.9% 23
Banca Transilvania HQ 8, G. Baritiu Street, Cluj-Napoca 400027, Romania + 40 264 407 150 + 40 264 407 179 /FAX investor.relations@btrl.ro www.bancatransilvania.ro/en/investor-relations www.bancatransilvania.ro www.bt24.ro # facebook.com/bancatransilvania twitter.com/b_transilvania linkedin.com/company/banca-transilvania Clasificare BT: Uz Intern