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© Banca Transilvania SA |
TLV 2Q 2007 results (positive)
- outstanding top and bottom line growth, improved core profitability
Banca Transilvania (TLV) has published its 2Q 2007 unconsolidated financial statements under the Romanian Accounting Standards (RAS). We remind that our valuation of TLV is based on consolidated IFRS projections.
The fast pace of network expansion combined with the focus on SMEs had a positive impact on both balance sheet and P&L. The bank beat our expectations regarding net profit. TLV operated 385 outlets as of end-June 2007, 340 as of end-2006 and 276 as of end-June2006. The number of its active clients rose by 29% yoy to 898 ts, accordingly.
Balance sheet
Net loans growth accelerated during 2Q 07, surging 58% yoy and a strong 30 % YTD. Our FY 07 assumption for the consolidated loan book increase was 55%. In line with the general trend, securities portfolio recorded a double digits increase.
Deposits increased faster than loans (69% yoy and 23% YTD, respectively), since, unlike foreign owned banks, TLV don’t have easy access to cheaper financing sources. As a result of the last share capital increase, the bank’s equity soared 67% yoy.
Profit and loss
Top line growth was driven by both net interest income (NII) and non-interest income. TLV surprised by reversing the declining trend of net interest margin (NIM) which has been stretching for almost two years. NIM for 2Q 07 posted a remarkable increase of 59% yoy (to RON 89 mn) versus our estimated growth of 36% yoy.
Non-interest income came in 78% higher than a year ago amounting to RON 118 mn, versus our forecast of RON 102 mn. It was boosted by an almost 5x yoy rise of net trading gains. Net fees were up 62% yoy.
Non-interest expenses were RON 134 mn, up 53% yoy, against our expectation of RON 123 mn. The best piece of news brought by the 2Q 07 results was the faster growth of revenues compared to expenses and consequently a welcomed profitability improvement (cost/income ratio decreased to 65% from 69% for the previous quarter).
The net profit rose to RON 48 mn, up 54% yoy, exceeding our expectations of RON 35 mn.
TLV 2Q 2007
| in RON mn | 2Q 07 | 2Q 06 | yoy | 2Q 07e RCI | 1Q 07 | qoq |
| Net interest income | 89 | 56 | 59% | 76 | 76 | 18% |
| Risk provisions | 17 | 2 | 593% | 14 | 15 | 9% |
| Non-interest income | 118 | 66 | 79% | 102 | 92 | 28% |
| Net commission income | 78 | 48 | 62% | 72 | 64 | 22% |
| Net trading result | 36 | 6 | 495% | 19 | 19 | 88% |
| Non-interest expenses | 134 | 87 | 53% | 123 | 116 | 15% |
| Profit before taxes | 57 | 33 | 75% | 41 | 36 | 57% |
| Net profit | 48 | 31 | 54% | 35 | 31 | 55% |
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Copyright: 2007 Raiffeisen Capital & Investment SA. All rights reserved. For further Information please contact Raiffeisen Capital & Investment SA, 15, Charles de Gaulle Square, 4th Floor, Bucharest 011857, Romania, Authorized by CNVM decision 3083/09.09.2003
Tel. +40 21 306 12 33, fax: +40 21 230 06 84, e-mail: office.rci@rzb.ro, web site: http://www.rciro.ro
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