Awards for Excellence 2020: Best bank in Romania
A new tax on bank assets and limits on retail lending took some of the shine off the Romanian banking market last year and mitigated the positive impact of GDP growth of 4.1%. Two of the leading players – Erste subsidiary BCR and Raiffeisen Bank – were also hit by legal judgements against their local building society arms.
Nevertheless, growth and profitability remained robust across the sector thanks to rising interest rates, tight labour market conditions and expansionary fiscal policy ahead of elections last autumn.
Picking a winner in a market with so many strong performers was difficult, but under CEO Omer Tetik, Banca Transilvania’s solid fundamentals, consistent profitability and balanced growth earn it the title of Romania’s best bank.
The market leader, which is still headquartered in the Transilvanian capital Cluj-Napoca, boosted its bottom line result by 32.9% last year to L1.6 billion ($375 million), equating to a return on equity of 20.3%. Overall lending growth of 6% was below the sector average, but an 11% increase in the SME loan portfolio confirmed Banca Transilvania’s commitment to supporting its core client base and contributed to a 7.8% rise in net interest income.
Micro and mid-sized corporates were also the main drivers of a 14.6% increase in the number of active clients in 2019. Meanwhile a focus on cross-selling and a 44% rise in card transactions helped boost net fee and commission income by 4.8%; and continued investment in technology was reflected in a 40% increase in take-up of mobile banking.
Asset quality also improved as a result of substantial bad debt write-offs, with the NPL ratio falling to 2.8% by the end of December, while overall capital adequacy remained healthy at 21.3%.