Banca Transilvania (TLV) Q4 2023 earnings summary

Executive summary

• Consolidated net income rose 19.9% YoY to RON 2,984.5mn in FY 2023; operating income increased 23.3% to RON 7,742.7mn.

• Growth was driven by corporate and retail lending, higher operating activity and customer acquisition; active customers reached 4.2mn, including 623,000 added during the year.

• Assets doubled over five years to RON 169.2bn, while loans and deposits doubled and the active customer base rose nearly 50%.

Financial highlights

• Consolidated net interest income rose 17.8% YoY to RON 5,213.6mn and net fee and commission income increased 10.0% to RON 1,284.3mn.

• Consolidated pre-provision operating profit rose 28.0% to RON 4,219.1mn; operating profit reached RON 3,501.7mn, up 29.8% YoY.

• Stand-alone net profit rose 14.4% to RON 2,490.6mn; net interest income increased 18.1% to RON 4,319.2mn and fee income 10.8% to RON 1,106.0mn.

• Operating expenses increased 18.1% to RON 3,523.6mn; the cost/income ratio was 45.6%.

• Consolidated net trading income declined 4.2% to RON 657.0mn; other net income was RON 587.8mn versus a loss of RON 0.6mn in FY 2022.

Outlook and guidance

• FY 2024 guidance: net loans +7%, deposits +9%, net interest income +18%, net fee and commission income +12%, ROE 22% and capital adequacy ratio 27%.

• Growth plans target expansion across existing business segments and entry into new ones, supported by profitability, financial inclusion and continued support for the economy.

• PNRR-related lending projects are expected to peak from 2024 onward; the 2023–2025 green loan production target is RON 3,500mn.