Banca Transilvania posted 236.35bn ROL gross profit in the first half this year, down 6.6% in nominal terms compared with the same time in 2002. The actual decline - that is if considering the inflation, as well, is much higher, of over 20%. However, the bank management says this decline is on schedule, as investments and market share come before profit this year. "Revenues went up 14% in the first six months, but spending was even faster to progress - 22%. And this is because we said we had an investment programme endorsed by our shareholders, in spite of the risk of lower profits, right from the beginning," president Robert Rekkers said.
The bank's shareholders approved a 7.5 million euro investment plan for this year, with most of the money directed to the branch network, products and IT.
Banca Transilvania's assets totalled 9,893bn ROL at the end of June, 48% more than in H1, 2002. The highest growth was registered by credits, as the bank lent 5,441bn ROL's worth, over 75% more than in the same time last year.
Banca Transilvania opened nine branches in the first six months of the year, and is planning to open ten more by the end of 2003.
It is listed on the first tier of the Bucharest Stock Exchange and was last trading for 3,500 ROL. The publication of the results was a little surprising to brokers. "The profit decline took me by surprise somehow. Even though everybody had known a profit cut was accepted since the beginning of the year, I just thought that given the reaction of the market upon the release of Banca Romana pentru Dezvoltare (Romanian Development Bank - BRD) three-month results (i.e. a 2% quote drop), the management of Banca Transilvania would not take such a risk," Valentin Ionescu, Euro Invest Vision head of operations commented.
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