RAPORT ANALIST February 15, 2017

Banca Transilvani. Good as expected

TLV reported FY net income came to RON 1.3 billion above our forecast of RON 890 million, due to a deferred tax asset related to the Volksbank transaction. Without this one-off, profit came broadly in line.
Net interest income was up both q-o-q (+7.7%) and y-o-y (+17.7%) thanks to higher volumes and higher NIM as well (366 bps vs 353 bps in Q3). Net F&C also went up significantly (+2.9% q-o-q and 9.9% y-o-y) while net trading income declined.
OPEX went up q-o-q but remained below 2015 Q4 level, cost-to-income ratio stood at 43.4% on our calculation, 46.4% ex-VISA.
Risk cost somewhat rebounded from the levels seen in previous quarters. NPL ratio fell to 4.62% (9.84% by EBA definition which uses stricter conditions). Coverage with collaterals stood at 117.5%, however, we need more information on the structure of cash vs. collateral coverage breakdown.
Lending remained sound with net loans up by 2.9% q-o-q. LTD ratio pretty comfortable at 65.3%.