RAPORT ANALIST August 18, 2016

Foreclosure provisioning offset by Visa deal gain.

Valuation We update our view on Banca Transilvania with a BUY recommendation and a target price of RON 2.80 per share revealing an upside potential of 18% against last close. We used a two-stage DDM with a 4-year explicitly forecasted period. The 1st stage up to 2020 is explicitly forecasted. In the 2nd stage, we modeled in a gradual ROE transition to 10.4%, the estimated long-term cost of equity, and a long-term growth rate of 2.6%.