Equity investment in Banca Transilvania (“BT”) through subscription of newly issued shares as part of the capital increases that will take place in 2007-2009. Such investment will allow the Bank to retain its 14.98% stake in BT.
BT’s capital increases will further support the bank’s growth in the Romanian banking sector. The strategy of BT will remain to consolidate its market position by developing new products and continuing to expand its branch network, as well as consolidating their financial group. BT is particularly strong in the SME and retail sectors.
EBRD’s original equity investment in BT has been instrumental in supporting the development and strengthening of a locally-owned bank, as well as promoting improvements in its corporate governance. Such objectives have so far been achieved with EBRD’s role in BT being particularly important in promoting higher corporate governance standards, in strengthening the bank’s management and in supporting the ambitious strategy that is currently being implemented.
The proposed participation in BT’s capital increase reinforces the objectives of the original equity investment by providing the necessary means for the bank to continue expanding its operations while strengthening its ability to face increasing competition. The ultimate goal is for BT to further develop into a more modern and efficient institution, which will contribute to the competitiveness of Romania’s banking sector and to the increase in availability of funding to local companies.
BT is a medium-size commercial bank registered and operating under Romanian law. As of end-2006, it had 4.6% market share of total banking assets, total balance sheet of EUR 2.5 billion, equity of EUR 233 million and a net profit of EUR 32.1 million.
to be confirmed
to be confirmed
BT will continue to comply with EBRD's Environmental Procedures for Intermediated Financing through Local Banks, including adherence to the Environmental Exclusion and Referral List, compliance with the applicable national environmental, health and safety and public consultation requirements, and submission of annual environmental reports to the EBRD.
None for this transaction. BT benefited from Technical Cooperation under the EU/EBRD SME Facility to finance the consultancy services of Shorebank Advisory Services from January 2000 to April 2003.
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