Banca Transilvania - "An EBRD Bank"

In order to emphasize the outstanding role of the central bank (the National Bank of Romania - BNR, in Romania"s case) within the banking system of a country, it is said that one of its role is to act as "the bank of banks." This role is proven by BNR whenever they accept to re-finance a commercial bank through rediscounting, reverse repo or Lombard loans. I am not aware of any cases when BNR actively took part in the increase of the share capital of savings banks in Romania. However, the European Bank for Reconstruction and Development (EBRD) has been for seven years a significant shareholder in Banca Transilvania, although one of their basic principles is not to be a shareholder in another financial institution for more than 4-5 years.

This fact is self-evident as to how much the EBRD appreciates BT. Some of those who know that the EBRD holds 15% in BT since 2001 are wondering why the EBRD did not sell some of the shares before the price reached 0.262 RON, down from as much as 0.5 RON after the latest share capital increase. The reason is quite evident: the confidence in BT"s strategy and potential, which has not been fully revealed yet, as well as the conviction that the current market price is well below what we could call a fair price or the intrinsic value of the shares.

After having carefully monitored the operations and integration of BT in the Romanian business environment, EBRD agreed to sign with BT a cooperation agreement for the implementation of several financing programmes. By this decision - the first one involving a Romanian-based bank - the EBRD acknowledged that some of the Anglo-Saxon mentality had penetrated the structure of BT. Rigor, caution, sobriety, a passion for quality and especially the determination to keeping promises are the values upon which this bank was built and which the current management promotes irrespective of the phase of the business cycle at any given point in time.

Some could say that the statement made in the headline is groundless. Of course, Banca Transilvania belongs to its shareholders. But I believe that it also belongs to those who support it, who help it not just survive, but also grow and gain ground on a highly competitive market. The EBRD is not just a significant shareholder in BT, but has also used BT for multiple financing programmes for small- and medium-sized enterprises and many training programmes on corporate audit. EBRD also chose BT for the first mortgage loan financing programme in Romania, which started in 2003. And when they were convinced of the soundness of BT, the EBRD also recommended BT to other financial institutions that were more development-oriented: the IFC, DEG, FMO, EFSE for subordinated loans. It is also worth noting that IFC used BT for the first foreign currency-denominated, subordinated, convertible bonds.

Of course, these details are not known to all of Banca Transilvania"s customers. Consequently, it was not these details that prompted customers to turn a deaf ear to the rumours spread last summer by the bank"s enemies, saying that the bank was in difficulty. It was also not the very significant market share of the bank (5.2% by assets), or the fact that BT was the second largest financer of small- and medium-sized enterprises in the country. They, as many other genuine specialists, know that there are things in Romania that are strong, enduring and much coveted by foreigners. And the fact that a bank of EBRD"s magnitude adopts a bank in Romania, educates it and grows it is reason enough to be proud, not just for the BT employees, but also for the Bucharest Stock Exchange and for Romania.