Banca Transilvania wants to be listed on the Vienna Stock Exchange

• Horia Ciorcilă: The listing on the Vienna Stock Exchange will increase the visibility of the bank

• Ioan Cuzman, the chairman of SIF1: "We will need to examine whether this share capital increase is opportune right now"

The Board of Administration of Banca Transilvania proposes increasing the share capital 391.58 million lei and floating the bank on the Vienna Stock Exchange, according to the agenda of the General Shareholders" Meeting of April 28th.

Horia Ciorcilă, the chairman of the Board of Directors of the bank, said, for BURSA, that listing the bank on a foreign stock exchange will make it more attractive and will help increase liquidity for the shares of the bank. The managers of the bank has initiated a series of preliminary discussions with several foreign brokerages to in order to float the company on the Vienna stock exchange, but said they will wait for the verdict of shareholders at the General Shareholder meeting at the end of April to speed up the process.

"If the shareholders approve the floating on the Vienna Stock Exchange, it will be just a matter of months before the listing completes. The process is very simple, it would basically be a dual listing", said for BURSA, Horia Ciorcilă, the chairman of BT, who added: "The listing on the Vienna Stock Exchange will bring more visibility to the bank and will make it more attractive to foreign investors who prefer to trade there due to lower fees".

Even though last year there were rumors going about that a group of the bank"s shareholders might sell their stakes, the chairman of the bank says that the listing of the bank on a foreign stock exchange does not involve any intention to sell it. Besides, for now there is no intention to change the 10% cap on the volume of shares that a shareholder can own, which is included in the bank"s articles of incorporation.

"We haven"t received any request from shareholders to change the 10% threshold so far", Horia Ciorcilă said.

• A share capital increase of 100 million Euros to consolidate the bank"s position on the market

The management of TLV has proposed a share capital increase of 391.58 million lei, by incorporating reserves of 173.9 million lei, share premiums of 97.68 million lei and by raising 120 million lei from shareholders. In turn the bank will issue 391,584,470 new shares at a price of 1 leu/share. By comparison, the market price for shares of TLV was 2.39 lei yesterday.

The reason behind the decision to increase the bank"s share capital is its need to consolidate its market position in a difficult economic environment, said Horia Ciorcilă.

"The money raised from the capital increase will be used to consolidate the market position of the bank. it is a precautionary measure, we want to be prepared to handle a year that will most likely be very difficult", the chairman of the bank said.

Based on yesterday"s closing price, "Banca Transilvania" has a market capitalization of 2.59 billion lei.

At the end of 2009, Bank of Cyprus acquired 9.7% of the shares of TLV by several transactions on the Deal market. The largest shareholder of BT is the European Bank for Reconstruction and Development (EBRD), which holds 15%. The EBRD is in fact the only shareholder that the management of Banca Transilvania has discussed the share capital increase with so far.

"The only shareholder we discussed the plan to do a share capital increase with the EBRD and we got positive signals", said Horia Ciorcilă.

Ioan Cuzman, the chairman of SIF "Banat-Crişana", one of the founding members of the bank, said for BURSA, that he will need time to decide whether the time is right for a share capital increase.

"The listing of the bank in Vienna is a good idea, it"s a quite an achievement to be listed there, but on the subject of the share capital increase, we will need to decide whether it is opportune now", the chairman of SIF1 said. He stressed that SIF1 would have no problem participating in an eventual share capital increase. In 2009, "Banca Transilvania" reported a share capital increase of 61.93 million lei, after being forced to set aside almost 524 million lei in loan provisions. For comparison, in 2008 the bank had a net profit of 398.23 million lei, and 340.47 million lei in 2007.

Last year, Banca Transilvania had a gross operating profit before provisions of 610 million lei, up 96% over 2008. At the same time, loan provisions increased 225%, to 755 million lei.