HORIA CIORCILĂ, BANCA TRANSILVANIA: "We are at an advanced stage of the talks for the selection of the new CEO"

Reporter: What business model will Banca Transilvania focus on this year?

Horia Ciorcilă: Over the last two years, the bank has focused on a healthy growth. It is a winning model, which is why we will stick with it. We have the benefit of being a Romanian bank, with an entrepreneurial spirit. We know the market very well and we quickly identify the local opportunities. We have a mission which is not easy at all, but one in which I very heavily believe, to support the domestic economy and entrepreneurs.

We are looking for the loan portfolio to be as healthy as possible, to have a context adequate risk management and an increased risk control.

Reporter: What market share do you plan to reach this year?

Horia Ciorcilă: We have reached a market share of 7.27%, and the total assets put us on the third position among the top three banks in Romania. As a result, the main goal is the consolidation of the market.

We have grown beautifully and healthily, including in the first quarter of this year, as the net profit of Banca Transilvania, was 73% higher over the similar period of 2011, to almost 92 million lei. Basically, according to the earnings for the first three months, announced so far by the banks in the system, Banca Transilvania is the most profitable Top 3 Bank and the only one to see an increase in assets, which reached almost 27 billion lei.

Reporter: Do you have a short-list for the position of CEO of the bank?

Horia Ciorcilă: We are at an advanced stage of the talks for the selection of the new CEO. The latter will have to be a person compatible with the philosophy, the vision and the strategy of our bank.

Reporter: When do you intend to launch the bonds issue?

Horia Ciorcilă: The first step in this direction has already been made: we have received the approval of our shareholders for this proposal, in the General Shareholder Meeting we had at the end of April. The bonds will be issued this summer, once we get all the approvals from the authorities. The plan is to issue subordinated bonds worth a total of 30 million Euros, to bolster the bank's capital base. Bondholders will have two options - to convert them into stock - depending on a preestablished algorithm - or to keep them until maturity.

Reporter: Considering the very good results obtained by the bank in the first quarter, do you intend to expand your territorial network?

Horia Ciorcilă: Our territorial network has reached the optimum size compared to the 1.5 million customers that we have. Basically, through the 560 territorial units which the network of Banca Transilvania comprises, we are present in all of the important points of the country, from major economic centers to smaller towns. We have a "mature" infrastructure, which we want to make increasingly efficient.

In the second half of this year we are considering the relocation and the modernization of two of our branches which have very good results, Constanţa and Bacău. Also, in Cluj-Napoca we will have a new headquarters, "Data Center", where a part of our team of Cluj will be working. These are the plans when it comes to our territorial network in 2012.

Reporter: Did you do any restructuring at Banca Transilvania? How many employees does BT currently have?

Horia Ciorcilă: Banca Transilvania has always avoided restructuring, focusing on reorganization and redistribution of resources where needed. We currently have over 6,000 employees, 5% more than in 2010, meaning that we have continued to bring in people even in 2011. We are looking at improving the efficiency of the potential that the people on our team have to the maximum.

Reporter: What customer segments is Banca Transilvania focusing its lending on?

Horia Ciorcilă: Because Banca Transilvania is the bank of entrepreneurs, we are especially considering SMEs, but as well as major companies and individuals. This year, we will pay more attention to agriculture and European grants, as well as to the customers in the medical segment, for which we have a a dedicated business model.

Reporter: How do you estimate that mortgage and consumer loans will evolve this year?

Horia Ciorcilă: The market shows a low appetite from the population when it comes to lending, at least for the moment. In spite of all this, I am happy to say that at Banca Transilvania we have succeeded in increasing the loan placements in retail by 5% in 2011 to over 5,600 million lei. Rising faster than the market, we have a good start in 2012. For this year we have proposed to increase the level of lending by 8% among individuals, but we are intent on keeping the balance between mortgage-backed loans and consumer loans.

Reporter: Did the EBRD and the IFC, shareholders of Banca Transilvania, reaffirm their commitment to the bank? Do you have any signs that they are looking to increase their stake or to sell?

Horia Ciorcilă: Both the EBRD and the IFC, which are among our significant shareholders, still support the strategy of the bank and there are no signals from them that they would like to sell their stakes.

Reporter: Would it have been opportune for Banca Transilvania if it had been listed on foreign stock exchanges?

Horia Ciorcilă: The benefits of having Banca Transilvania listed on the foreign stock exchanges are at the moment limited. Our timing for a potential capital raise - because that would be the main justification for a secondary listing, aside from the one we have on the Bucharest Stock Exchange - would not be the best, for at least two reasons. First of all, Banca Transilvania is well capitalized for its current level of activity. Second of all, we expect our internal capital generation - through its profitability - to be enough to sustain the growth of the business. Furthermore, the price at which a stock issue would be done would be rather small, as the financial sector is generally undervalued by the market. We have pondered everything, including the collateral benefits generated by such a listing of the bank, but they are also low.