BT to sell off its non-banking core business

This year, Banca Transilvania (BT), the largest bank with private Romanian capital, intends to sell off stock it owns in companies that are not part of its core banking business, such as Compania de Factoring, Medicredit Leasing, and one other company which BT's President, Horia Ciorcila, did not wish to name.

The bank, lacking the support of a mother banking group, but with the European Bank of Reconstruction and Development (EBRD) as its most important shareholder, is focusing on cutting costs and closing branches in spite of an aggressive expansion policy in Romania and Moldova previously announced. The possible sale of the bank, mentioned quite frequently in the mass-media in recent years, does not seem to be a shareholders goal at this time, although a decision is expected this year regarding a €50 million capital increase, which EBRD should participate in, because it owns 14.51 percent of the lender's capital. "We will maintain the scenario which includes the plan to carry on with EBRD and IFC [International Financial Corporation].

This is the solution that gives us the greatest assurance in terms of the bank's future. We are examining every opportunity and will continue our policy of selling off stock of companies that are not part of the core banking business, provided we obtain a good price," according to an explanation for Business Standard of the bank's strategy by Ciorcila, who is also the lender's most important individual shareholder. After selling the BT Asigurari insurer in 2007, and its 25 percent share in the Asiban insurer in 2008, both to the French Groupama insurance company, the first deal on the 2009 list is in the private pension segment. Aegon decided to acquire the 50 percent share of BT Aegon belonging to Banca Transilvania, for which it is to pay €11 million. BT also owns 50 percent of one of the country's most important factoring company, Compania de Factoring.

Business Standard