Bank of Cyprus acquires stake in Romanian Banca Transilvania

Bank of Cyprus announced that it has acquired 102.862.785 shares representing a 9.7% interest in Banca Transilvania’s share capital with a total acquisition cost of EUR58 mln. The transaction does not have a material impact on the capital adequacy and financial fundamentals of the Bank of Cyprus Group. Bank of Cyprus proceeded with this transaction solely for investment purposes with the consideration paid representing approximately a multiple of 1.5 times price to shareholder’s equity.
The acquisition offers Bank of Cyprus the opportunity to invest at an attractive valuation in the share capital of a leading Romanian bank and to gain further insights and experience into the Romanian banking market.
Banca Transilvania is the largest Romanian bank with domestic private ownership, operating through a strong branch network of 532 units and enjoying an 8.5% market share in total deposits.
As at 30 September 2009 Banca Transilvania had total assets of RON 18,2 bln (EUR4,3 bln), deposits and gross loans of RON 14,2 bln (EUR3,4 bln) and RON 11,7 bln (EUR2,8 bln) respectively, and shareholders’ equity of RON 1,7 bln (EUR402 mln). Banca Transilvania is well capitalised and very liquid, with a capital adequacy ratio and a loans to deposits ratio at 30 September 2009 of 13.5% and 84% respectively. Banca Transilvania is listed on the Bucharest Stock Exchange and the European Bank of Reconstruction and Development (EBRD) is its largest shareholder, participating in its capital since 2001, with a 15% interest.
The above mentioned investment does not affect the Bank of Cyprus Group’s strategy in Romania, which is to be an efficient organisation in the retail banking sector and with a particular focus in the SME sector. The Group currently operates through 11 branches in Romania. At 30 September 2009, the Group’s total loans and customer deposits in Romania amounted to EUR585 mln and EUR113 mln, respectively.