1

Sustained growth

in a challenging environment

Why not securitization?

EFSE Annual Meeting 2007 Budva, Montenegro

2

Topics

Romania� Macro picture

� Banking system

Banca Transilvania� Strategy and organization

� Key developments during 2006

� Why not thinking about securitization?

3

Romania

� Macro picture

� Banking system

4

Romania macro picture

Inflation rate

27 25 22 14 9 7,5 5 4 3,8

17,8

14,1

40,7

30,3

9,3 8,64,87

0

5

10

15

20

25

30

35

40

45

2000 2001 2002 2003 2004 2005 2006 2007* 2008*

target actual

2,1

5,75,1 5,2

8,4

4,1

7,7

5,4

2000 2001 2002 2003 2004 2005 2006 2007 e

Real GDP

FOREIGN INVESTMENTS IN ROMANIA

(billion EUR)

1,14

1,29

1,12

1,62

3,3

5,2

9

7

0 1 2 3 4 5 6 7 8 9 10

2000

2001

2002

2003

2004

2005

2006

2007*

5

Banking Sector in Romania

Weight of non-governmental loans in GDP (%)

17.5%22%

27%

88%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2004 2005 2006* UE

Market shares in the banking system/Total Assets (%)

87.9%

5.3% 6.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Banks with foreign

capital

Banks with local state

capital

Banks with local private

capital

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Banking Sector in Romania

Features:

� 37 banks (of which 6 foreign bank branches)

� 61% of banking assets held by top five banks

�Solvency ratio: 17.9%

Evolution of banking assets in Romania (bn. EUR)

15.31

22.67

37.70

51

0

10

20

30

40

50

60

2003 2004 2005 2006

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Market shares - total assets 31.12.2006 vs 31.12.2005

4,1%4,5%3,10%

4,2%4,2%

4,7%5,1%

8,0%

16,3%

26,2%

3,70%

5,30%4,40%4,50%3,80%

25,70%

15%

8,70%7,40%

3,90%

0%

5%

10%

15%

20%

25%

30%

BCR BRD Raiffeisen HVB-T iriac T ransilvania Alpha BancPost CEC ING ABN Amro

31.12.2006

31.12.2005

Banking Sector in Romania

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Banca Transilvania

� Strategy and organization

� Key developments during 2006

� Why not thinking about securitization?

� Refinancing: own behalf & our clients

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Banca Transilvania: group strategy

� Establishment and consolidation of Banca Transilvania Financial Group, the bank being the core business and synergies driver

� Cross-selling with subsidiaries:BT Asigurări (insurance)BT Leasing Transilvania (leasing)BT Securities (brokerage)BT Direct (consumer finance)BT Investments (investment vehicle)BT Asset Management S.A.I.Compania de Factoring

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Nationwide network, closer to clients

- In 2003 the bank started an ambitious expansion program

- In 2006, 125 new units have been opened and the plan continues for 2007 for other 80 new units

Current network: 365 units

5,000 employees

HEAD OFFICE

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Key developments - 2006

Regional network consolidation: 341 units

Increase of market share / total assets: 4.7% / EUR 2.4 billion

Strategy continuance implemented at each business line level: - retail, SME and corporate

Strengthening the bank’s capital base: more than EUR 62 million-tier 1 and EUR 60 million-tier 2

Developing Banca Transilvania Financial Group via capital investments and opening of new subsidiaries

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Achievements on business lines

RETAIL SME CORPORATE

Around 620,000 active clients

Strong market sharesin strategic products• 7.25% in mortgages

Cards business• 9.88% market share • 894,000 cards• 475 ATMs, 3,800 POS

Internet Banking: 23,000 users

Over 78,000 active clients=> 15% market share

Increased revenues

Professional sales force

Dedicated SME financing programs and products

Romanian Entrepreneurs club (7,500 members)

Over 8,000 active clients

Monthly turnovers of over 1 EUR billion

through BT accounts

Cash managementtrade finance, treasury

products

Performing Electronic Banking

platform

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Retail

Retail loans in total loans: 43%

– Mortgage loans/Total Retail Loans: 61.38%

– Consumer loans/Total Retail Loans: 27.28%

– Card Loans /Total Retail Loans: 11.34%

• via debit cards: 8.35%

• via credit cards: 2.99%

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SME & Corporate

• SME loans in total loans: 14%

• 9 dedicated SME products: loans, Club, subscription

• Corporate loans in total loans: 43%

• The Business Account

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Decembrie 2005 Decembrie 2006

403

621

Decembrie 2005 Decembrie 2006

105

215

Loans (EUR Mio.)

Staff increase

+170 (94%) +31 (15%)

105% 54%

SME Corporate

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Market share SME/corporate clients

BCR 34%

BT 16%

BRD 14%

Raiffeisen 12%

Banc Post 10%

Altele8%

2%

1%

3%

3%

HVB

łiriac

2%

Alpha Bank

2%

Finansbank

2%

ProCredit

2%

BCR 36%

BT 10%

BRD 16%

Raiffeisen 11%

Altele16%

HVB łiriac

5%

Alpha Bank

2%

Unicredit

2%

Banc

Post 2%

SME Corporate

Share increase

Share decrease

Comparative analysis against

December 2005

31%

of Corporate clients

BT =

Main bank / Secondary

5%

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�Why not thinking about securitization?

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a. True sale?

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150%

What plans have Romanian banks for 2007?

BCR: from 25% to 30%

BRD: from 16% to 20%

Raiffeisen: from 8% to 11%

HVB-Tiriac: from 5% to 8%

etc

TOTAL MARKET SHARE: 150%

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Fight for additional market share will diminish the chances for a “true sale” securitization

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b. Credit risk?

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BT - Romanian bank Romanian risk

Strategy: to accept Romanian risk

SMEs

Micro companies

Retail (consumer + mortgage)

Capital requirements: lowering to 8%

No strategic interest for BT to initiate a

securitization

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c. Cost of funding?

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Initial costs for the first deal: significant

Profile of loan portfolio: higher risk = higher margins

Currency structure of loan portfolio

Funding costs: (relatively) lower after EU accession

Insufficient cost reduction

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d. Asset – liability management?

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Under banked country

- easy to grow the deposit base

Growth in RON

Syndication market: barely touched

Bonds: not yet

Other financing opportunities

to be experienced first

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Why not securitization?Conclusions

Market share growth strategy

Acceptable credit risk profile of our portfolio

Insufficient cost reduction incentives

Balanced assets and liabilities growth

Other financing structures to be experienced first

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Thank you!

Banca Transilvania S.A.

8, Baritiu St., 400027 Cluj-Napoca, Romania

Ph: + 40 264 407 150

Fax: + 40 264 407 179

E-mail: bancatransilvania@bancatransilvania.ro