Banca Transilvania S A : Quarterly report according to the financial supervisory authority regulation 31.03.2024

SWIFT: BTRLRO22

C. U. I. RO 50 22 670

R.B. - P.J.R. - 12 - 019 - 18.02.1999

No. Înreg. Reg. Com.: J12 / 4155 / 1993

CONSOLIDATED DIRECTORS'

REPORT

for the three-month period ended

31 March 2024

In compliance with the Financial Supervision

Authority's Regulation no. 5/2018

Identification Details of the Issuer

Report date: May 10th, 2024

Name of the company: BANCA TRANSILVANIA S.A.

Registered office: 30-36 Dorobanților street, Cluj-Napoca, Cluj County, postal code 400117

Phone/fax: [phone]

Tax identification no: RO 5022670

Trade Register no: J12/4155/16.12.1993

Registered capital, subscribed and paid: RON 7,986,582,330

The regulated market where the issued securities are traded:

The company's shares are listed on the Bucharest Stock Exchange (symbol: TLV)

Main features of the securities issued by the company: 798,658,233 nominal shares with

a par value of RON 10/share.

Banca Transilvania's Financial Group Presentation

Banca Transilvania Group ("the Group" or "BT Group") was established in 2003 with Banca Transilvania ("the Bank" or "BT") as the main subsidiary. Besides Banca Transilvania, BT Group has the following subsidiaries: Victoriabank S.A., Salt Bank S.A., BCR Chişinău S.A., BT Capital Partners S.A., BT Leasing Transilvania IFN S.A., Idea Leasing IFN S.A., BT Investments S.R.L., BT (Idea) Broker de Asigurare S.R.L., BT Direct IFN S.A., BT Building S.R.L., BT Asset Management SAI S.A., BT Solution Asistent în Brokeraj S.R.L., BT Asiom Agent de Asigurare S.R.L., BT Safe Agent de Asigurare S.R.L., BT Intermedieri Agent de Asigurare S.R.L., BT Leasing Moldova(MD) S.R.L., BT Microfinanțare IFN S.A., VB Investment Holding B.V., Improvement Credit Collection S.R.L., BT Pensii S.A., BTP One S.R.L., BTP Retail S.R.L and Code Crafters by BT S.R.L.

The main Group's fields of activity are: banking through Banca Transilvania S.A., Victoriabank S.A., BCR Chişinău S.A and Salt Bank S.A., leasing and consumer finance mainly through BT Leasing Transilvania IFN S.A., Idea Leasing IFN S.A., BT Direct IFN S.A., BT Microfinanţare IFN S.A. and BT Leasing MD S.R.L., asset management through BT Asset Management S.A.I S.A., brokerage and investments through BT Capital Partners S.A. and pension funds management through BT Pensii S.A. Moreover, the Bank controls two investment funds that are also included in the consolidation and is associated in Sinteza S.A. with a holding percentage of 31.09%.

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Banca Transilvania is a public listed company founded in 1993, headquartered in Cluj-Napoca, with majority romanian shareholders - 76.95% as of the end of March 2024. Currently, BT occupies the first place in the top of the banking system in Romania, by total assets.

The Bank's shareholding structure is constantly changing due to the fact that Banca Transilvania's shares are traded on the securities market, in compliance with the provisions of Law 52/1994 and the Norms of A.S.F. (Financial Supervisory Authority). Currently, Banca Transilvania's shares are listed on the Bucharest Stock Exchange, Category I.

The structure of Banca Transilvania S.A. shareholders as at March 31, 2024 is presented in the Appendix to this document.

1. Significant Events During the Period January-March 2024

Amendments brought to the Articles of Association

There have been no changes.

Main Transactions Regarding Affiliates

In the first quarter of 2024, there were no transactions with the Bank's affiliated parties which could influence substantially the financial position of the Group.

Changes in the first quarter of 2024 regarding Banca Transilvania Financial Group

At the level of the Group's subsidiaries, the following changes occurred:

BT ASSET MANAGEMENT SAI S.A.

• On 02.02.2024, the General Meeting of Shareholders ("GMS") decidated to grant a new mandate of administrator with a duration of 4 years, starting with 08.04.2024 and until 07.04.2028, to Mrs. Runcan Luminiţa Delia and the appointment of Mr. Nistor Ioan Alin as administrator in place of Mr. Bernát Aurel, for a 4 years mandate, starting with 08.04.2024 and until 07.04.2028.

BT MICROFINANTARE IFN S.A.

• On 16.02.2024, the extention of the mandate for two of the company's managers was registered at the Trade Registry Office, as follows:
  - Alexandru Valentina - Deputy General Director, extension of the mandate by 4 years, until 09.03.2028;

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• Ene Marian - Deputy General Director, extension of the mandate by 4 years, until 09.03.2028.

IDEA BROKER DE ASIGURARE S.R.L.

• On 31.01.2024, the change of the company name to BT Broker de Asigurare SRL was registered at the Trade Registry Office according to the Sole Associate Decision no. 3/22.11.2023 and the Decision of the Financial Supervisory Authority no. 57/22.01.2024.

IDEA LEASING IFN S.A.

• On 29.03.2024, the change of the company name to Avant Leasing IFN S.A. was registered at the Trade Registry Office according to GMS Decision no. 1/20.03.2024.

SALT BANK S.A.

• On 11.03.2024 the mandate of Mr. Constantin Daniel Popescu, Deputy General Director for Technology (CTO), ended;
• On 19.03.2024, started the 4 years administrator mandate of Mrs. Gabriela Cristina Nistor and Mr. Ivo Alexandrov Gueroguiev took over the role of President of the Board of Directors, replacing Mrs. Mioara Popescu, whose mandate expired in 31.12.2023.

Risk Management

The management of Banca Transilvania S.A. continuously assesses the risks to which the Bank's activity is or may be exposed, which may affect the achievement of its objectives, and takes action on any change in the conditions under which it operates.

The main risks and uncertainties identified for the next period are a result of the consequences of the global economic slowdown and the volatility of international markets, and the geopolitical context of geopolitical conflicts, which is still ongoing:

• risks of lower economic growth than estimates, Romania's economy being closely linked to global markets, especially the countries of the European Union and still high inflation, aggravated by the conflict and tensions existing at the level of the region and the associated sanctions;
• deterioration of internal macroeconomic balances, including as a result of international geopolitical developments and market volatility, as well as uncertainties regarding the future conduct of tax and revenue policy;

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• the increase in financing costs, generated by more restrictive monetary policies and the increase in public debt;
• the increase in consumer prices, coupled with the depreciation of the national currency against the Euro, compared to current levels;
• delays in the absorption of European funds, in particular through the National Recovery and Resilience Plan, could have possible negative effects;
• Increasing exposure to cyber risks in the context of accelerating the digitalization of processes and the interconnectivity of financial infrastructures.

1. Detailed Information

1. Financial Statements

1.1.a. Financial Results Summary

			Group				Bank
Indicators			Mar' 24		Mar' 23			Mar' 24			Mar' 23
ROE (Net profit/average equity)			39.71%		37.22%			32.77%			34.29%
ROA (net profit/annual average of total assets)			2.83%		2.34%			2.22%			1.97%
Cost/income			45.72%		45.54%			45.10%			46.48%
Total net income, RON thousand			2,215,991		1,740,464			1,910,018			1,443,608
Provisions for credit risk, RON thousand			(2,941)		51,784			45,959			40,454
Gross profit, RON thousand			1,308,155		968,294			1,072,628			781,905
Net profit, RON thousand			1,132,407		837,701			913,240			675,902
Basic earnings per share, RON			1.1486		0.8800
Diluted earnings per share, RON			1.1486		0.8800
Other information:
Number of agencies, branches and offices								510			513
No of active employees			12.037		11.326			9.600			9.175

*calculated with an annualized impact of the contribution to the Guarantee Fund of Bank Deposits (FGDB) and the Resolution Fund

Key profitability and financial performance indicators ROE, ROA and Cost/Income were impacted by the registration of the turnover tax.

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1.1.b. Statement of Financial Position at Group and Bank level

The statement of the financial position of the Group and the Bank at the end of March 2024, compared to the end of last year and the end of March 2023, is as follows:

									Group
	Indicators (RONmn)				Mar'24		Dec'23		Mar'23		Mar'24 vs		Mar'24 vs
							Dec'23 %		Mar'23 %
	Cash and current accounts with Central Bank				25,244		24,253		17,859		4.1%		41.4%
	Placements to banks				11,266		12,273		4,351		-8.2%		158.9%
	Treasury financial instruments				56,642		51,775		52,246		9.4%		8.4%
	Loans and advances to customers, net				73,287		72,008		64,973		1.8%		12.8%
	Finance lease receivables				3,770		3,563		2,872		5.8%		31.2%
	Tangible and intangible assets				2,622		2,642		2,297		-0.8%		14.2%
	Other assets				3,154		2,655		3,332		18.8%		-5.4%
	Total assets				175,984		169,169		147,931		4.0%		19.0%
	Deposits from customers				141,197		138,053		126,779		2.3%		11.4%
	Deposits from banks				535		1,035		833		-48.3%		-35.8%
	Loans from banks and other financial institutions				10,179		9,549		4,375		6.6%		132.7%
	Subordinated loans				2,462		2,423		1,775		1.6%		38.7%
	Other liabilities				6,520		4,213		3,285		54.7%		98.5%
	Total liabilities				160,893		155,273		137,048		3.6%		17.4%
	Equity				15,091		13,897		10,883		8.6%		38.7%
	Total liabilities and equity				175,984		169,169		147,931		4.0%		19.0%

			Bank
Indicators (RONmn)	Mar'24	Dec'23	Mar'23	Mar'24 vs	Mar'24 vs
Dec'23 %	Mar'23 %
Cash and current accounts with Central Bank	23,304	22,286	15,458	4.6%	50.8%
Placements to banks	11,358	12,619	5,592	-10.0%	103.1%

Treasury financial instruments			54,580		50,076		49,923		9.0%	9.3%
Loans and advances to customers, net			72,658		71,550		63,457		1.5%	14.5%
Tangible and intangible assets			2,865		2,889		2,526		-0.8%	13.4%
Other assets			2,864		2,365		3,042		21.1%	-5.8%
Total assets			167,629		161,785		139,997		3.6%	19.7%
Deposits from customers			136,977		134,443		122,306		1.9%	12.0%
Deposits from banks			542		1,082		838		-49.9%	-35.3%
Loans from banks and other financial institutions			9,013		8,584		3,162		5.0%	185.0%
Subordinated loans			2,455		2,404		1,746		2.1%	40.6%
Other liabilities			5,862		3,443		2,748		70.3%	113.3%
Total liabilities			154,849		149,956		130,801		3.3%	18.4%
Equity			12,780		11,829		9,196		8.0%	39.0%
Total liabilities and equity			167,629		161,785		139,997		3.6%	19.7%

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The Group's assets reached almost RON 176 billion at the end of the first three months of 2024, increasing by 4% compared to the end of 2023 and by 19% compared to the end of March 2023. At the Bank level, assets increased by 3.6% compared to the end of the previous year and by 19.7% compared to March 2023, reaching RON 167,6 billion.

The evolution of the Group and the Bank assets is summarized as follows:

Loans' portfolio: considering also the receivables from leasing contracts, the credit portfolio at the Group's level at the end of March 2024 was above the level at the end of 2023 (+2%), and up by 13.6% compared to the end of March 2023. At the Bank's level, net loans at the end of March 2024 represent RON 72.7 billion, up by 1.5% compared to the end of the previous year, and 14.5% above the balance of net loans as of March 31, 2023.

Between January and March 2024, over 74,600 new loans were granted, out of which over 68,600 to retail customers.

Provisions' stock: Banca Transilvania recorded at the end of March 2024 a net income from adjustments for financial assets for other risks and credit commitments in the amount of RON 46 million (including recoveries from off-balance sheet loans). The balance of provisions reached the level of RON 4.4 billion at the end of March.

The non-performing loan ratio (NPL ratio) according to the EBA is 2.01% as of March 31, 2024 and the coverage with total provisions of the non-performing loans according to the EBA is 198.23%.

Cash and current accounts with Central Bank together with the placements to banks decreased by 0.7% compared to the end of December 2023 but increased by 64.7% compared to March 31, 2023, at the Bank level and as at March 31, 2024, these represent 21% of the total assets. At Group level, the balances of these elements are maintained at the level of the end of December 2023 and are increasing by 64.4% as compared to March 31, 2023, having a weight of 21% in the Group's total assets.

At the Group level, the cash and current accounts with the Central Bank increased by 4.1% compared to the end of 2023, and by 41.4% compared to the level registered on March 31, 2023, amounting at the end of March 2024 to RON 25,244 million. At the Bank's level, the increase is of 4.6% by comparison with December 2022 and by 50.8% versus March 2023, the final balance as at March 31, 2024 amounting to RON 23,304 million. The most significant element of this asset

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category is the minimum compulsory reserve held with the National Bank of Romania with a weight over 84%.

Placements to banks, at the end of March 2024, show a negative evolution at both Group and Bank level, decreasing by 8.2%, and 10.0% respectively compared to December 31, 2023. Compared to March 31, 2023, this category shows an increase of 158.9% for the Group, while for the Bank the increase is 103.1%. Variations in this category are mostly determined by the volume of sight, collateral and term deposits at credit institutions, but also by the volume of the term deposit at the Central Bank.

Treasury financial instruments include financial assets measured at fair value through other comprehensive income, financial assets mandatorily measured at fair value through profit or loss, financial assets held for trading and measured at fair value through profit or loss, debt instruments measured at amortized cost as well as derivative instruments. Of those listed, the most significant category is the one of financial assets measured at fair value through other comprehensive income with a weight of 73% in the total category of treasury financial instruments, at Bank level and a weight of 71% at Group level. At the same time, they represent almost 24% of total Bank's assets.

The treasury instruments increased by 9.4% compared to December 31, 2023, for the Group and by 9.0% for the Bank, respectively by 8.4% for the Group and 9.3% for the Bank compared to March 31, 2023, reaching RON 56,642 million at Group level, respectively RON 54,580 million at Bank level. The increase in these instruments is directly correlated with the increase of the managed portfolio of government bonds.

Resources from clients: At Group level, the balance of the customers' deposits reached RON 141,197 million on March 31, 2024, increasing by 2.3% compared to the end of the previous year and by 11.4% compared to March 31, 2023. At Bank level, the balance of customers' deposits reached RON 136,977 on March 31, 2024, increasing by 1.9% compared to the end of the previous year and by 12% compared to March 31, 2023.

For both the Group and the Bank, 64% of the total customers' deposits represent savings of the individuals and 36% savings of the legal entities' customers.

The loan-to-depositratio is 56.3% as at the end of March 2024 at Bank level, the gross loans level being of RON 77.1 billion while the customers deposits reached approximately RON 137 billion.

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The equity of Banca Transilvania S.A. as at 31.03.2024 amounts to RON 12,780 million, increasing by 8% compared to the end of 2023 and by 39% compared to the same period last year. The impact on equity is mainly given by the variations in the retained earnings (incorporation of the profit of the period).

The internal process of evaluating the adequacy of the capital to the risks is a component of the administration and management process and decision-making culture of Banca Transilvania, which aims to enable management to ensure the identification, measurement, aggregation and adequate monitoring of the institution's risks credit, holding an internal capital adequate to the risk profile and the use and development of solid risk management systems.

The Group and the Bank comply with Regulations in terms of Own Funds and Solvency, the level of the capital risk adequacy indicator far exceeding the minimum limits imposed by the legislation. On March 31, 2024 and December 31, 2023, respectively, the Group and the Bank met all regulatory requirements regarding own funds.

							Group												Bank
												Mar'24 vs											∆ Mar'24
	Indicators			Mar-24			Dec-23								Mar-24				Dec-23				vs
									Dec'23 %
																						Dec'23 %
	Tier 1 basic own funds ratio			16.64%			18.29%				-9.0%			16.59%			18.32%			-1.7%
	Tier 1 own funds ratio			16.64%			18.29%				-9.0%			16.59%			18.32%			-1.7%
	Solvency indicator			19.74%			21.55%				-8.4%			20.06%			21.97%			-1.9%
							Group												Bank
																								∆
												Mar'24 vs											Mar'24
	Indicators (RONmn)			Mar-24			Dec-23						Mar-24			Dec-23			vs
								Dec'23 %
																						Dec'23
																								%
	Tier 1 basic own funds			12,034		12,692			-5.2%			10,718			11,363			-5.7%
	Tier 2 own funds			2,242		2,262			-0.9%			2,241			2,260			-0.8%
	Total own funds			14,276		14,954			-4.5%			12,959			13,624			-4.9%

Note: The calculation of the Group's and the Bank's own funds considers the statutory profit of the Group, respectively of the Bank for the financial period ended on December 31, 2023. For the three-month period ended March 31, 2024, the current profit was not considered in the calculation of own funds. Regulatory capital as at March 31, 2024 and December 31, 2023 was calculated according to the IFRS standards endorsed by the European Union.

Solvency: The Bank's solvency calculated as at March 31, 2024 is 21.47% (20.06% without the profit of the first three months of 2024 included), being at a comfortable level, above the minimum reference threshold of 8%, value imposed by the Regulation (EU) no. 575/2013 on prudential requirements for credit institutions, which apply starting with 2014.

Banca Transilvania S.A. financial data confirms that the Bank has an adequate capitalization and a comfortable level of liquidity.

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1.1.c. Profit and Loss Account

The main elements of the Profit and Loss Account at Group and Bank level for the first three months of 2024, compared to the same period last year, are as follows:

					Group					Bank
	Indicators (RONmn)		Mar'23		Mar'22		Mar'23 vs		Mar'23		Mar'22		Mar'23 vs
				Mar'22 %				Mar'22 %
	Net interest income		1,543		1,242		24.2%		1,325		1,031		28.4%
	Net fees and commissions income		338		288		17.3%		296		251		18.0%
	Net trading income		191		135		41.1%		157		123		27.8%
	Net gain / loss (-) from financial assets measured at
	fair value through other items of comprehensive		62		67		-7.4%		61		67		-9.2%
	income
	Net gain / loss (-) from financial assets which are
	required to be measured at fair value through profit		44		24		88.2%		60		18		236.9%
	and loss
	Contribution to the Bank Deposit Guarantee Fund		(71)		(92)		-22.4%		(65)		(89)		-27.6%
	and to the Resolution Fund
	Other operating income		110		77		42.7%		77		43		76.8%
	Total operating income		2,216		1,740		27.3%		1,910		1,444		32.3%
	Net expense from impairment allowance, expected
	losses on assets, provisions for other risks and loan		(3)		52				46		40		13.6%
	commitments
	Personnel expenses		(580)		(476)		21.8%		(482)		(401)		20.3%
	Depreciation and amortization		(119)		(107)		11.8%		(104)		(98)		6.8%
	Other operating expenses		(338)		(241)		40.4%		(297)		(204)		45.7%
	Total operating expenses		(1,041)		(772)		34.8%		(837)		(662)		26.6%
	Profit before income tax		1,175		968		21.4%		1,073		782		37.2%
	Income tax expense		(176)		(131)		34.6%		(159)		(106)		50.4%
	Net profit		1,000		838		19.3%		913		676		35.1%
	Profit of the Group attributable to equity holders of		1,052		805		30.8%		913		676		35.1%
	the Bank
	Profit of the Group attributable to non-controlling		80		33		142.6%		0		0
	interests
	Net profit		1,132		838		35.2%		913		676		35.1%

The net profit recorded in the first three months of 2024 at Group level (RON 1,132 million), exceeds by more than 35% the net profit from the similar period last year (RON 838 million).

The increase of over 35% is also preserved at the Bank level, RON 913 million being the net profit obtained in the first quarter of the current year by Banca Transilvania versus RON 676 million, for the first three months of the previous year.

The net interest income shows an increase of 24.2% at Group level and by 28.4% at Bank level, reaching RON 1,543 million, respectively RON 1,325 million for the first three months of the current year.

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