Banca Transilvania - Second capital increase

disbursing

BT registered outstanding results over the last 12 months, exceeding the most optimistic expectations, and additional capital is required for the bank to continue the same pace of growth. The subscription of newly issued shares of Banca Transilvania (BT) is part of a new capital increase to take place in June 2005. In parallel, BT is also raising USD 25 million (EUR 19.2 million) in tier II capital. EBRD’s investment will total approximately € 2.2 million and will allow the Bank to retain its 15% stake in BT. Such capital increase will further support BT’s growth in the Romanian banking sector. The strategy of BT will remain to consolidate its market position by developing a financial group including not only banking but also leasing, asset management, brokerage, consumer finance and insurance. BT is particularly strong in the SME and retail sectors. EBRD’s original equity investment in BT was aimed at contributing to the development and strengthening of a privately owned bank, as well as promoting improvements in its corporate governance. EBRD’s role in BT has been particularly important in promoting higher corporate governance standards, in strengthening the bank’s management and in supporting the ambitious strategy that is currently being implemented. BT is currently the first largest bank in Romania in the hands of local private investors and is one of the fastest growing banks in the country, increasing consistently its market share. BT is also one of the most traded companies in the Bucharest Stock Exchange. The proposed participation in BT’s capital increase, just like the participation in the first capital increase completed in 2004, will allow the EBRD to retain its 15% stake and confirms the confidence in BT and its growth prospects. It is consistent and reinforces the objectives of the original equity investment by providing the necessary means for the bank to continue expanding its operations. The ultimate goal is for BT to further develop into a more modern and efficient institution, which will contribute to the competitiveness of Romania’s banking sector and to the increase in availability of funding to local companies. BT is a medium-size commercial bank registered and operating under Romanian law. As of end 2004, it has 2.9% market share of total banking assets, total balance sheet of EUR 668.6 million, equity of EUR 75.1 million and a net profit of EUR 15.3 million. Subscription of 20,025,000 newly issued shares of BT for ROL 4,000 each, as part of a capital increase to take place in June 2005. EUR 14.8 million BT will continue to comply with EBRD's Environmental Procedures for Intermediated Financing through Local Banks, including adherence to the Environmental Exclusion and Referral List, compliance with the applicable national environmental, health and safety and public consultation requirements, and submission of annual environmental reports to the EBRD. None for this transaction. BT benefited from Technical Cooperation under the EU/EBRD SME Facility to finance the consultancy services of Shorebank Advisory Services from January 2000 to April 2003. BANCA TRANSILVANIA CLUJ-NAPOCA, G Baritiu Street, no. 8 e-mail: bancatransilvania@bancatransilvania.ro Phone: (40)-264-407150 Fax: (40)-264-407179