Banca Transilvania - Third capital increase

disbursing

The subscription of newly issued shares of Banca Transilvania (BT) is part of a new capital increase to take place in June 2006. EBRD’s investment will total approximately € 5.4 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 aimed at contributing to the development and strengthening of a privately owned bank, as well as promoting improvements in its corporate governance. Such objectives have so far been achieved with EBRD’s role in BT being 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. The proposed participation in BT’s capital increase reinforces the objectives of the original equity investment by providing the necessary means for the bank to continue expanding its operations while strengthening its ability to face increasing competition. 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 2005, it has 3.9% market share of total banking assets, total balance sheet of EUR 1.3 billion, equity of EUR 144.6 million and a net profit of EUR 27.2 million. Subscription of 53,264,925 newly issued shares of BT for RON 0.35 each, as part of a capital increase to take place in June 2006. Total capital increase is EUR 35.5 mln. 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