Banca Transilvania (TLV) the only top ten private bankcontrolled by local investors is trying to raise 120 million RON(29 million euros) from its shareholders via a capital increase,and will also include in its share capital the non-distributedprofits of the last two years, worth 174 million RON (42.4 millioneuros) and the capital premiums from previous increases worth 97million RON (23.8 million euros).
As a result of the operation, which will amount to 391.5 millionRON (more than 95 million euros), Banca Transilvania will have thebiggest share capital of all the banks on the market, 1.47 billionRON (361 million euros).
"This is a defensive, not offensive step. The economic situationis hardly rosy and we want to be more cautious than usual," saidHoria Ciorcila, chairman and founder of Banca Transilvania, whocontrols about 4.9% of the shares.
After two years of crisis, most local banks are trying toconsolidate their capitals to be able to withstand the risingvolume of non-performing loans.
Unlike banks that are backed by foreign financial groups, towhich they can turn for loans, Banca Transilvania has a scatteredshareholder structure and the main stream of financing comes fromthe profits capitalised and the money raised from investors viacapital increases. Its biggest shareholder is EBRD, 14.6%, followedby Bank of Cyprus, which bought 9.5% last year.
The Cluj-based bank, the fifth biggest company on the BucharestStock Exchange by capitalisation is also requesting shareholders'approval for floatation on the Vienna Stock Exchange, which willimprove its visibility.
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