Banca Transilvania Partners with EIB Group for Landmark RON 2 Billion Securitisation to Boost SME Financing and Sustainability

Banca Transilvania Partners with EIB Group for Landmark RON 2 Billion Securitisation to Boost SME Financing and Sustainability

(IN BRIEF) Banca Transilvania has entered into a significant synthetic securitisation transaction worth RON 2 billion (€400 million), supported by the European Investment Fund (EIF) and the European Investment Bank (EIB). This transaction will reduce credit risk and release capital for the Romanian bank, enabling it to provide new financing of RON 2.64 billion to small and medium-sized enterprises (SMEs) with a focus on environmentally sustainable projects. This marks Banca Transilvania’s first securitisation and the first capital relief transaction with the EIB Group. The deal includes protection on mezzanine and senior tranches, counter-guaranteed by the EIB, and involves a portfolio of micro, SME, and corporate loans. The collaboration aims to enhance lending capacity, support the Romanian economy, and promote sustainable investments.

(PRESS RELEASE) LUXEMBOURG, 28-Jun-2024— /EuropaWire/ — In a significant financial development, a synthetic securitisation valued at RON 2 billion (approximately €400 million) has been orchestrated to reduce credit risk for Banca Transilvania. This initiative, supported by the European Investment Fund (EIF) and backed by the European Investment Bank (EIB), provides protection on both a mezzanine and a senior tranche. The transaction enables the Romanian bank to free up capital previously allocated to the securitised portfolio.

In conjunction with this securitisation, Banca Transilvania has committed to delivering new financing of RON 2.64 billion to small and medium-sized enterprises (SMEs), with a specific focus on environmentally sustainable projects. This move highlights the role of securitisation as a pivotal tool in reallocating capital for new investments that contribute to job creation and the transition to climate neutrality.

The European Investment Bank Group (EIB Group), consisting of the EIB and the EIF, has bolstered its long-term partnership with Banca Transilvania by approving this synthetic securitisation and new lending commitments.

This landmark transaction marks Banca Transilvania’s first foray into securitisation and represents the inaugural capital relief transaction between the bank and the EIB Group. The agreement aims to provide capital relief for Banca Transilvania concerning a portfolio of assets managed under the standardised approach, thereby increasing lending capacity to support Romanian SMEs and mid-caps. The EIF is offering protection on a mezzanine tranche worth over RON 324 million, counter-guaranteed by the EIB, and on a senior tranche exceeding RON 1.67 billion, half of which is also counter-guaranteed by the EIB. The securitised portfolio consists of micro, SME, and corporate loans with a total outstanding balance exceeding RON 2 billion.

BT Chief Executive Officer Ömer Tetik expressed satisfaction with the ongoing collaboration with the EIB Group, stating, “I am glad to see our collaboration with the EIB Group continue with this new project where we accelerate the access to finance for local SMEs, which are one of the pillars of the Romanian economy. Along with consolidating the financing capacity, the EIB has always brought to the table expertise and best practices, abilities that help us to an even better managing of our capital.”

Under the terms of the arrangement, Banca Transilvania has pledged to supply over RON 2.64 billion in fresh lending to SMEs and mid-caps over a three-year period. Notably, at least 20% of this financing will be allocated to projects aligned with climate action and environmental sustainability, underscoring the commitment of both BT and the EIB Group to supporting the transition to a low-carbon economy.

EIF Chief Executive Marjut Falkstedt commented on the transaction, “This transaction with Banca Transilvania underlines our commitment to support Romanian businesses so that they can grow in the best way possible in challenging times. I am glad that Banca Transilvania relied on our proven expertise in their first securitisation transaction, and that we are, together, in position to create new opportunities for the Romanian economy, leveraging securitisation to promote sustainable investments.”

EIB Vice-President Ioannis Tsakiris added, “The EIB’s participation will create a signalling effect to other international financial institutions and contribute to the development of the capital market in Romania.”

This transaction represents a milestone in the collaboration between the EIB Group and Banca Transilvania, showcasing a mutual commitment to fostering economic growth and sustainability in Romania.

About the European Investment Bank

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.

About the European Investment Fund

As of 2 May 2024 the EIF aligns its logo to the EU family, reinforcing its role as a key EU player.

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF contributes to the pursuit of key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability and more.

About Banca Transilvania

Banca Transilvania is the largest bank in Romania and in Southeast Europe. As a universal bank, it covers all customer segments and business lines in the financial sector. It has over 20% market share, 4.3 million customers, over 10,000 employees, online banking solutions and 500 offices in 180 towns. The value of the Banca Transilvania brand reached 686.5 million dollars, on the 252nd place in Brand Finance Banking 500 2024.

Media Contact:

Daniel Kozak
d.kozak@ext.eib.org
+352 4379 – 70905

Press Office

press@eib.org
+352 43791

SOURCE: European Investment Bank