BANCA TRANSILVANIA S.A. Romanian joint-stock company ...

Interest expense -921,954 -897,963 -1,355,111Net interest income 934,418 996,297 754,329Fee and commission income 436,026 421,645 417,098Fee and commission expense -53,868 -46,735 -46,293Net fee commission income 382,158 374,910 370,805Net income from financial 111,613 118,969 143,201operationsOther operating income 61,524 51,719 48,316Operating income 1,489,713 1,541,895 1,316,651Net expense with asset provisions, -315,849 -646,965 -490,784other debts and lendingcommitmentsPersonnel expenses -390,262 -373,371 -348,999Depreciation and amortization -63,787 -60,897 -68,042Other operating expenses -364,386 -306,888 -299,957Operating expenses -1,134,284 -1,388,121 -1,207,782Profit/Loss from associates 0 4,741 10,298Profit from the sale of associates- 38,596and jointly controlled companiesProfit before tax 355,429 158,515 157,763Corporate tax expense -58,181 -24,531 -21,048Profit for the financial year 297,248 133,984 136,715Profit distributable to:The Bank’s equity holders 297,019 133,794 138,323Profit distributed to noncontrolling229 190 -1,608interestsProfit for the financial year 297,248 133,984 136,715Basic earnings per share 0.1840 0.0801 0.1038Diluted earnings per share 0.1840 0.0801 0.1038The financial statements included in the Consolidated Profit and Loss Account, for thefinancial year ended 31 st December have been audited.Consolidated statement of financial positionFor the financial year ended 31 December2011ThousandLei2010Thousand Lei2009Thousand LeiAssetsCash and cash equivalents 4,550,256 3,701,125 3,186,997Placements with banks 778,977 1,237,155 1,535,9158

The financial statements included in the Consolidated statement of financial position forthe financial year ended 31 st December table, have been auditedThe Banca Transilvania Individual Financial Statements as of Q3 2012Individual Profit and Loss AccountFor the financial Q3 2012Q3 2012Thousand LeiQ3 2011Thousand LeiQ32012/Q3 2011 %Interest income 1,506,577 1,341,881 1.12Interest expense (798,066) (694,540) 1.15Net interest income 708,511 647,341 1.09Fee and commission income 358,371 322,686 1.11Fee and commission expense (44,125) (36,345) 1.21Net fee commission income 314,246 286,341 1.10Net income from financial 100,912 73,345 1.38operationsOther operating income 33,867 14,761 2.29Operating income 1,157,536 1,021,788 1.13Personnel expenses (313,382) (278,044) 1.13Depreciation and amortization (35,055) (36,927) 0.95Other operating expenses (268,534) (233,369) 1.15Operating expenses (616,971) (548,340) 1.13Operating profit 540,565 473,448 1.14Net expense with asset provisions, (265,737) (219,460) 1.21other debts and lendingcommitmentsProfit before tax 274,828 253,988 1.08Tax expense (9,396) (49,472) 0.19Net profit 265,432 204,516 1.30The financial statements included in the Individual Profit and Loss Account for thefinancial Q3 2012 table, have not been auditedIndividual statement of financial positionFor the financial Q3 2012Q3 2012Thousand Lei10Dec 31, 2011Thousand LeiQ3 2012/Dec 31,2011 %AssetsCash and cash equivalents 4,558,295 4,546,532 1.00

Placements with banks 1,059,394 566,608 1.87Loans and receivables - debt 77,593 202,819 0.38Financial assets at fair value 38,734 119,521 0.32through profit and lossLoans and advances to customers - 15,526,590 14,035,290 1.11netInvestment securities, available for 7,171,962 5,813,219 1.23saleInvestment securities, held to0 819 -maturityInvestments in associates 74,053 69,978 1.06Intangible assets 74,004 69,136 1.07Tangible assets 275,174 266,586 1.03Receivables related to deferred 16,683 26,974 0.62income taxOther assets 137,491 100,364 1.37Total assets 29,009,973 25,817,846 1.12LiabilitiesDeposits from banks 265,800 251,181 1.06Deposits from customers 22,833,173 20,280,230 1.13Loans from banks and other 2,671,711 2,468,988 1.08financial institutionsOther subordinated liabilities 276,095 260,148 1.06Other liabilities 324,251 237,495 1.37Total liabilities 26,371,030 237,495 1.12EquityShare capital 1,989,543 1,860,159 1.07Treasury shares -1,997 -1,907 1.05Share premiums 0 732 -Carried forward earnings 369,283 234,983 1.57Re-evaluation reserve 33,548 34,134 0.98Other reserves 248,566 191,700 1.30Total equity 2,638,943 2,319,804 1.14Total liabilities and equity 29,009,973 25,817,846 1.12The financial statements included in the Individual statement of financial position for thefinancial Q3 2012 table, have not been audited.A statement that there has been no material adverse change in the prospects of theIssuer since the date of its last published audited financial statements or a description ofany material adverse change.11

Since December 31, 2011, the last audited financial situations presented in theProspectus there has been no material adverse changes in the prospects of BancaTransilvania.A description of significant changes in the financial or trading position subsequent tothe period covered by the historical financial information.Since September 30, 2012, the last financial situations presented in the Prospectus therehas been no significant changes in the financial or trading position of BancaTransilvania.B.13 A description of any recent events particular to the Issuer which are to a material extentrelevant to the evaluation of the Issuer’s solvency.For prudential purposes, the IFRS provisioning methodology and Profit and LossAccount for H1 2012 have been audited.Banca Transilvania’s capital adequacy ratio, including the audited profit for H1 2012continues to be at a comfortable level of 11.27%.B.14 If the Issuer is part of a group, a description of the group and the Issuer’s positionwithin the group.In 2003, Banca Transilvania formed a financial group to offer integrated financialservices. The financial group includes the following subsidiaries: BT Securities S.A., BTLeasing Transilvania IFN S.A., BT Investments S.R.L., BT Direct IFN S.A., BTBuilding S.R.L., BT Asset Management S.A.I. S.A., BT Solution Agent de AsigurareS.R.L., BT Asirom Agent de Asigurare S.R.L., BT Intermedieri Agent de AsigurareS.R.L., BT Safe Agent de Asigurare S.R.L., BT Compania de Factoring S.R.L., BTFinop Leasing S.A., BT Medical Leasing IFN S.A., Rent-a-Med S.R.L. and BT LeasingMD S.R.L.Banca Transilvania is part of the Banca Transilvania Group, which includes the parent-Bank and its subsidiaries headquartered in Romania, Republic of Moldova and Cyprus.If the Issuer is dependent upon other entities within the group, this must be clearlystated.Not applicable.B.15 A description of the Issuer’s principal activities.The Bank's main business activity consists of offering banking products and servicessuch as current accounts, cash operations, deposits, loans, discount operations andtrading bills acceptance, placements, subscriptions, management of securities portfolios,banking consultancy, negotiation of insurance/reinsurance contracts with insurancecompanies, settlement of securities and deposit and custody operations for collectiveplacement bodies. In accordance with Article 6 in the Articles of Association, thebusiness activity of the Bank is "NACE 6419 - Other monetary intermediation12

activities".B.16 To the extent known to the Issuer, state whether the Issuer is directly or indirectly ownedor controlled and by whom and describe the nature of such control.The only shareholders holding more than 5% of the Bank’s Shares are the EBRD, whichholds 278,100,206 Shares representing 14.6134% of the Bank’s Shares, BANK OFCYPRUS PUBLIC COMPANY LIMITED which holds 98,851,113 Shares representing5.194373% of the Bank’s Shares and SIF Moldova which holds 95,169,081 Sharesrepresenting 5.0008% of the Bank’s Shares.The EBRD is an international organization owned by its member/shareholder countries,the European Community and the European Investment Bank.B.17 Credit ratings assigned to the Issuer or its debt securities at the request or with thecooperation of the Issuer in the rating process.Banca Transilvania has been rated by Fitch Ratings Agency since 2009 and the ratingawarded in 2009, was confirmed by Fitch Ratings in 2010 and 2011, so at this momentthe Bank ratings at Long-term foreign currency Issuer Default (IDR) is “BB-”, shorttermforeign currency IDR is “B” and Individual is “D”, Support is “3” and SupportRating Floor is “BB-”. The Outlook for the Long-term foreign currency IDR is Stable.Section C: SecuritiesC.1 A description of the type and the class of the securities being offered and/or admitted totrading, including any security identification number.Subordinated unsecured convertible Bonds of 2013, due 2020 to be issued pursuant tothis Prospectus, which will be in nominative, dematerialized form, registered in theBond Registry kept with the Central Depositary, with a nominal value of Euro0.6 eachand a total nominal value of up to Euro30,000,000.C.2 Currency of the securities issue.EuroC.5 A description of any restrictions on the free transferability of the securities.There are no restrictions on the free transferability of the securities.C.8 A description of the rights attached to the securities.• Including ranking• Including limitations to those rightsStatus, SubordinationThe Bonds are direct, unconditional, general and unsecured obligations of the Bankranking pari passu among themselves and without any preference, but the Bonds shall besubordinated and junior in right of payment to the non-subordinated claims of all othercreditors, but shall rank pari passu with any subordinated debts of the Issuer, ; providedthat, such subordination provisions shall not prevent any holder of the Bonds fromexercising the conversion rights under the Bonds set forth in the Prospectus, and no13

deemed payment of any Bond arising out of any exercise of conversion rights shall beprohibited by such subordination provisions.In the event of bankruptcy or liquidation of the Bank, all amounts due under the Bondsshall be subordinated to the prior payment and satisfaction in full of all unsubordinatedindebtedness of the Bank admitted in such procedure. The subordination provisionsshall be pursuant to the requirements set forth by the NBR to qualify the Bonds assupplementary Tier II Capital of the Bank (own funds of the Bank), i.e. compliant withthe NBR’s Regulation 18/2006.For as long as the Bonds are outstanding, the Bank shall not create or permit to becreated any mortgage, pledge or other lien or charge on any of its property or assets, assecurity for any bonds, notes or other evidence of indebtedness heretofore or hereafterissued, assumed or guaranteed by the Bank for money borrowed, but this undertaking ofthe Bank does not represent an Event of Default pursuant to Regulation 18/2006 andconsequently cannot trigger an early repayment, acceleration or increase in the initialcosts.Until the date of the first Business Day of the Primary Offer, the Bank will not make anyand will not allow the entry into force of any amendment to any of the Bond Agreementsthat would adversely affect the interests of the Lead Investor in the bonds of Tranche A,and will promptly notify the Lead Investor with respect to the termination or change ofany Bond Agreement, [and in reference to any replacement or substitution of the PayingAgent], but failure to comply does not constitute a case of cross default, as defined byRegulation 18/2006 and, consequently, cannot trigger a prepayment, acceleration orincrease in the initial costs of the Bonds.Until the date of the Lead Investors’ subscription in the Primary Offer, in case the LeadInvestor finds any major violation or any event which proves false or incorrect any ofthe representations or warranties of the Tranche A Bonds Subscription Agreement, ofthe Prospectus or any of the Bond Agreements or any other documents referring to theaforementioned, or any failure of the Bank to comply with any undertakings orarrangements in the Tranche A Bonds Subscription Agreement, the Prospectus or any ofthe Bond Agreements or any other documents referring to the aforementioned, the LeadInvestor has the right to terminate the Subscription Agreement, but this does notconstitute a case of cross default, as defined by Regulation 18/2006 and, consequently,cannot trigger a prepayment, acceleration or increase in the initial costs of the Bonds.Events of DefaultThe events of default will be limited to and will have the meaning in the definition, inline with Regulation 18/2006.Issuer’s undertakings14

Subject to the provisions laid down in Annex 2A, the Issuer undertakes to observecertain standards which will increase the performance of the Bank for the benefit of theBondholders and to provide certain information and documents to the Bondholders. Thebreach of these undertakings does not constitute an event of default and consequentlycannot trigger the acceleration and/or early repayment of the Bonds or the increase in theinitial costs of the Bonds.Conversion rightsSubject to the conditions set forth in Section 5. “Conversion”, within Section 2.Information regarding securities that are to be offered, II. Bonds Terms and Conditions,any Bondholder may choose to effect the conversion of all or any portion of theoutstanding principal of Bonds held by such Bondholder into Shares of common stock ofthe Bank free and clear of any Encumbrance (as defined below) and together with allrights attaching thereto, on each of the dates mentioned under Section 5. “Conversion”,within Section 2. Information regarding securities that are to be offered, II. Bonds Termsand Conditions.Taxation: Bonds and all interests thereto are not exempt from taxation (in general).Taxes applicable to investors in Bonds are: (i) tax on gains from transfer of Bonds; and(ii) tax on income from interests related to Bonds. Such taxes are set according to theresident/non-resident status of the investor.The Bonds shall not be rated and admitted to trading on a regulated market or any othertrading platform (multilateral trading facilities etc).C.9 • The nominal interest rateSecurities subject matter of the Offer: subordinated unsecured convertible Bonds of2013, due 2020 issued in nominative and dematerialized formNumber of Bonds: 50,000,000 BondsNominal Value: Euro0.60Issue price: 0.6 EUROEstimated proceeds of the Offer: Euro30,000,000Nominal interest rate: The Bonds bear interest from and including the Issue Date, at afloating annual interest rate based on EURIBOR 6 month + a spread set at 6.25%.• The date as of which the interest becomes payable and interest due datesInterest payments: semi-annually; the interest is due and payable: on (i) January 15 th andJuly 15 th of each year (ii) in case of conversion on the 3 rd Business Day after the SharesIssue Date immediately following the relevant Conversion Date.Interest payment Date: Each of the following: 15 July 2013, 15 January 2014, 15 July2014, 15 January 2015, 15 July 2015, 15 January 2016, 15 July 2016, 15 January 2017,15 July 2017, 15 January 2018, 15 July 2018, 15 January 2019, 15 July 2019, 15 January2020 and the Maturity Date.15

Method of payment: principal and interest payments in respect of the Bonds will bemade on the relevant Interest Payment Date and/or Redemption Date, as applicable, bythe Paying Agent to the Bondholders registered in the Bond Registry as of the applicableRecord Date• Where the rate is not fixed, description of the underlying grounds thereofFloating rate determined semi-annually with reference to the EURIBOR 6month"Spread" set at 6.25%plus a• Maturity date and the arrangements for the amortisation of the loan, includingthe repayment proceduresMaturity/Redemption: Outstanding Bonds which have not been converted into Shareswill be redeemed in their principal amount after seven years, on the date which will beseven years after the Issue Date. The maturity will not exceed 7 years. The Bonds maynot be pre-paid or redeemed prior to the Redemption Date and Bondholders will have nooption to accelerate payment, except in an Event of Default;• Conversion rights:It shall be possible to convert outstanding Bonds into Shares, at the Bondholder’s option(i) by sending a Conversion Notice in the form of Annex 4 within (30) days from a PriceFixing Date or (ii) by sending a Conversion Notice in the form of Annex 4 within 90days immediately following a Liquidity Event Date. For the avoidance of doubt, theIssuer shall mention the exact Conversion Date in the notification towards Bondholdersto be sent at least 15 days before the Price Fixing Date or within five (5) days after aLiquidity Event Date.The Conversion shall occur at a price per Share to be determined on the applicable PriceFixing Date or Liquidity Event Date, equal to the average between the highest andlowest daily price of the Shares on the Spot Regular Market, weighted by the dailytrading volume on the Spot Regular Market over the 90 days on which the Shares weretraded on the BVB, immediately prior to the applicable Price Fixing Date or LiquidityEvent Date.The conversion rights expire at the later of (i) Bond maturity or (ii) final repayment ofthe Bond.In case the conversion option is exercised, the related interest becomes due on the 3 rdBusiness Day after the Shares Issue Date immediately following the relevant ConversionDate and the interest will be paid for the period between the previous Interest PaymentDate and the applicable Shares Issue Date, excluding the Shares Issue Date.• An indication of yieldThe annual gross yield at maturity is calculated based on the Issue Price16

(assuming that there is no conversion/redemption before maturity) anddepending on the floating annual interest rate based on EURIBOR 6 month +aspread set at 6.25%.• Name of the representative of the debt security holdersBondholders' Meeting: Bondholders may convene in general meetings to decide mattersrelating to their interests in relation to the Bonds, in accordance with the law in force.C.10 If the security has a derivate component in the interest payment, provide a clear andcomprehensive explanation to help investors understand how the value of theirinvestment is affected by the value of the underlying instrument (s), especially under thecircumstances when the risks are most evident.Not applicable.C.11 An indication as to whether the securities offered are or will be the object of anapplication for admission to trading, with a view to their distribution in a regulatedmarket or other equivalent markets with indication of the markets in question.The Bonds will not be admitted to trading on the Bucharest Stock Exchange or any otherregulated market, or any other trading platform (multilateral trading facilities, etc.).Section D: RisksD.2 Key information on the key risks specific to the IssuerRisks related to Romania• Romania is an emerging market• General - Emerging Markets• Political and Governmental Instability in Romania• Legislation• Bankruptcy LawsRisks related to the Banking Industry in Romania• Credit risk• Liquidity Risk• Market Risk• Interest Rate Risk Outside the Trading Portfolio• Currency Risk• Operational Risk• Reputational Risk• Strategic Risk• Banking LawsD.3 Key information on the risks specific to the securities.Risks related to the Bank and the Bonds• Business Environment; Dependence on the Romanian Economy• Liquidity of the Bonds and the Shares17

• No Credit Rating of the Bonds• Convertible subordinated unsecured Bonds• The interest floating rate• The Bonds may not be a suitable investment for all investors.• Independent review and advice• Legal investment considerations may restrict certain investments• The Bonds subject matter of the Offer will not be evaluated and ratedRisks related to the Shares• The market price of the Shares is volatile and could be adversely affected by thefuture sale of the Shares on the open market• A suspended trading in the Shares could adversely affect the share price• Shares traded on the BSE are less liquid and more volatile than shares traded onother major stock exchangesSection E: OfferE.2b Reasons for the offer, use of proceeds, estimated net amount of the proceeds.Increase the Bank's supplementary Tier II Capital base (own funds of the Bank) andfinance the general operations of the Bank and the expansion of the Bank's operations,including its branch network;E.3 A description of the terms and conditions of the offer.Broker: BT Securities;Distribution Agent: BT Securities;Distribution undertaking: best efforts;Paying Agent: BT Securities;This Offer is structured in two distinct offers:1- The Pre-emptive Offer: This offer is addressed to all the Shareholders of theBank, as registered at the “Registration Date”2- The Primary Offer is addressed primarily to the Lead Investor; if there are anyresidual Bonds left after the subscription by the Lead Investor, these will beoffered to Qualified Investors.:Considering this distinction, this Primary Offer is divided into two tranches:(i) The Tranche A Bonds offer, addressed to the Lead Investor inpriority to the Tranche B Bonds offer, and is comprised of allBonds that remain unsubscribed to after the close of the Preemptiveoffer stage, and is up to 18,938,347.80 EUR.(ii)The Tranche B Bonds offer: This offer is addressed to QualifiedInvestors and is comprised of any Bonds that remain unsubscribed18

after the close of the Pre-emptive Offer minus the Bonds that aresubscribed by the Lead Investor in the Tranche A Bonds offer.The Pre-emptive Offer and the Tranche B Bonds offer aregoverned solely by the terms of this Prospectus, as well as theother Bond Agreements other than the Tranche A BondsSubscription Agreement.The Tranche A Bonds offer is governed by the terms of thisProspectus as well as by the Tranche A Bonds SubscriptionAgreement, the main terms of which are disclosed in thisProspectus, including in some the of annexes hereto.Subscription method for the Pre-emptive Offer//Exercise of pre-emptive Rights: TheBonds will first be offered to the Shareholders registered in the Shareholder’s Registeras at Registration Date of May 21, 2012 who will be entitled, subject to the Prospectus,to exercise pre-emptive rights to purchase Bonds up to a maximum aggregate principalamount equal to the product of Euro 30,000,000 times a fraction, the numerator of whichis equal to the aggregate number of Shares held by such shareholder as of May 21, 2012,and the denominator of which is equal to the aggregate number of Shares issued andoutstanding on May 21, 2012. The maximum number of the Bonds that can be purchasedby each entitled shareholder as of May 21, 2012 is equal to the previously mentionedproduct divided by 0.6. No fractional Bonds shall be issued. If a fractional number ofBonds results, the number of Bonds will be rounded as follows: if the fraction is equalto or less than one-half, the number of Bonds will be rounded down to the next wholeBond; and if the fraction is greater than or equal to one-half, the number of Bonds willbe rounded up to the next whole Bond. The Pre-emptive Offer will begin on09.04.2013 and continue for a period of thirty (30) calendar days until 08.05.2013, at theBroker’s head offices and the CNVM authorized agencies of BT Securities between9.00-16.00 each Business Day, except for the last day (08.05.2013), which will close at14.00.Subscriptions in the Primary Offer:Tranche A Bonds offer: The Tranche A Bonds will be issued in an aggregate principalamount of up to Euro 18,938,347.80 consisting of 31.563.913 Bonds, and are reservedfor subscription by International Finance Corporation as Lead Investor pursuant to theTranche A Bond Subscription Agreement.The Issuer and the Lead Investor concluded a Tranche A Bond Subscription Agreementunder English law which documents the agreement of the Issuer to reserve the TrancheA Bonds for the Lead Investor. The Tranche A Bond Subscription Agreement containscertain undertakings by the Issuer detailed in the Undertakings provided in Annex 2A tothe Prospectus which mainly represent standards which will increase the performance of19

the Bank for the benefit of the Bondholders. In accordance with the Tranche A BondsSubscription Agreement, the Lead Investor’s obligation to buy Bonds is subject tocertain conditions precedent, as detailed in Annex 1 to this Prospectus. Likewise, theLead Investor has the right to terminate the Tranche A Bonds Subscription Agreementbefore its subscription within the Primary Offer, if certain events such as those detailedin Annex 1 to this Prospectus occur. In case of termination of the Tranche A BondsSubscription Agreement, the purchaser of Tranche A shall not be entitled to subscribe tothe Tranche B Bonds. Furthermore, the Lead Investor is entitled to certain fees that havebeen outlined in Section “Pricing” in Section 3. Offer Conditions, in II. Bonds Termsand Conditions of this Prospectus and that concern its role as Lead Investor investing inthe reserved Tranche A Bonds.Tranche B Bonds offer: The Tranche B Bonds will be the unsubscribed Bonds from thePre-emptive Offer and excluding the ones subscribed in Tranche A. Only QualifiedInvestors can subscribe in this trancheThe results of the Pre-emptive Offer and the number of the Bonds object of the PrimaryOffer, i.e. the number of the Bonds of Tranche A and, respectively, Tranche B will beannounced through a press release in a national newspaper on the first Business Day ofthe Primary Offer.Following the closing of the Pre-emptive Offer, the Lead Investor may subscribe forTranche A Bonds and Qualified Investors may subscribe for Tranche B Bonds, in thePrimary Offer respectively, beginning on the first Business Day after the closing of thePre-emptive Offer, from 09.05.2013 until 21.05.2013 at the broker’s head offices theCNVM-authorized agencies of BT Securities from 9.00-16.00 each Business Day,except for the Offering closing day, which will close at 14.00;The Lead Investor is entitled to subscribe in the Primary Offer up to Euro 18,938,347.80consisting of up to 31,563,913 Bonds.The Lead Investor may exercise its right to subscribe in the Pre-emptive Offer up to itspro rata share of its shareholding in the Issuer and during the Pre-emptive Offer Periodon the terms of this Prospectus. The Lead Investor can then subscribe up to maximumEuro 18,938,347.80 within the Primary Offer Period, where those Tranche A Bondswould be reserved and allocated to the Lead Investor regardless of Tranche Bsubscription bids, on the terms of this Prospectus and the Tranche A Bond SubscriptionAgreement.Upon the subscription by the IFC of the Tranche A Bonds, but no later than the last dayof the Offer, 10:00 a.m. (Bucharest time), the Issuer shall send a current report to BVBon the performance of the subscription to Tranche A Bonds.On the last day of the Offer, if IFC has not subscribed the Tranche A Bonds, they shallbe allotted to the Tranche B Bonds. The Issuer, on the same day, by 10:00 a.m.(Bucharest time) shall send a current report to BVB mentioning the allotment of the20

Tranche A Bonds to Tranche B Bonds. This current report on the reallocation of theTranche A Bonds to Tranche B Bonds shall not and cannot be considered an amendmentto the Prospectus.On the Allocation Date the Tranche A Bonds will be first allocated to IFC and then theTranche B Bonds, provided there are remaining Bonds available for this tranche, will beallocated to Qualified Investors on pro-rata basis in the case of over-subscriptionThe Offer is considered successfully closed, if there are subscribed Bonds in anaggregate amount of minimum Euro 20,000,000.In the event that the offer is not entirely subscribed by the end of the subscription periodthe Bonds which will remain unsubscribed after the closing of the Pre-emptive Offer andPrimary Offer will be annulled.In case the Offer is not subscribed up to the successful threshold mentioned above, theamounts subscribed will be reimbursed to the investors within 10 Business Days as ofthe closing of the Offer, by banking transfer in the banking account mentioned in thesubscription form.Offer period:• the Pre-emptive Offer - thirty (30) calendar Days beginning on 09.04.2013 andending on 08.05.2013;and• the Primary Offer – nine (9) Business Days beginning on 09.05.2013 and endingon 21.05.2013;The price for the subscribed Bonds is due and payable by the investors of the subscribedBonds upon the subscription of the Bonds; the settlement and the registration of the titleto the subscribed Bonds will occur on the Issue Date. The first interest period begins onthe Issue Date, until July 14, 2013. .E.4 A description of any interest that is material to the Issuer/offer including conflictinginterests.The Broker has no interest, including any conflict of interest which can have asignificant impact on the Offer, except to fulfil the contract signed with the Issuer forintermediation.E.7 Estimated expenses charged to the investor by the Issuer or the offeror.The investors will not be charged for the subscriptions, but they must consider the factthat the issue price must be paid net of any bank fees. The investors must take intoaccount the applicable bank transfer fees and the required bank transfer duration.21

DEFINITIONSThe following terms within this Prospectus shall have the meanings below:"Articles of Association"The Bank’s Articles of Association, as last amended onNovember 1, 2012;“Allocation Date ”"Bank or Issuer""Banking Law""NBR ""BVB""Bonds Agreements"First Business day after the closing of the Primary OfferBANCA TRANSILVANIA S.A., headquartered in Cluj-Napoca, Trade Register registration no.J12/4155/16.12.1993, having a subscribed share capital oflei 1,903,042,413, fully paid inGovernment Emergency Ordinance No. 99/2006 on creditinstitutions and capital adequacy, as further amended;National Bank of Romania;Bucharest Stock Exchange;Collectively: (i) the Brokerage and Distribution Agreementdated 06.03.2013 between the Bank and the Broker; (ii) thePaying Agent Agreement dated 06.03.2013, between theBank and the Broker; (iii) the Tranche A Bond SubscriptionAgreement; (iv) the Registrar Agreement."Bonds" Subordinated unsecured convertible Bonds issued in 2013,due 2020 pursuant to this Prospectus, which will be innominative, dematerialized form, registered in the BondRegistry kept with the Central Depositary,“Bondholder”"Tranch A BondSubscription Agreement"“Bond Registry”The owner of BondsThe Bond Subscription Agreement between BancaTransilvania and IFC, dated 02.04.2013;the Book kept with the Central Depositary in which theBondholders are registered.23

“Lead Manager”,"Broker" or "BTSecurities"“Board of Directors”"Business Day""CNVM"BT SECURITIES S.A.The Bank’s corporate body having duties, as regulated underthe applicable Romanian laws and the Articles ofAssociation, irrespective of its composition at any timeA day, other than Saturday or Sunday and legal holidays, onwhich commercial Banks are open for business in Romania,London and New York; and also TARGET (Trans-EuropeanAutomated Real-Time Gross Settlement Express TransferSystem) is open for Business;National Securities Commission of Romania or any othersuccessor institution holding regulatory and supervisorypowers in respect of the Romanian capital market;“Conversion Dates” The 30 th day immediately following the applicable PriceFixing Date or the 90 th day following the applicableLiquidity Event Date, as the case may be.“Conversion Price”The price per Share at which the conversion will be made,according to the conversion algorithm set forth in Section 5.Conversion in Section II. Bonds Terms and Conditions.“Conversion Notice”The irrevocable written notice in the form attached hereto asAnnex ………. which will be sent to the Broker (to befurther submitted by the Broker to the Board of Directors),by the Bondholder in order to express its conversion right."Capital Market Law"Law No. 297/2004 on capital market, as further amended"Company Law"The Company Law No. 31/1990, as further republished andamended;"EBRD""Eur" or "Euro""EURIBOR 6 months "The European Bank for Reconstruction and Development;the single, unified, lawful currency of those statesparticipating in the Economic and Monetary Union (alsoknown as the "Euro-zone")Interbank interest rate for Euro-denominated 6-month termdeposits, expressed in percentage points per annum. Moreinformation about EURIBOR rates is available at24

www.euribor.org“EGMS”“Event of Default”The Extraordinary General Meeting of Shareholdersit shall be an event of default if (i) the Bank fails to paywhen due any the principal of, or interest on any Bondowed in accordance with the Prospectus; or (ii) anybankruptcy proceedings are initiated against the Bank orthe Bank files a petition seeking bankruptcy under anyapplicable law ."Foreign CurrencyRegulation""FCY" or "Fcy"“Group”"GMS"NBR’s Regulation No. 4/2005 regarding the foreigncurrency regime as republished and further amended;Foreign currency;The Bank and its consolidated subsidiaries, at the relevanttimeThe Bank’s General Meeting of Shareholders;"Issue Date"Shares Issue DateThe first Business day after the closing of the PrimaryOffer, respectively 22.05.2013;The Business day when CNVM issues the registrationcertificate of Banca Transilvania share capital increasewith the Shares resulted from the converted Bonds“Interest payment Date” Each of the following: 15 July 2013, 15 January 2014, 15July 2014, 15 January 2015, 15 July 2015, 15 January2016, 15 July 2016, 15 January 2017, 15 July 2017, 15January 2018, 15 July 2018, 15 January 2019, 15 July2019 ,15 January 2020 and the Maturity Date“Liquidity Event Date”the date upon which a definitive purchase or similaragreement is executed by a third party providing for theacquisition of at least 15% of the share capital of the Bankor for the control of the Bank or its business by anymeans, including a merger, consolidation, share exchange,purchase of assets, recapitalization, reorganization or25

estructuring, liquidation, dissolution or other similartransaction, whether in one transaction or a series oftransactions"Lead Investor" or "IFC""Lei" or “RON”Maturity Date"Offer"“Qualified investors”Qualified investor: International Finance Corporation;Lei (RON), the national currency of Romania;The 7-year anniversary after the Issue Date, when theoutstanding Bonds which have not been converted intoShares will be redeemed in their principal amount.The offering for the subscription of the Bonds pursuant tothe Prospectus, referring collectively to the Pre-emptiveOffer and the Primary Offer.any person or entity which, according to CNVM’sregulations: (i) is included in the category of professionalclients; or (ii) is, on request, treated as professional clientor is recognized as eligible counterparty, unless it hasrequested to be treated as non-professional client. For theavoidance of any doubt, a professional client is a clientwho possesses the experience, knowledge and expertise tomake its own investment decisions and properly the risksthat it incurs. In order to be considered a professionalclient, the client must comply with the following criteria:(a)Entities which are required to be authorized orregulated to operate in the financial markets. Thefollowing list includes all authorized entities carryingout the characteristic activities of the entitiesmentioned: entities which are authorized in Romaniaor in another Member State according to an Europeandirective, entities authorized or regulated in Romaniaor in another Member State which does not fall underany European directive and entities authorized orregulated by a non-Member State:1. credit institutions;2. investment firms;3. other authorized or regulated financialinstitutions;4. insurance companies;5. collective investment bodies and managementcompanies of such schemes;6. pension funds and management companies of26

such funds;7. traders;8. other institutional investors.(b) legal undertakings meeting two of the followingcriteria:1. balance sheet total: EUR 20,000,000;2. net turnover: EUR 40,000,000;3. own funds: EUR 2,000,000(c) national and regional governments, public bodies thatmanage public debt, Central Banks, international andsupranational institutions such as the World Bank, theInternational Monetary Fund, the European Central Bank,the European Investment Bank and other similarinternational organizations;(d) other institutional investors whose main activity is toinvest in financial instruments, including natural personsthat are registered with the National SecuritiesCommission qualified investors"Paying Agent"“Price-fixing Date”"Prospectus""Pre-emptive Offer""Pre-emptiveOffer Period""Primary Offer"BT Securities and, wherever the context so admits, anysubstitute paying agent;Each of July 27, 2014, July 27, 2015, July 27, 2016, July27, 2017, July 27, 2018, July 27, 2019, and the date whichis 30 days before the Maturity Date;This Prospectus regarding the offer of the Bonds,approved by CNVM by Decision No. 304 of 04.04.2013;The Offer of the Bonds to the existing shareholders of theIssuer, registered as at the Registration Date of 21 May2012The 30 calendar Days period beginning on 09.04.2013 andending on 08.05.2013, during which Bonds are offered tothe existing shareholders of the IssuerThe Offer of the Bonds remaining after performance of thePre-emptive Offer to the Tranche A Purchaser andTranche B - qualified investors;27

"PrimaryOffer Period""Reference Page"“Regulation 18/2006”The Period starting one Business Day after the closing dayof the Pre-emptive Offer Period and closing nine Businessdays thereafterthe display of Euro-zone Interbank offered rates fordeposits in Euro designated as page EURIB0R01onReuters services (or such other page as may replaceEURIBOR01on Reuters services for the purpose ofdisplaying Euro-zone Interbank offered rates for depositsin Euro).The NBR Regulation regarding own funds of creditinstitutions and investment firms as in force at the date ofthe Prospectus“Settlement and registrationof the subscribed Bonds”‘Redemption Date”“Record Date”the purchase price of subscribed Bonds will be due andpaid by investors upon subscription of the Bonds andregistration of the title to the subscribed Bonds will beeffected on the Issue Date The settlement will not be donethrough the Central Depositary, as the offer will not beusing the BVB systemThe date when the outstanding Bonds will be redeemed attheir par value on the Interest Payment Date falling on theMaturity Dateshall be the date three (3) Business days prior to theapplicable Interest Payment Date or the Redemption Date,as applicable“Registration Date” May 21, 2012“Registrar or CentralDepositary”“Registrar Agreement”“Registration Date ofS.C. Depozitarul Central S.A., the institution providingdepository, registration, clearing and settlement services inconnection with transactions in securities, as well as otheroperations connected therewithThe contract between the Bank and the Registrar regardingthe registration of the BondsThe first Business Day after the closing of the Primary28

Bonds”“Shares”“Spot Exchange Rate”“Spot Regular Market”Shareholders’ Register.Tranche A BondsOffer, when the Broker shall prepare and transfer the BondRegister to the RegistrarThe shares issued by Banca Transilvaniathe RON/Euro exchange rate published by the BNR asshown on Reuters applicable on the Price Fixing Date orLiquidity Event Datethe order-driven main market, where shares are tradedbased on standard lots and the shares’ reference price isdeterminedBook kept with the Central Depositary, according to thelegislation in force and in which the Issuer’s shareholdersare registered.The Tranche A Bonds issued in an aggregate principalamount of up to Euro 18,938,347.80 consisting of up31,563,913 Bonds, and are reserved for subscription byInternational Finance Corporation as Lead Investorpursuant to the Tranche A Bond Subscription Agreement.Tranche B BondsThe Tranche B Bonds will be the unsubscribed Bondsfrom the Pre-emptive Offer and excluding the onessubscribed by IFC in Tranche A Bonds. Only QualifiedInvestors can subscribe in this tranche“Trade Register”The Trade Register Office in Cluj-Napoca29

I. REGISTRATION DOCUMENT1. LIABLE ENTITIESBANCA TRANSILVANIA S.A., having its registered office in Cluj-Napoca, Str. G. Baritiu,nr. 8, registered with the Trade Register Office of Cluj under no. J12/4155/16.12.1993, withthe Tax Identification Number 5022670, legally represented by Nicolae Tarcea – DeputyGeneral ManagerBT SECURITIES S.A., with the registered office in Cluj-Napoca, Str. 21 Decembrie 1989nr.104, etaj 1, registered with the Trade Register of Cluj under no J12/3156/04.11.1994, withthe Tax Identification Number 6838953, legally represented by Mr. Rares Nilas – GeneralManagerHaving verified the content of this Prospectus, BANCA TRANSILVANIA S.A., legallyrepresented by Nicolae Tarcea – Deputy General Manager undertakes liability for the contenthereof and certifies that all information provided herein is true and free of any omissions ormisrepresentations that could materially affect the content of this document.BT Securities SA, acting through Rareş Nilas – General Manager, certifies that all informationcontained herein is, to the best of their knowledge, true and free of any omissions that couldmaterially affect the content of the document.2. BANK’AUDITORThe Bank's auditor is KPMG Audit S.R.L, having its registered office in DN1, SoseauaBucuresti-Ploiesti nr.69-71, Sector 1, Victoria Business Park, Bucuresti, 013685 registeredwith the Trade Register Office under number J40/4439/2000, registered with the RomanianAuditor Chamber, under no. 9/2001.30

3.SELECTED FINANCIAL INFORMATION3.1. Selected historical financial informationThe financial information included in this Prospectus consists of excerpts from (i) the Bank'sfinancial statements as of December 31, 2011, December 31, 2010 and December 31, 2009,prepared in accordance with the harmonized standards of NBR No.27/2011 and theinternational accounting standards applicable to credit institutions and (ii) the managementreports as of December 31, 2011, December 31, 2010 and December 31, 2009. Attached asAnnex 3 to this Prospectus is a complete copy of the Bank's audited financial statements as ofDecember 31, 2011, December 31, 2010 and December 31, 2009 and the related reports of theauditors.The Bank has not experienced a material adverse change since the date of its last auditedfinancial statements, i.e. December 31, 2011.Consolidated Profit and Loss AccountFor the financial year ended 31 December2011Thousand Lei2010ThousandLei2009Thousand LeiInterest income 1,856,372 1,894,260 2,109,440Interest expense -921,954 -897,963 -1,355,111Net interest income 934,418 996,297 754,329Fee and commission income 436,026 421,645 417,098Fee and commission expense -53,868 -46,735 -46,293Net fee and commission income 382,158 374,910370,805Net trading income 111,613 118,969 143,201Other operating income 61,524 51,719 48,316Operating income 1,489,713 1,541,895 1,316,651Net expense with asset provisions, other -315,849 -646,965 -490,784debts and lending commitmentsPersonnel expenses -390,262 -373,371 -348,999Depreciation and amortization -63,787 -60,897 -68,042Other operating expenses -364,386 -306,888 -299,957Operating expenses -1,134,284 -1,388,121 -1,207,782Share of profit/loss in associates 0 4,741 10,298Profit from the sale of associated entities- 38,596and jointly controlled companiesProfit before income tax 355,429 158,515 157,763Income tax expense -58,181 -24,531 -21,048Profit for the financial year 297,248 133,984 136,71531

Distributable to:Equity holders of the Bank 297,019 133,794 138,323Non-controlling interests 229 190 -1,608Profit for the financial year 297,248 133,984 136,715Basic earnings per share 0.1840 0.0978 0.1038Diluted earnings per share 0.1840 0.0978* 0.1038The financial statements included in the Consolidated Profit and Loss Account for thefinancial year ended 31 st December have been audited.Consolidated statement of financial positionFor the financial year ended 31 December2011Thousand Lei2010Thousand Lei2009ThousandLeiAssetsCash and cash equivalents 4,550,256 3,701,125 3,186,997Placements with banks 778,977 1,237,155 1,535,915Financial assets at fair value through 140,551 111,977 44,865profit and lossLoans and advances to customers 13,977,655 12,215,792 11,481,759Net lease investments 207,388 223,617 271,312Investment securities, available for sale 5,816,778 3,780,997 2,573,466Investment securities, held to maturity 819 820 11,654Investments in associates - - 42,404Property and equipment 297,531 287,570 305,000Intangible assets 70,555 48,875 12,389Goodwill 376 8,369 8,369Receivables related to deferred income 28,163 30,454 16,719taxOther assets 139,764 83,501 122,181Total assets 26,008,813 21,730,252 19,613,030LiabilitiesDeposits from banks 251,181 333,194 259,134Deposits from customers 20,257,251 17,279,132 14,989,199Loans from banks and other financial 2,592,982 1,593,295 2,160,404institutionsOther subordinated liabilities 260,148 257,553 253,665Debts – securities issued - 0 1,26232

Other liabilities 255,384 177,114 111,332Total liabilities 23,616,946 19,640,288 17,774,996EquityShare capital 1,860,159 1,560,500 1,176,237Treasury shares -2,118 -256 -333Share premiums 732 0 97,684Carried forward earnings 303,268 301,088 354,157Reevaluation reserve 35,544 28,291 22,543Other reserves 192,248 198,230 179,948Total equity distributable to equity 2,389,833 2,087,853 1,830,236holders of the BankNon-controlling interests 2,034 2,111 7,798Total equity 2,391,867 2,089,964 1,838,034Total liabilities and equity 26,008,813 21,730,252 19,613,030The financial statements included in the Consolidated statement of financial position for thefinancial year ended 31 st December table, have been audited.3.2. Presentation of the Bank’s Financial StatementsEvolution of the main financial ratios:Thousand Lei31 December201131December201031December20092011/2010(%)2010/2009(%)Total Assets 26,008,813 21,730,252 19,613,030 120% 110.79%Total Liabilities 23,616,946 19,640,288 17,774,996 120% 110.49%Total Shareholder’s 2,391,867 2,089,964 1,838,034 114% 113.70%EquityOperating income 1,489,713 1,541,895 1,316,651 97% 117.10%Operating expense 1,134,284 1,388,121 1,207,782 82% 114.93%Gross profit for the year 355,429 158,515 157,763 224% 100.47%Income tax expense 58,181 24,531 21,048 237% 116.54%Net profit for the year 297,248 133,984 136,715 222% 98%In 2011 total assets increased by 20%, from 21,730,252 thousand lei to 26,008,813 thousandlei, the Bank’s assets holding the greatest weight. In terms of assets, the market share of BancaTransilvania was:• 7.27% at the end of 2011, ranking third in NBR’s classification according to net assets;• 6.8% at the end of 2010, ranking fifth in NBR’s classification according to net assets;• 5.8% at the end of 2009.The volume of credits increased moderately both in 2011 and 2010, given the slower lending33

pace under the current market conditions, their weight in total assets at the end of 2011 being54% (2010: 56%).Investments in securities increased by more than 53% in 2011 as compared to the previousyear, due to the increase in liquidity levels and a lower demand for loans.Cash and placements with Banks increased by 7.9% as compared to the preceding year,whereas in 2010 they increased by 4.56% as compared to 2009.Against the background of the financial crisis, tangible and intangible assets registered a slightincrease as compared to 2010, similarly to the year 2010, which showed a slight 6% increase.As at 31 December 2011, debts amounted to lei 23,616,946, 20%higher as compared to theprevious year. This increase is mainly due to the higher volume of client resources, whichexceeded the level recorded in 2010 by 17%. In its turn, 2010 featured increases in debts of10.49% as compared to 2009, due to client resources which were 15.27% higher than in 2009.Borrowings from Banks and other financial institutions escalated by 63% comparatively to2010, whereas in 2010 they decreased by 26.25% versus 2009, due to a sound liquidity of theBank as a result of repeated disbursements made by NBR from the minimum compulsoryreserve and of a slower lending pace.The equity of the Group’s entities increased by 14% as compared to 2010, chiefly due to the19% share capital increase, while in 2010 it increased by 13.70% as compared to 2009, as aconsequence of the 32.66% share capital increase.The gross profit of the Group was 355,429 Th. Lei in 2011, on the increase by 124%comparatively to the preceding year, exclusively due to the diminishment of credit risk. In2010, the gross profit slightly outbalanced that of 2009, considering that 2010 continued topose great challenges to the global economy; the effects of the crisis, as well as the actionstaken by authorities to adjust to the new economic reality were felt within the communities.The operational income amounted to 1,489,713 Th. Lei, slightly falling below the 2010 level,mainly due to lower interest margins.The net interest income fell below the 2010 level by 6%, considering that 2010 continued topose great challenges to the global economy; the effects of the crisis, as well as the actiontaken by authorities to adjust to the new economic reality were felt within the communities.Net fee and commission income increased by 2% versus 2010, particularly because of thepositive evolution of the operating commissions from a larger number of transactions, whereas34

in 2010 they increased by 1% as compared to the previous year.The commissions collected in the lending process were spread over the loan terms, whosebalance was of 95,141 Th lei as at 31 December 2011, affecting the P&L account in theperiods to come (balance in 2010: 116,969 Th. lei).The provisions created in 2011 to cover lending, and leasing risks as well as other assetsdiminished at the group’s level by 51% as compared to the previous year, negatively affectingthe P&L account with the amount of 315,849 Th lei. In 2010 provisions at group levelincreased by 31.82% as compared to 2009, by adjusting risk management to the currenteconomic context, negatively affecting the P&L account with the amount of 649,945 Th lei.At the end of 2011, personnel expenses amounted to 390,262 Th lei, outbalancing the previousyear’s level by 4.52%, due to the increasing number of employees, from 6,914 to 7,151.Depreciation expenses at group level amounted to 63,787 Th lei, slightly outbalancing those ofthe preceding year by 5%, whereas in 2010 depreciation expenses fell below 2009 levels by10.5%, due to a milder investment activity.In 2011, other operating expenses, such as tax, rents, maintenance and repairs and others,increased by 19% as opposed to 2010, mainly due to greater contributions to the depositguarantee fund in the Banking system.Profitability ratios showed a 100% escalation in 2011 comparatively to 2010, as a result of a122% increase in the net profit; as such, the return on assets was 1.25%, while the return onequity was 13.26%. In 2010, profitability ratios registered a slight depreciation as compared to2009, considering the unremitting financial crisis which affected the global economy, so thatthe return on assets was 0.62% and the return on equity was 6.41%.The solvency ratio determined at Group level, under the Basel accord, recorded a value of13.49% (14,92% at December 31, 2010), considering that the minimum limit required by theBasel II accord is 8%.Capital AdequacyThe table below depicts the adequacy level of the Bank’s capital as at December 31, 2011 andDecember 31, 2010, according to Regulation 18/2006:Capital Adequacy Level Million LEI Million EUR2009 2010 2011 2009 2010 2011OWN FUNDS LEVEL I 1.734 1.943 2.075 410 453 48035

OWN FUNDS LEVEL II 203 154 78 48 36 18Deductible Elements -160 -210 -214 -38 -49 -50Own funds - total 1.777 1.887 1.939 420 440 449Capital demand - total 1.015 1.105 1.307 240 258 303Capital demand for creditrisk coverage 849 877 985 201 205 228Capital demand formarket risk coverage 46 71 132 11 17 31Capital demand foroperational risk coverage 120 157 190 28 37 44Adequacy level of ownfunds BASEL 2 14% 13.66% 11.87%The Bank must comply with the standards regarding own funds, as endorsed by NBR in 2006and subsequently amended, based on the standards established by the International BankingRegulations. Such regulations provide that banks should maintain an adequate level of ownfunds in relation to the risk-bearing assets and off-balance sheet exposures.The adequacy level of the Bank’s capital is determined in accordance with Regulations no.13/2006,14/2006,19/2006,21/2006,22/2006,24/2006 (the provisions of which are compliantwith the Basel II principles) by dividing the Bank’s own funds to the capital demand for thecoverage of all risks (credit risk, market risk, operational risk).As per the regulations, the turnover is determined by adding up the following incomes:- interest and assimilated income (from treasury and Interbank operations; from customeroperations; from bond and other fixed-income securities trading and other interests andassimilated income);- earnings from variable-income securities;- commissions;- profit or loss on financial operations (net earnings from operations with trading andinvestment securities, and exchange operations);- Other operating income (other banking and non-banking operating income).The table below presents the turnover pertaining to the last 3 financial years (as at December31, 2011, 2010 and 2009)36

TURNOVER(million lei)2011 2010 2009Interest receivable and assimilated income 1,916 1,864 2,077Security income 2 4 2Fee and commission income 420 401 396Net profit/loss on financial operations 85 127 179Other operating income 24 18 17TOTAL TURNOVER 2,447 2,414 2,671Employment of funds–Profit distributionThe Bank’s net profit for the financial years ended December 31, 2011, 2010 and 2009 wasdistributed as follows:(million lei)2011 2010 2009Net profit todistribute131.87 97.49 61.94Development fund 1.97Other reserve 9.34 6.75 4.30Reserves from netprofit122.53 88.77 57.63Financial ratiosThe table below presents the main financial ratios used by the Bank for the financial yearsended December 31, 2011, 2010 and 2009:31 DecemberRatioCalculation2011 2010 2009Shareholders’ equity/ totalLeverage8.32% 9.24% 9.12%assetsReturn on assetsNet profit / total assets(ROA)0.58% 0.49% 0.33%Return on equity(ROE)Net profit / shareholder’sequity6.38% 5.31% 3.64%Deposit Structure37

The table below presents the structure of the Bank’s deposits at December 31, 2011 and 2010(expressed in mill. lei)DepositStructure2011 2010 2011/2010TOTATOTAL LEI FcyLRetail depositsLEIFcyTOTALCurrent account 1,376 856 519 1,145 671 474 120% 128% 110%Term depositsTotal termdeposits fromprivate clientsTotal deposits –private clients11,619 6,6035,0169,700 5,4335,5312,994 7,459 10,845 6,1055Corporate deposits4,2674,740LEIFcy120% 122% 118%120% 122% 117%Current account 1,904 1,546 358 1,815 1,518 296 105% 102% 121%Term depositsTotal termdeposits fromcorporate clientsTotal deposits –corporateclients5,249 3,9617,153 5,5071,2881,646Total deposits4,557 3,4556,372 4,9731,1021,399115% 115% 117%112% 111% 118%Current account 3,279 2,402 877 2,960 2,190 770 111% 110% 114%Term deposits< 3 months11,1046,3244,7819,590 5,4004,189116%3 - 6 months 2,792 1,795 997 1,669 973 697 167%6 - 12 months 676 523 153 673 522 151 100%1-3 years 1,174 1,007 167 1,019 1,010 9 115%3-5 years 1,050 881 169 1,270 958 312 83%117%185%100%100%92%114%143%101%1816%54%38

5 years 72 34 38 36 25 11 199%Total termdepositsDEPOSITS -TOTAL16,86820,14710,56412,9666,3047,18114,257 8,88817,21711,0785,3696,139118%117%133%119%117%357%117%117%Loan PortfolioLoan Maturity DatesThe table below sets forth the maturity dates relative to the credit portfolio (the Bank’s grossexposures, in lei and foreign currency) as at December 31, 2011 and 2010:31 December2011 2010Loan maturity dates (million lei) (%) (million lei) (%)In lei< 3 months 1,845,058 21%3 - 6 months 1,388,447 16%6 - 12 months 2,051,609 23%1-3 years 1,463,780 16%3-5 years 871,436 10%1,483,5911,119,2781,829,4791,225,168641,66819%15%24%16%8%> 5 years 1,285,482 14%1,317,241100Total lei 8,905,812% 7,616,42517%100%In FCY< 3 months 462,592 9%376,5048%3 - 6 months 328,944 6%5%234,1796 - 12 months 468,162 9% 9%39

1-3 years 810,462 16%3-5 years 549,193 11%419,080779,801491,44116%10%> 5 years 2,586,726 50%2,568,487100Total FCY 5,206,079% 4,869,49253%100%Total Loans 14,111,891 12,485,916Arrears 1,246,312878,854TOTAL LOANS 15,358,204 13,364,77040

4. RISK FACTORSA section entitled “Risk Factors” shall set forth the risk factors which could impair theIssuer’s capacity to fulfil its obligations to investors arising from its securities.Any investment in the Bonds or Shares represents risk. Before making an investmentdecision, potential investors should read this Prospectus carefully. Investors shouldcarefully consider the risks presented below. The risks identified in this Prospectus arebelieved to be important risks (but not necessarily all of the important risks) related to theBank, the Bonds and the Shares. Additional risks not presently known to us or that wecurrently deem immaterial may also impair the Bank's operations, performance of theGroup and may lead to a decrease in the price of the Bonds or Shares.The Bank's business, financial situation or results of operations could suffer materialadverse effects caused by any of these risks. The trading price of the Shares could alsodecline due to any of these risks, and you may lose all or part of your investment.Investors are further advised to make their best efforts to perform their own assessment ofthis investment opportunity.In this section, the order of presentation and risk factors is a random order and not aprioritized one.4.1. Risks related to RomaniaRomania is an emerging marketRomania is an emerging market, therefore potential investors in Bonds and Shares shouldbear in mind that such a market poses a higher level of risk as compared to more developedcountries. The main country-specific downside risks in 2013 relate to the continuingdomestic political uncertainties that could increase financing costs and hold backinvestment. Emergent countries, such as Romania, need an adjustment to the legislativeprocess, so as to ensure a stable framework fostering a balance between consumer andinvestor interests. The process to this stable framework may extend over a long time span,whereas Romania may undergo a chain of sudden and unanticipated changes at political,legal, social or economic level, including periods of economic recession, material changesor legislation amendments, increased inflation rates, governmental instability, austeritymeasures taken by the Government or the State’s interference within the main infrastructureareas (including, without limitation, contributions requested by the Government).General - Emerging MarketsThe Romanian economy is currently in transition to a market economy, and the Romanian41

macro-economical environment is still unstable. Therefore, the Romanian market involvesgreater risk than developed markets, including legal and political risks. Political, economic,social and other events taking place in Romania or on other emerging markets may impactthe market value and the liquidity of the Bonds and Shares. As the development andactivities of the Bank are dependent to a large extent on the development of the Romanianeconomy, such transformations may have a material adverse effect on the Bank's business,financial status or results of operations.Nevertheless it is worth mentioning that Romania managed to pull out of recession in thesecond quarter of 2012, after two quarters of technical recessions.Political and Governmental Instability in RomaniaThe political context in Romania is highly volatile, marked by the constant disputesbetween executive, legislative and legal bodies, which bear a negative impact on thebusiness and investment environment in Romania. While the Romanian political settingmay currently seem fairly stable, the risk of instability as a result of an aggravation inRomania’s economic situation and the degradation of life standards should be considered.Any such instability could be greatly detrimental to the economic and political context,especially on short-term..Current credit risk ratingsOn May 25, 2012, Standard & Poor's Ratings Services affirmed its 'BB+/B' long and shorttermforeign and local currency sovereign credit ratings on Romania. The outlook is stable.The ratings on Romania are constrained by low prosperity and the economy's vulnerabilityto external shocks owing to still-high, albeit declining, external debt and dominantownership of the banking sector by Austrian and Greek parent banks. The ratings aresupported by the country's improving fundamentals; the fiscal deficit is declining, thecurrent account deficit has narrowed, and the economy has started to rebalance, with thesupport of an IMF program.Moody’s government bond rating is ‘BBaa3’ since October with negative outlook, whichgives Romania a non-investment grade according to Moody’s and ‘BBB’ according to Fitch– just one notch above junk statusLegislationAs a result of implementing the European Legislation, Romanian laws are continuallychanging. Laws regulating companies, securities, competition and other areas continue to be42

amended and new laws enacted to comply with the European Union legislation.The new or amended laws often come into effect quickly, before the adoption of theimplementing regulations. As a result, at times, the Bank may experience difficulties inquickly adapting its operations to comply with new regulations. Possible future changes tothe laws in force in Romania may have a materially negative impact on the Bank's business,financial condition or results of operations and the Bonds. Laws and regulations aresometimes applied inconsistently, and, in certain circumstances, legal remedies cannot beobtained quickly enough.Legal and regulatory systems necessary for an efficient operation of capital markets are stillbeing developed in Romania. Legal protections from market manipulation and illegalactivities are not implemented in Romania as fully and efficiently as in other moredeveloped jurisdictions.Bankruptcy LawsRomanian courts have exclusive jurisdiction in the bankruptcy procedures for a Romanianbank. Procedures related to bank bankruptcy in Romania may last longer than in moredeveloped jurisdictions.4.2. Risks related to the Banking Industry in RomaniaCredit riskCredit risk is linked to the quality of loans granted by the Bank and to the likelihood of nonpayment.It also refers to the credit risk attached to lending products substituted off-balancesheet, such as letters of credits and collateral. Breach of a borrower, natural or legal persons,of its respective obligations under a binding agreement, shall have an effect on the Bank’searnings or capital. Risk is incumbent on any act whereby the Bank grants a loan, employsor invests funds or is otherwise exposed through explicit or implicit contractual provisions.Lack of proper supervision of the lending-related activities poses credit agreement-relatedrisks to the Bank.The Group’s main objectives as regards credit risk management is to maintain reasonablebalance between yielding and credit risk exposure, considering the volatility of marketmargins, as well as the effort to maximize profits.Starting from the history of placements and the strategic objectives pursued in order toavoid credit risk concentration, the Group established exposure limits/coordinates,depending on: the business size of the economic agents, types of activity, types of loans,types of foreign currency, credit exposure in relation to total assets, collateral structure.The main rules established under the internal strategy are:43

• creation and constant maintenance of an adequate framework for credit riskmanagement;• continuous improvement of loan granting/approval procedures;• maintenance of a proper process for credit management, control and monitoring;• Provisioning and calculation methodologies for the prudential value adjustmentsrelated to credit risk.The Group determines approval competencies for the territorial offices and forHeadquarters, which set the maximal thresholds for loan approvals, guarantee agreements,surety.Liquidity RiskLiquidity risk refers to the current and potential risk to shareholder earnings and capital, inthe event that the Bank is unable to meet all its payment or settlement obligations in atimely and efficient manner, when such obligations become due. The risk also includes thelack of capacity to manage all unexpected decreases or changes in the financing resources,or to perceive and cope with market fluctuations which may affect the Bank’s capacity toquickly liquidate assets with the lowest possible loss of value.The Group’s strategy on liquidity management focuses on the main issues (principles, ratiolevels, administration techniques etc.) pertaining thereto, for the purpose of obtaining theexpected returns on assets, under the conditions of an adequate and prudent liquiditymanagement, intelligently assumed and adjusted to the market and the group’s developmentconditions, and most importantly, within the context of the current legislative framework.Liquidity management lies on 3 components:• the strategic component, which resides in the approval of balance sheet structuresand the annual strategy for liquidity management, setting forth optimal levels ofliquidity ratios assumed by the group for the year in progress;• the management component, in charge with follow-up and approval of actions onshort and medium-term – weekly, monthly, quarterly;• The operating component, which focuses on action-taking on a daily basis, withinthe competency limit.The supervision and control of the liquidity risk is based on the daily compliance with a setof relevant liquidity indicators.Market RiskMarket risk refers to the current and potential risk to shareholder earnings and capital, in theevent that market rates or prices undergo negative trends.The Group’s objectives as regards market risk management aim to achieve higher returns on44

the trading portfolio, under the circumstances of a fairly low market risk, intelligentlyassumed and adjusted to the market and the group’s development conditions.The market risk management strategy is designed according to the adjustments to theinternal and international legislative framework related to the management of such risk, as aresult of the international financial crisis. It also contemplates the Bank’s latest experiencesand those of the financial markets, in general, and the Banking market, in particular.The Group/Bank is permanently committed to improving the current techniques, methodsand practices for market risk management.Interest Rate Risk Outside the Trading PortfolioInterest rate risk outside the trading portfolio refers to the current or future risk that profitsand capitals could be negatively affected following adverse changes in interest rates.Supervision, assessment and control of interest rate risk are done by means of specificmanagement tool, such as the GAP analysis, static or dynamic, as well as the economicvalue of assets, in accordance with the standardized methodology provided by the NBRregulations.Currency RiskCurrency risk refers to the current or future risk that the Group’s profit and capital could benegatively affected, following adverse changes in interest rates between balance sheetcurrencies.The Group takes a flexible approach to the currency position management, within the limitsadmitted for this indicator.Operational RiskBanca Transilvania’s objectives regarding operational risk management are to controloperational risk, events which may occur in the Bank’s activity, to maintain a low level ofoperational risk related incidents and to ensure against such categories of risks which arenot exclusively under the group’s control.Operational risk management is a prerequisite at all organisational levels, while themanagement policies of such risks are compatible with the specificity of the business lines.The identification, evaluation and monitoring of operational risks is a continuous process,performed via:• permanent control (ongoing supervision of sensitive activities and formalizedaccounting/financial supervision) and specific instructions on operational risks (e.g.collecting and monitoring operational losses);• Periodic control.45

Banca Transilvania’s strategy for lowering exposure to operational risk is based on:permanent compliance of internal regulations with legal regulations and market conditions,personnel training, IT upgrades and consolidation of security systems, taking measures tolimit/reduce the effects of operational risk incidents, applying recommendations andconclusions resulted from the abovementioned controls, and updating continuity plans.To limit the effects of operational risk, the Bank also considered taking out specificinsurance policies.Reputational RiskReputational risk is the current or future risk that the Bank’s profit and capital may benegatively affected as a result of the unfavourable perception of the Bank’s brand bycustomers, counterparties, shareholders, investors or regulators.The Group’s objective regarding reputational risk management is to ensure themaintenance/consolidation of the Bank’s good brand image, in line with the Bank’s strategyand values.Reputational risk management is a permanent process coordinated by the structuresestablished to undertake actions to maximize the Group’s reputation, in corroboration withthe sustainable development of the Group’s business.Strategic RiskStrategic risk is the impact on earnings or capital arising from changes in the businessenvironment, adverse business decisions, improper decision implementation or lack ofresponsiveness to economic changes.Strategic risks are approached based on the following qualitative elements:• risk management practices are integral part of strategic planning;• exposure to strategic risk reflects planned objectives which are not excessivelyaggressive and are compatible with the business policies;• Business initiatives are well conceived and supported through adequatecommunication channels, operating systems and delivery networks.Banking LawsThe Bank must comply with the Banking regulations, including such applicable normsrelated to lending limits and investment activities and with the regulations regarding thecompliance with certain financial ratios. The Romanian Banking regulations have46

undergone significant changes over the last years. Amendments to the existing legislation orenactment of new regulations may bear a major negative impact on the Bank’s activity, itsfinancial conditions or operational earnings.4.3. Risks related to the Bank and the BondsBusiness Environment; Dependence on Romanian EconomyThe activity of the Bank depends on the Romanian economy, but not to a greater extent thanthe activity of the other Romanian Banks of the same size. Therefore, despite the prudentpolicy of the Bank, the financial performance of the Bank (especially its capacity toincrease its profits) depends on the development of the Romanian economy.The economic situation of Romania, afflicted by the recession it has been undergoing since2008, showed the first positive signs at the end of 2011, when it registered a slight growth.Following the financial consultancy services contracted by the Romanian Government fromthe International Monetary Fund (2009), the Government adopted a series of legislativemeasures aiming at economic reform, which led to a more stable economy in early 2011, asconfirmed by the evaluation report submitted by the IMF.Also, the International Monetary Fund has cut the government bond risk in August 2012,after most of the political conflicts had been settled once the final decision of thereferendum from 29 th of July was known, according to BNP Paribas.The IMF and Romania reached a staff-level agreement to unlock the next tranche of aprecautionary 5 billion-Euro ($6.2 billion) loan, as established on Aug. 14 after a review ofthe country’s loan accord. The leu is slightly undervalued and has scope to appreciateA possible delay in Romania’s stabilization and economic growth could be detrimental tothe macro-economic results of Romania, and consequently to the Bank’s activity, itsfinancial conditions or operational earnings.Liquidity of the Bonds and the SharesAt this time, the Bank does not intend to list the Bonds for trading on the BVB. If at somepoint in the future, the Bank does list the Bonds on the BVB, no guarantee can be givenregarding the liquidity of the Bonds or their trading value on the secondary market.Moreover, the BVB is a rather new and small stock exchange, and has the similar issues asother small stock exchanges in emerging countries with respect to the fragility and volatilityof the market and value of the quoted securities. The Bonds and the Shares may beinfluenced by these factors.In addition, the market for quoted bonds on the BVB is particularly small and characterized47

y a low level of liquidity. Furthermore, although the Shares are currently listed on theBVB, the average trading volume for the shares is very small, resulting in a very low levelof liquidity. The procedures of settlement, compensation and registration of transactionswith securities are not as efficiently developed as those on the developed securities markets.No Credit Rating of the BondsThe Bank has been evaluated and rated since 2009 by Fitch Ratings, but the Bonds subjectto the Offer will not be evaluated and rated. Investment in the Bonds may represent agreater risk than an investment in rated securities.Convertible subordinated unsecured BondsThe Romanian market is still very poorly developed with respect to bonds convertible intoshares. Therefore, practices and precedents regarding the conversion of the Bonds, as wellas other aspects involved in the issuance of convertible bonds are almost non-existent.The reduced number of bond issuances in Romania on the regulated markets resulted in anabsence of common practices and precedents regarding the protection of the bondholders'rights. Special provisions dedicated to this type of investors should also be developed.The Bonds are unsecured and, therefore, the risk of non-payment of the principal andinterest of the Bonds is not directly supported by collateral.The income from investing in the Bonds may be affected by changes in laws applicable tobonds. Please see section "Tax Matters".SubordinationWithout any prejudice to right of the investors in the Bonds subject matter of the presentProspectus to retain amounts already paid to investors in accordance with this Prospectus, inthe event of any bankruptcy or liquidation of the Issuer (whether voluntary or involuntary):(1) in accordance with the banking laws (including, without limitation Regulation18/2006, the payment of any amounts payable hereunder shall be subordinated to thefull payment of all unsubordinated indebtedness, so that no amount shall be payable tothe Bondholders in such bankruptcy, or liquidation of the Issuer, until all claims inrespect of unsubordinated indebtedness admitted in such bankruptcy or liquidation ofthe Issuer have been satisfied; and(2) following the satisfaction of all claims in respect of unsubordinatedindebtedness admitted in such bankruptcy or liquidation of the Issuer, theBondholders shall be entitled to receive and to retain any payment or distribution inrespect of the Bonds and all other amounts outstanding hereunder pari passu with anyother present and future subordinated indebtedness of the Issuer.In compliance with the NBR subordination requirements (including without limitationRegulation no. 18/2006), the Bondholders shall have no right to offset any amount owed by48

them to the Issuer against any amount owed by the Issuer to the Bondholders. Any amountrelating to the Bonds or the interest due and unpaid by the Issuer under this Prospectus canbe recovered by the Bondholders only pursuant to bankruptcy and liquidation of the Issuerand strictly in accordance with Romanian law. Likewise, the Bondholders agree that, in theevent of bankruptcy or liquidation of the Issuer, the Bonds will have an inferior rank againstthe unsubordinated indebtedness and the Bondholders assure that they will take any actionnecessary to ensure such classification.The floating interest rateA holder of a bond with a floating interest rate is exposed to the risk of fluctuating interestrate levels and uncertain interest income. Fluctuating interest rate levels make it impossibleto determine the yield of such Bonds in advance.The terms and conditions of the Bonds, including the proposed spread have been approvedby Banca Transilvania’s General Shareholders Meeting on April 27, 2012 and October 30,2012. Changes in market conditions and/or perception of BT’s risk could affect the price ofthe Bonds and consequently the corresponding yield.The Bonds may not be suitable investment for all investors.Each potential investor in the Bonds must determine the suitability of that investment inlight of its own circumstances. In particular, each potential investor should:a. Have sufficient knowledge and experience to make a meaningful evaluation of theBonds, the merits and risks of investing in the Bonds and the information containedor incorporated by reference in this Prospectus or any applicable supplement;b. Have access to, and knowledge of, appropriate analytical tools to evaluate, in thecontext of its particular financial situation, an investment in the Bonds and theimpact the Bonds will have on its overall investment portfolio;c. Have sufficient resources and liquidity to bear all the risks of an investment in theBonds including where the currency for principal or interest payment is differentfrom the potential investor’s currency;d. Understand thoroughly the terms of the Bonds and be familiar with the behaviour ofany relevant financial markets; ande. Be able to evaluate (either alone or with the help of a financial adviser) possiblescenarios for economic, interest rate and other factors that may affect its investmentand its ability to bear the applicable risks.The Bonds are complex financial instruments. Sophisticated institutional investorsgenerally do not purchase complex financial instruments as stand-alone investment.They purchase complex financial instruments as a way to reduce the risk or enhanceyield with an understood, measured, appropriate addition of risk to their overallportfolios. A potential investor should not invest in the Bonds unless it has the expertise(either alone or with a financial adviser) to evaluate how Bonds will perform underchanging conditions, the resulting effects on the value of the Bonds and the impact this49

investment will have on the potential investor’s overall investment portfolio.Independent review and adviceEach prospective investor in the Bonds must determine, based on its own independentreview and such professional advice as it deems appropriate under the circumstances,that its acquisition of the Bonds is fully consistent with its financial needs, objectivesand conditions, complies and is fully consistent with all investment policies, guidelinesand restrictions applicable to it and is a fit, proper and suitable investment for it,notwithstanding the clear and substantial risks inherent in investing in or holding theBonds.Each prospective investor should consult its own advisers as to legal, tax and relatedaspects of an investment in the Bonds. A prospective investor may not rely on the Issueror the Broker or any of their respective affiliates in connection with its determination asto the legality of its acquisition of the Bonds or as to other matters referred to above.Legal investment considerations may restrict certain investmentsThe investment activities of certain investors are subject to legal investment laws andregulations, or review or regulation by certain authorities. Each potential investor shouldconsult its advisers to determine whether and to what extent (1) the Bonds are legalinvestments for it, (2) the Bonds can be used as collateral for various types of borrowingand (3) other restrictions apply to its purchase or pledge of the Bonds. Financialinstitutions should consult their legal advisors or the appropriate regulators to determinethe appropriate treatment of the Bonds under any applicable risk-based capital or similarrules.Considerations related to the prerogatives of the general Bondholders’ meetingAccording to the laws of Romania, the general Bondholders’ meeting has the authority tohold deliberations referring to certain important events related to the Issuer, such as theissuance of new bonds or changes in the Issuer’s Articles of Association, which may affectthe Bondholders’ rights. The legal provisions in force allow the defined majorities to adoptdecisions which become binding and take effect for all Bondholders, including those whodid not attend and did not vote during the respective meetings, as well as those who votedagainst.In addition, any legal action initiated against the Issuer by one or more Bondholders will notbe admissible in case it has the same object as the legal action brought forward by therepresentative of the Bondholders or if it is contrary to any decision of the Bondholders’meeting.50

Risks related to the SharesTaking into consideration the convertibility of the Bonds into Shares below is presenteda brief description of the risks related to Shares.The market price of the Shares is volatile and could be adversely affected by future salesof Shares on the open market.The market price of the Shares is volatile and subject to sudden and significant declines.Price declines can result from a variety of factors, including the difference between theresults the Issuers announces and forecasts by equity analysts; and general share pricevolatility on the markets where the Shares are listed or on worldwide markets. As aresult, investors may experience a material decline in the market price of the Shares.A suspension of trading in the Shares could adversely affect the Share price.The CNVM is authorized to suspend or request the relevant regulated market on whichthe Shares are admitted to trading to suspend such securities from trading for variousreasons. The CNVM is further authorized to instruct the BVB to suspend trading in anIssuer’s securities in connection with measures taken against market manipulation andinsider trading. The operator of a regulated market over which the CNVM hassupervisory jurisdiction must suspend trading in securities which no longer comply withthe rules of the regulated market unless such a step would be likely to cause significantdamage to investors’ interests or the orderly functioning of the market. If the operator ofthe regulated market does not do so, the CNVM could demand the suspension of tradingin securities, if it is in the interest of the orderly functioning of the market and does notimpair investors’ interests. Likewise, the operator of a regulated market is entitled tosuspend the trading of shares in other circumstances in accordance with its own rules.Any suspension in the trading of the Shares could adversely affect the Share price.Shares traded on the BVB are less liquid and more volatile than shares traded on othermajor stock exchangesThe market for trading in the Issuer’s Shares is the regulated spot market operated bythe BVB. Shares traded on the BVB regulated market are less liquid than shares tradedon major markets elsewhere in Europe or the United States. Consequently, holders ofShares may face difficulty in buying and selling the Shares, especially in large blocks.Shares and other securities of companies trading on the BVB have in the pastexperienced substantial fluctuations in their market price. This has in the past affected,and may in the future affect, the market price and liquidity of shares of companies listedon the BVB, including the market price and liquidity of the Issuer’s Shares.51

5. INFORMATION ABOUT THE ISSUERHistory and development of the Bank5.1. Issuer’s business name and trade nameThe company’s business name is BANCA TRANSILVANIA S.A.5.2. Issuer’s place and number of registrationThe Bank is organized in Romania and registered with the Trade Register attached to the ClujDistrict Court under no. J12/4155/1993, having the Tax Identification Number 5022670.5.3 Issuer’s date of incorporation and termThe Bank is organized as a joint-stock company under the laws of Romania; in compliancewith art. 5 of the Articles of Incorporation, the Bank is established for an indefinite term.5.4. Issuer’s registered office and legal form, legislation under which it carries out itsactivityThe Bank’s registered office is located at 8 G. Baritiu Street, Cluj-Napoca, Romania. The Bankcan be contacted at the registered office or via telephone at the numbers displayed on itswebsite: www.btrl.ro or www.bancatransilvania.ro .The Bank is organized in Romania as a joint-stock company, being governed by the Romanianlaws, such as:• The Companies Law;• The Banking Law;• The Capital Market Law;• Ordinance no. 10/2004 on the judicial reorganisation and bankruptcy of creditinstitutions• All standards, regulations and circular letters issued by the National Bank of Romaniaand CNVM• Any legislation applicable to Romanian credit institutions5.5. Recent events related to the Issuer and relevant in determining its solvencyThe Bank is aware of no such recent event which could be relevant in assessing its solvency.For prudential purposes, the IFRS provisioning methodology and Profit and Loss Account forH1 2012 have been audited.Banca Transilvania’s capital adequacy ratio, including the audited profit for H1 2012 continuesto be at a comfortable level of 11.27%.5.6. InvestmentA description of the principal investments made since the date of the last published financialstatements.Information concerning the Issuer’s principal future investments, for which its management53

odies have already made firm commitments.Information regarding the anticipated sources of funds needed to fulfil previously mentionedcommitments.The investments budget for 2012 includes:Agencies and buildings41.021.000 leiIT Investments and cards:48.510.000 lei• IT Core and CRM 29.667.000 leiVehicles1.888.000 leiOther investments7.226.000 leiBank Investments98.645.000 leiInvestments in subsidiaries15.225.000 leiTotal investments113.870.000 lei6. OVERVIEW OF ACTIVITIES6.3. Main ActivitiesRetail BankingTo address the retail banking market, the Bank focuses on family needs, including bothdeposits and a large variety of loans.Term deposits are offered in a broad range of maturity options (from overnight to 18months) with fixed or variable interest rates and an option to negotiate interest rates forhigh value deposits. The market reaction to the Bank's deposit products was excellent,earning the Bank second place in Romania according to the survey conducted by Capital(financial publication).The Bank's credit facility offerings are also extensive, consisting of home loans,consumer and car loans, stock purchase facilities and student and tourist loans. Inparticular, recent developments in the Romanian economy resulted in a boom in the realestate industry. Partly due to the Bank's expansive territorial network and quickprocessing of loan applications, the Bank established an early presence on the home loanmarket, building a significant market share (9-10% currently) before other banks enteredthe market. The Bank is considered by many individuals as their "family Bank" based onan established long-term relationship.Corporate and Commercial BankingAs a commercial bank, the Bank's objective is to identify its customers' needs at an earlystage and to develop corporate & commercial finance products to offer an appropriate54

solution. This client service approach combines the product know-how with our marketknowledge and understanding.To offer products and services appropriate for individual needs and to ensure a swiftresponse to clients, specialized departments have been established at headquarter level.The Bank's nationwide network leads to efficient distribution by being close to clientsand businesses. In addition, a dedicated relationship manager is assigned to each client,offering tailor-made solutions, professional expertise and knowledge in the client'sbusiness sector.The Bank's corporate & commercial products and services target both SME's and largebusinesses, being adapted to the nature, scope and size of the corporate operations. Itincludes cash management services, comprehensive payment clearance, short to longterm credit facilities, foreign trade service and financing - including factoring, guaranteesand warranties, bills of exchange, etc.To maximize client satisfaction, the Corporate & Commercial Division works in closeco-operation with the Bank's Treasury and Settlements Division, allowing forexperienced banking officers to provide the best solutions and practices. In addition tostandard services, the Bank offers financial advisory services specifically tailored toclients, including financial restructuring. Further, through the BT Financial Group,several other financial services, such as leasing, insurance, brokerage and assetmanagement are offered.6.4. Main MarketsThe Romanian Banking System(Source: National Bank of Romania, Annual Report 2011, pages 79-81)The structure of Romanian banking system posted no significant changes in 2011. The yearunder review witnessed BCR taking over the activity of the Anglo-Romanian Bank and thetransfer of the shares held by the state in Banca de Export-Import a României (Export-ImportBank of Romania) – Eximbank from under the management of AVAS to that of the Ministry ofPublic Finance, in compliance with the provisions of Government Emergency Ordinance No.83/2011. Changes took place in the shareholding of Volksbank România S.A. whose majorityshareholder is VBI Beteiligungs GmbH and that of Marfin Bank România whose new majorityshareholder became Marfin Popular Bank Public Co Ltd. Cyprus after merging with MarfinEgnatia Bank of Greece. The names of certain credit institutions were also changed, as in thecase of the Bucharest branch of Caja de Ahorros y Pensiones de Barcelona (La Caixa), whichbecame Caixa Bank and Libra Bank turned into Libra Internet Bank.55

Therefore, compared with 2010, the number of foreign bank branches dropped by one, to eightentities at end-2011, whereas the number of Romanian banks remained unchanged, i.e. 33entities, including Central Cooperatist Bank CREDITCOOP.Table 1. Banking system by ownershipNumber of banks, end of period2010 2011Banks, Romanian legal entities,32 32of which:Banks with fully or majority state-owned2 2capitalBanks with majority private capital,30 30of which:- with majority domestic capital 4 4- with majority foreign capital 26 26Foreign bank branches 9 8Total banks and foreign bank branches 41 40CREDITCOOP 1 1Total number of the credit institutions 42 41In terms of share capital, the composition of Romanian banking system at end-2011 was asfollows: two banks with fully or majority state-owned capital (CEC Bank and Eximbank), fourbanks with domestic majority private capital (Banca Transilvania, Banca ComercialăCARPATICA, Libra Internet Bank and Banca Comercială Feroviara), 26 banks with majorityforeign capital, eight foreign bank branches and one licensed cooperative organisation (CentralCooperatist Bank CREDITCOOP).Table 2. Market share of credit institutionsEnd periodNet assets balance sheet2010 2011Mil.ron % Mil.ron %Banks with Romanian capital50 377,2 14,7 59 294,2 16,8of which:- with majority state-owned capital 25 207,4 7,4 28 990,1 8,2- with majority private capital 25 169,8 7,3 30 304,1 8,6Banks with majority foreign capital 267 075,7 78,1 265 381,6 75,0I. Total commercial banks 317 452,9 92,8 324 675,8 91,8II. Foreign bank branches 23 697,1 7,0 28 381,2 8,0Banks with majority private capital 315 942,6 92,4 324 066,9 91,6including foreign bank branchesTotal foreign-owned banks, 290 772,8 85,1 293 762,8 83,0including branches of foreign banksTotal banks and foreign bank 341 150,8 99,8 353 057,0 99,856

anches (I+II)CREDITCOOP 796,3 0,2 853,9 0,2Total credit institutions 341 946,3 100,0 353 910,9 100,0At end-2011, the share of assets held by banks with fully or majority private capital in totalassets of the Romanian banking system amounted to 91.8 percent, while banks with fully ormajority state-owned capital held only 8.2 percent. The share of assets held by banks with fullyor majority foreign capital, including foreign bank branches, equalled 83 percent of total assetsof the Romanian banking system.Table 3. The share of credit institutions in Aggregate CapitalEnd periodShare capital2010 2011Mil.lei % Mil.lei %Banks with Romanian capital3 794,8 22,4 4 166,2 22,8of which:- state-owned 1 795,6 10,6 1 848,4 10,1- with majority private capital 1 999,2 11,8 2 317,8 12,7Banks with majority foreign capital 12 632,9 74,6 13 701,4 74,9I. Total commercial Banks 16 427,7 97,0 17 867,6 97,7II. Branches of foreign Banks 393,7 2,3 295,7 1,6Total Banks with majority private 15 025,8 88,7 16 314,9 89,2capital, including foreign BankbranchesTotal foreign-owned Banks, 13 026,6 76,9 13 997,1 76,5including branches of foreign BanksTotal number of Banks and 16 821,4 99,3 18 163,3 99,3branches of foreign Banks (I+II)CREDITCOOP 122,7 0,7 126,0 0,7Total number of the credit 16 944,1 100,0 18 289,3 100,0institutionsAt end-2011, the top five banks in terms of asset size held the following shares: 54.6 percent ofaggregate assets, 52.3 percent of loans, 58.0 percent of deposits, 52.8 percent of equity capitaland 59.7 percent of government securities. In terms of bank capitalisation, share/endowmentcapital of the Romanian banks was larger from a year earlier, in both nominal and real terms, by7.9 percent and 4.7 percent respectively, due mainly to shareholders’ capital increases in cashcontributions and net profit distribution for the previous year.As regards the country of origin of the capital invested in domestic banks and foreign bankbranches operating in Romania at end-2011, the top three countries were further Greece (22.9percent in aggregate capital), Austria (20.8 percent) and well behind the Netherlands (11.5percent).57

Table 4. Foreign equity capital of credit institutions in Romania until December 31, 2011Mil. ron %Greece 4 192,5 22,9Austria 3 795,8 20,8Netherlands 2 102,3 11,5Italy 899,5 4,9Hungary 661,2 3,6Cyprus 653,9 3,6France 578,5 3,2EBRD 261,7 2,0Other countries 350,6 1,7Portugal 267,1 1,5Israel 247,8 1,4Germany 191,9 1,1SUA 152,2 0,8Aggregate foreign capital of 14 455,0 79,0the banking systemSum of the credit institutions 18 289,4 100,0In the context of Romania's EU accession and the liberalization of services, 349 foreigninstitutions have notified their intention to conduct a direct banking in Romania, of which 230banks, 3 non-bank financial institutions, 16 electronic money issuer institutions and 100 paymentinstitutions.The Economy of Romania – General InformationThe first semester of 2012 has seen a growth in GDP of 0.7% compared to the first semester of2011, according to INS (National Institute of Statistics). Harsh winter conditions dragged downeconomic activity in the first quarter (0.1% q-o-q) but growth recovered in the second quarter(0.5% q-o-q) due to robust investment and private consumption. However, the severe summerdrought, waning consumer confidence and renewed difficulties in absorbing EU funds point to ableaker outlook. Weak economic activity is expected to depress import demand, keeping thecurrent-account deficit broadly stable. Risks to growth continue to be tilted to the downside in2012 but become more balanced over the forecast horizon.GDP growth for 2012 is forecast to be relatively subdued at about 0.8%, with domestic demandas its main driver.In 2013, GDP growth should recover to 2.2%. While investment is the main component behindgrowth, it is projected to slow down compared to 2012 due to depressed activity in the rest of theEU and domestic uncertainties.58

After temporary downward pressure on headline inflation in the first half of the year, inflationincreased to 5.4% in September. Going forward, annual inflation is currently projected toaverage 4.9% in 2013 and 3.3% in 2014.6.5. The basis for any statements made by the Issuer regarding its competitiveposition.While maintaining position within a difficult economic environment, Banca Transilvania hasfocused on finding the right financial solutions for customers, thus offering improved servicesthat are adapted to the current market conditions.7. THE ORGANIZATIONAL STRUCTURE7.1. If the Issuer is part of a group, a brief description of the group and of the Issuer’sposition within it.Banca Transilvania Financial GroupThis Financial Group was established in 2003 and it is made up of 16 companies. BancaTransilvania is the main component of the group, promoting a strategy of expanding the rangeof financial services offered to customers.The Group operates in financial sectors such as banking, investment management, consumerfinance, leasing and security trading. The full spectrum of financial products, both bankingand those provided by the Group’s subsidiaries, are offered to clients through a uniquedistribution network under the far-famed BT logo.On the savings segment, in addition to traditional products, the offer also includes assetmanagement (BT Asset Management) created both for the retail market, as well as forexclusive customers, interested in customized premium products and services. Consequentlythere are excellent professional relations with high income customers, some of which areconducted by means of the Private Banking division. The offer of products is completedthrough the activities of brokerage (BT Securities) and leasing (BT Leasing), as viableoptions for direct investments or flexible financing. The credit offensive in the retail area issupported by consumer finance (BT Direct), offering easy access to potential customersthrough the distribution networks of consumer goods.Special attention is given to the medical sector, both through the existence of a specializedbanking division (Healthcare Division) and through the direct financing of various specificneeds (BT Medical Leasing). A general feature for all lines of business is represented by thegreat desire to serve clients, from the retail sector, private banking, small and medium59

usinesses, as well as corporate segment.The strategy of BT Financial Group consists of encompassing both the entire offer ofproducts and services, under the unique logo and prestigious name of Banca Transilvania onthe local market, together with serving all current and potential customers with the widestpossible range of products.The Bank provides subsidiaries with an adequate degree of capitalization by contributing tothe improvement of risk management, as well as by involving the audit and compliancefunctions of the Bank.The subsidiaries of the group, where the Bank holds direct shares and the quota ofshareholding in 2012:Subsidiary Field of activity %Directholding%TotalholdingBT Securities S.A. Investment/brokerage 98,67% 98,67%BT Leasing Transilvania IFN Leasing 44,30% 100,00%S.A.BT Investments S.R.L. Investments 100,00% 100,00%BT Direct IFN S.A.. Consumer finance 93,70% 100,00%BT Building S.R.L. Real estate 4,17% 100,00%BT Asset Management S.A.I. Assets management 80,00% 80,00%S.A.Factoring Company SRL Factoring 99,18%BT Medical Leasing IFN Leasing 99,99% 100,00%S.A.BT Leasing Moldova Leasing 100,00% 100,00%Within the group there are six other companies in which the Bank has indirect holdings (BTSolution Agent de Asigurare SRL, BT Safe Agent de Asigurare SRL, BT Intermedieri Agentde Asigurare SRL, BT Finop Leasing SA, Rent a Med S.R.L., BT Asiom Agent de AsigurareS.R.L.,.). The Bank has more holdings in two investment funds (BT Invest and BT Invest1)where the direct holding is of 91,43 %, respectively of 100.00 %.BT Leasing Transilvania IFN S.A.BT Leasing Transilvania IFN S.A. was set up in 1995 and currently operates as a non-bankfinancial institution, focusing on financing the acquisition of tangible assets by means ofleasing.The company's registered office is located at 1, George Baritiu Street, Cluj-Napoca. The60

company proposes financing solutions for customers, providing fast and simplified access tofinancial support, as well as personalized offers and financial consulting for choosing theoptimal solution.BT Leasing has offices open in several cities in the country: Cluj-Napoca, Bucharest, Oradea,Iasi, Arad, Sibiu, Brasov, Craiova, and Constanta.There were 109 employees and 2.511 contracts on December 31, 2011, respectively 108employees and 3.133 at the end of 2010, with leasing claims (mainly without VAT) inamount of 117 million lei in 2011, respectively 158 million lei in 2010.BT Medical Leasing IFN S.A.BT Medical Leasing IFN S.A. is a company based in Bucharest, specialized on the niche offinancial leasing for the purchase of medical equipment. Due to the experience in the medicalfield, over the years, Medical Leasing has extended its activity all over the country.As a result of the acquisition of shares from minority shareholders made by the Bank in 2010and the shareholding increase from 57.39 % to 99.99 %, the company changed its name fromMedicredit Leasing to BT Medical Leasing, thus becoming a BT company. In 2010, thecompany aimed to define and implement synergies with the Bank’s Healthcare Division,through the integration of products and workflows.On the background of the financial crisis, the market of equipment financed through financialleasing has significantly diminished, which has led to customers experiencing difficulties indebt repayment and, therefore, to delays.BT Leasing MoldovaThe company started its operational activity in the Republic of Moldova in 2008, withheadquarters located in Chisinau. BT Leasing MD promotes financial leasing, ensuringfinancing through leasing of motor vehicles, machinery and equipment.All processes are carried out at the registered office, in terms of sales, risk management,operational performance and customer service, as the company is not structured on branchesand agencies.In 2011, BT Leasing MD financed goods worth over 4.8 million Euro (input value), 20percent more than in 2010, while signing 179 leasing contracts. On December 31, 2011 theleasing portfolio was worth 3.4 million Euros, on the rise by 35% as compared to December31, 2010, maintaining good portfolio quality.61

BT Asset Management SAI SAThe company is specialized in the management of assets, with activities in the field of closedendand open-end fund administration. The shareholding structure is the following:• Banca Transilvania 80%• SIF Banat Crisana 10%• SIF Oltenia 10%At the end of 2011, the company was 4 th amongst investment fund administrators, with amarket share of 4.33 % and over 8,000 active investors. More than half the number ofinvestors chose the fixed-income product (BT Obligatiuni), an excellent alternative to savingsaccounts. At the end of 2011, the assets under management reached lei 295.9 thousand, on therise by more than 13% as compared to 2010.BT Asset Management offers a complete range of products and investments, such as fixedincomefunds or stock funds. Customers can invest on the capital market both in Romania andAustria, using either Ron or Euro. The continuous trend of significant increase in the value ofassets managed in 2011 occurred in the context of preserving the attractiveness of products,attractiveness given by the efficiency reported within a good economic environment whichstill remains difficult.BT Direct IFN SABT Direct was established in 2003, as a limited liability company under Romanian laws, withregistered offices in Cluj-Napoca. During the General Shareholders Meeting of July 4, 2006,it was decided to turn BT Direct from a limited liability company into a non-bank financialinstitution, in order to comply with provisions related to its operations.BT Direct offers financing services for the purchase of durable goods through related creditagreements and credit for personal use.In 2011 there were 11.613 contracts, 8.871 of which had related credit agreements, amountingto 18.1 million lei, respectively 2.760 credit contracts for personal needs, amounting to 20.2million lei. BT Direct signed cooperation agreements for financing active customers with anumber of 738 shops. The total value of revenues for 2011 increased by 16 % compared tothe value achieved in 2010, the company registering positive annual results.BT Investments SRLBT Investments was established in 2002 by the Bank for the purpose of granting contractloans. In 2006, the company redefined its activity based on NACE code 6619 - Otheractivities auxiliary to financial services, except insurance and pension funding. Since itsestablishment, the share capital increased successively by means of capital inflow orcapitalization of reserves, reaching 50,939 thousand lei as at December 31, 2011.62

Until December 31, 2011 the units held reached 55,417 thousand lei. On establishing thevalue of the securities held by the company the evolution of the market stock was taken intoaccount, with provisions constituted for negative differences.BT Securities S.A.It was established in 2003 as a result of changing the name and registered offices ofTransilvania Capital Invest company. The shareholding structure is as follows: 98.61% heldby the Bank, 1.39 % natural and legal persons. The company’s activity consists of theintermediation of financial transactions and auxiliary activities.In 2011, BT Securities carried out its activity while the Romanian capital market wasundergoing a crisis period. The main companies quoted on the stock exchange registeredsharp falls of stock quotations, in conjunction with a dramatic drop in transaction volumes.During the second half of the year, the progress of mediation activities was stronglyinfluenced by the economic crisis, displayed by the decrease of transaction values and fall ofthe average percentage of commissions charged to customers.Compania de Factoring S. R. L.In 2011, Compania de Factoring kept the trend of the previous year, aiming to reachmaximum efficiency for the collection process.As a result, Compania de Factoring managed to partially recover overdue amounts worth991.318 lei.The management of the company continues to apply the necessary measures in order tosupport the development of its activity, despite current market conditions, by:• Restructuring certain bank loans;• Improving the level of recovery of the credits granted to customers;• Constant monitoring of liquidity;• Daily tracking of flows of treasury and the evaluation of effects upon the creditors.63

The Bank’sORGANIZATIONAL STRUCTURE7.2. If the Issuer is dependent upon other entities within the groupBanca Transilvania is not dependent on any entity within the Banca Transilvania FinancialGroup.64

ORGANISATIONAL CHART OF BANCA TRANSILVANIA FINANCIAL GROUPEntities of Banca Transilvania Financial Group at whichBanca Transilvania has direct ownership65

Entities of Banca Transilvania Financial Group whereBanca Transilvania has indirect ownership and thesubsidiaries which ensure its participation66

8. INFORMATION ON TRENDS8.1. Statement that there has been no material adverse change in the prospects of theIssuer since the date of its last published audited financial statements. In the event thatthe Issuer is unable to make such a statement, provide details of this material adversechange.The Bank declares that there has been no material adverse change in the prospects ofthe Bank since the last published audited financial statements, respectively 31 st ofDecember 20118.2. Information on any known trend, uncertainty or requirement or any commitmentor event that could significantly influence the Issuer's prospects, at least for the currentfinancial year.The Bank is not aware of any tendency, commitment, or event which may have a negativeeffect upon the Issuer’s prospects for the financial year in progress.67

9. BODY OF ADMINISTRATION, MANAGEMENT AND SUPERVISORYThe management of the Bank is carried out by the Board of Directors and the managers. Thecorrespondence address for Board of Directors members and managers of the Bank is:Cluj-Napoca, str.G.Baritiu, nr.8According to Bank’s Articles of Association, the Board of Directors has 7 members.The current composition of the Board is the following:NameCiorcila HoriaMarzanati RobertoFranklin Peter MorrisRetegan CarmenPalagheanu Radu DanutCeocea CostelPositionChairman of the Board of DirectorsVice-Chairman of the Board of DirectorsNon-Executive member of the Board of DirectorsNon-Executive member of the Board of DirectorsNon-Executive member of the Board of DirectorsNon-Executive member of the Board of DirectorsMr. Horia Ciorcila was born in 1963 in Cluj-Napoca and graduated from the Faculty ofAutomation and Computer Science in 1989. In 1993 he participated, as a founding member,in the establishment of the Bank and certain companies within the BT Group (financialactivities such as insurance, leasing etc.). He also participated as founding member in otherbusinesses, such as the group of companies Maestro Industries and Astral TV.He has been a member of Banca Transilvania’s Board of Directors since the very beginningand starting with 2002, he is Chairman of the Board.Mr. Roberto Marzanati was born in 1950 and graduated from the Business AdministrationSchool of Torino, Italy. He began his banking career in 1973 and gained impressiveprofessional expertise with several banking institutions such as Hypo-Alpe Adria Bank(Croatia) as a member of the Supervisory Board, Market Banka (BiH) as a member of theBoard of Directors, and Raiffeisen Bank Sarajevo. He was also a member of the SupervisoryBoard of Slavonska Banka (Croatia) and a member of its Credit Committee (appointed inJuly 2001), and between 2001 and 2008 he served on the Board of Directors of Export CreditBank, Skopje, Macedonia. In 1993, Mr. Marzanati became Senior Consultant within EBRDLondon, and in 1997 he became Senior Banker. In 2002, he was appointed member on BancaTransilvania’s Board of Directors.68

Mr. Peter Morris Franklin was born in 1953 in Hong Kong. In 1974 he graduated fromOxford University, United Kingdom. The banking career of Mr. Peter Morris Franklin beganin 1979 at HSBC - London and Hong Kong and in 1980 he became Vice-President ofCorporate Banking - London. In 1984 he was appointed Vice-President of the CapitalMarkets at Chase Manhattan Bank - Hong Kong and, in 1987, Manager of the CapitalMarkets of ANZ Bank - Hong Kong. In 1992 he was treasurer of GE Capital Asia Pacific,Hong Kong & Singapore and in 1997 he was appointed Financial Manager. He becameFinancial Manager of GE Consumer Finance Europe – Dublin in 2000, while in 2002 heaccepted the same position within GE Real Estate Europe - Paris. He was Financial Managerof GE Corporate Financial Services Europe – London from 2006 until 2008, when he took onthe same position at GE Money Central Eastern Europe - Paris.He has been a member of BT’s Board of Directors since April 2010.Mrs. Carmen Retegan was born in 1959 in Galati. In 1982 she graduated from the Facultyof Electronics and Telecommunications of the Polytechnic University of Bucharest laterattended The School of Business Management William E. Simon of the University ofRochester. She started her career in 1996 within Seattle Northwest Securities - Seattle USA asPortfolio Manager of mortgage-backed securities. In 1998 she became Manager of CapitalMarkets at Creditanstalt Investment Bank Austria, Bucharest. In 2002 she was appointedGeneral Manager of the Romanian American Enterprise Fund - Bucharest - and served asMember on the Board of Directors (BoD). Starting with 2008 she is the General Manager anda BoD Member of Verida Credit IFN – Bucharest. She has been a member of BT’s Board ofDirectors since April 2010.69

Mr. Radu Danut Palagheanu was born in 1951 in Cluj-Napoca. In 1976 he graduated fromthe Faculty of Electrical Engineering within The Polytechnic Institute of Cluj-Napoca. Hestarted his career in 1977 - within I.S.C.I.P. as Head of Mechanical-Energy Sector - Cluj-Napoca. In 1985 he was transferred to the Regional Centre for Electronic Computing asExpert Instructor – Cluj-Napoca and starting 1990 - The Territorial Directorate for Matters ofLabour and Social Protection - as Head of the Labour Norms Office - Cluj-Napoca. In 1991he pursued a career in the private sector as General Manager of S.C. Compexit Import ExportS.R.L. – Cluj-Napoca - and in 1992 as General Manager at S.C. Snowmobiles CompexitS.R.L. – Cluj-Napoca. He was one of Banca Transilvania’s founding members in 1993.He was a member of the Bank’s Board of Directors (BoD) from 1994 to 1995, while in 1995he became the General Manager of S.C. Compexit Trading S.R.L. Cluj-Napoca. From April2010, Mr. Palagheanu regained his capacity as BT’s BoD member.Mr. Costel Ceocea was born in 1956 in Buzau. He is a graduate of the Faculty of Economicsfrom "Alexandru Ioan Cuza" University - Iasi and in 2004 he was awarded a Phd in IndustrialEngineering from the "Gheorghe Asachi" Technical University - Iasi. He began his activity in1976 at CCH Letea Bacau, and in 1981 he became a member of the County Council of Bacau.In 1991 he was employed by the Chamber of Commerce and Industry of Bacau as officer,being promoted as Head of Department – The Department of Domestic and InternationalRelations. In 1994 he was transferred to the Financial Investment Company "Moldova" S.A.occupying the positions of Officer, Head of Department (1997), Manager (2001), Vicepresident(2005) and Deputy General Manager within the same institution. In 2008 he becamethe President and General Manager of the Steering Committee for the Board of Directors ofthe Financial Investment Company "Moldova" S.A.He has been a member of BT’s Board of Directors since April 2010.Executive Management:The Executive Management Committee (ECM):Last name/First name PositionVacancyCEOTarcea NicolaeDeputy CEOToderici Leontin COOPojoca Lucia Ana Executive Manager/Coordination OradeaDudoiu AndreiExecutive Manager/Coordination BucharestNistor Gabriela Cristina Executive Manager/RetailMoisa TiberiuExecutive Manager/Corporate&SMEBucur Ioan Calin Executive Manager/Risk ManagementRuncan Luminita Delia Deputy CEONadasan Mihaela Simona Executive Manager/Financial Institutions and International70

Doca Nevenca ZorancaRelationsExecutive Manager/Human ResourcesNicolae Tarcea (born 1960) has been working within the Bank since 1996, currentlyoccupying the position of Deputy CEO. During 1997-2002 he was the Manager of the LegalDepartment, offering legal advice, endorsing legal documents and assisting the Bank’smanagement.Moreover, within the Bank he occupied the following positions: Vice-president – member ofthe Steering Committee, Secretary of the Board of Directors and Legal Adviser - Head of theLegal Department. In 1992, he graduated from the Faculty of Law, specialized in LegalStudies, and in 1985 he graduated from The Polytechnic Institute of Cluj-Napoca, beingtrained in Electrical Engineering.Leontin Toderici (born 1970) graduated from the Technical University of Cluj-Napoca,Faculty of Automation and Computer Science, Computer Department in 1994 and from theFaculty of Economics, Banking and Financial Management Department in 2003. In 2005 hecompleted the master studies within the "Executive Master of Business Administration”program, under the patronage of CNAM Paris and Academy of Economic Studies -Bucharest, and in 2004 he was awarded a PhD by Babes-Bolyai University of Cluj-Napoca,Faculty of Economic Studies, in the field of Computer Science for Economics. Since 1996 heis part of the Banca Transilvania’s team, having occupied the following positions: systemsengineer within Cluj Branch (1997), analyst programmer within BT Headquarters (2000),Settlements Manager within BT Headquarters (2005), Manager - Deputy Chief OperationsOfficer within BT Headquarters (2005), and since November 2005 he is Executive Manager -Chief Operations Officer.Lucia Ana Pojoca (born 1960) began working at Banca Transilvania in 1994, becomingBranch Manager - Banca Transilvania Oradea (2003), respectively Regional Manager (2005),and in February 2005 she was appointed Executive Manager, Member of the ManagementCommittee. She graduated from Babes-Bolyai University – Faculty of Economics – Cluj-Napoca, specialized on Finance Accounting and in 2005 she was awarded a PhD degree bythe University of Agricultural Sciences and Veterinary Medicine of Banat - Timisoara.Andrei Dudoiu (born 1974) and graduated in 1997 from the Academy of Economic Studiesof Bucharest, Faculty of Finance, Banking and Accounting. He completed the ExecutiveMBA program of ASEBUSS Bucharest & Kennesaw State University in 2005, obtaining hisExecutive MBA from the University of Chicago Graduate School of Business in 2007. Heworked for ABN AMRO Bank (Romania) as Head of Relationship Managers, respectivelyAssistant Relationship Manager (2001) and as Manager of Sibiu Branch (2002), becoming apart of Banca Transilvania’s team in 2002. During December 2002 - November 2005, he71

occupied the position of Corporate Banking Manager, respectively Corporate and SME ClientManager and, since November 2005, he is Executive Manager, coordinating BT’s activities inthe areas of Bucharest and Ilfov.Gabriela Cristina Nistor (born 1966) graduated in 1988 from the Faculty of Economics,“Al. I. Cuza” University of Iasi. She started her activity in: 1988 in the company SC MaratexSA Cluj, in 1990 she was part of the team of SC Petrom SA Cluj, and starting with 1992 sheworked for the Municipality of Cluj. She joined Banca Transilvania’s team in 1995 as CreditOfficer, in 1997 she became Marketing Manager, in 1999 - Card Division Manager, in 2003 -Card Sales Division and Product Development Manager, and in 2005 - Retail BankingManager. She has been Retail Banking Executive Manager since February 2008.Tiberiu Moisa (born 1975) graduated in 1998 from The Academy of Economic Studies(ASE), Bucharest, Faculty of Finance, Banks and Stock Exchanges. Moreover, in 2007 hegraduated from the INDE Institute, the Executive MBA program organised by ASE Romaniaand CNAM France. In 1998 he began his activity within the National Bank of Greece,Romania, as Account Administrator (1998), as Compensation Officer (1999), respectivelyHead of the Operations Department (2000). He continued the banking activity at ABNAMRO Bank, as Operations Manager (2001) and Account Manager (2002) within SibiuBranch, and starting 2002 he occupied the position of Branch Manager - Tg. Mures. Hejoined the team of Banca Transilvania in 2002 and is currently Corporate and SME ClientExecutive Manager, member of ALCO, the Human Resources Committee, and he is also theCoordinating Manager of the two foundations established by BT “Clubul IntreprinzatoruluiRoman” (The Romanian Entrepreneurs Club) and “Clujul Are Suflet” (Cluj Has Soul).Ioan Calin Bucur (born 1967) graduated in 1992 from the Faculty of Economics withinBabes-Bolyai University, Cluj-Napoca. He started his activity in 1991 at The GeneralDirectorate of Public Finance of Cluj, as Duty and Tax Inspector, and in 1993 occupied theposition of Credit Inspector at BCR Cluj. He joined the team of Banca Transilvania in 1995as Credit Mediator, Head of Credit Department, and Deputy Manager of the Cluj Branch. In1997 he became Executive Manager of SC Stock Invest Cluj, and starting from 1999 heoccupied several positions at Banca Transilvania, respectively Auditor - Internal AuditService (2000), Clerk (2003) – Credits Division, as Clerk Coordinator (2005), Manager(2009), and since February 2009 he is Executive Manager of the Risk ManagementDepartment.Delia Luminita Runcan (born 1970) graduated in 1993 from the Faculty of EconomicSciences at the Babes-Bolyai University of Cluj-Napoca and the Faculty of Law of Cluj-Napoca, of the „Dimitrie Cantemir” Christian University of Bucharest, in 2001. She startedher activity at Banca Transilvania, as Arbitrator within the Treasury Department. In 1995 she72

ecomes the Head of the Arbitration Department, and starting from 1997 she becomesTreasury Manager. She is also a member of the Technical Committee for the Management ofBanking Risks, ALCO and secretary of CTALCO. Between 2009-2013 she was the ExecutiveManager – Treasury and this year (2013) she has been appointed Deputy CEO of BancaTransilvania.Mihaela Simona Nadasan (born 1971) graduated in 1995 from the Faculty of Economics,Babes-Bolyai University of Cluj-Napoca, Finance and Banking, and in 2005 she graduatedfrom L'Institut d'Étude du Développement Economique (Conservatoire National des Arts etMetiers - Paris, and ASE Bucharest), obtaining a diploma in Executive Master of BusinessAdministration. Her banking experience includes the activity of dealer at Dacia Felix BankCluj-Napoca and, starting with 1995, at West Bank Cluj-Napoca. In 1998 she joined the teamof Banca Transilvania as Treasury Officer. Since January 2009 she has occupied the positionof Executive Manager – Financial Institutions and International Relations, where shecoordinates the entire activity connected to relations with financial institutions andcommercial banks from Romania and abroad, the management of financing lines obtained byBanca Transilvania in foreign currency, the management of exposure limits on counterpartybanks.Nevenca Zoranca Doca (born 1972) graduated in 1995 from the University of Bucharest,Faculty of Biology, specialized on Medical Biology, and in 1996 she completed the programof master studies, specialized on Neurobiology - Human Behaviour, from the Faculty ofBiology, University of Bucharest. She started her professional activity within the companyItaloromedica in 1995, as a Supervisor on Quality Assurance and Control, and starting from1998, she worked for ABN AMRO Bank as Human Resources Assistant, Human ResourcesOfficer, and Human Resources Manager at national level. She joined the team of BancaTransilvania starting from 2002 as Human Resources Manager, and since February 2009 shehas occupied the position of Executive Manager - Human Resources.There is no potential conflict between the responsibilities of the members of the Board ofDirectors and the Executive Management Committee of the Bank and their personal interestsand/or other responsibilities.10. THE FUNCTIONING OF THE ADMINISTRATION AND MANAGEMENTBODIESAudit CommitteeIn accordance with the applicable legal provisions and in order to carry out the dutiesregarding the internal audit, the Board of Directors decided to set up an Audit Committee,formed by members of the Board of Directors who do not hold management positions. At73

present, the Audit Committee consists of the following non-executive directors:- Peter Franklin- Retegan Carmen- Roberto MarzanatiThe Audit Committee is headed by a President elected by its members. It meets wheneverrequired and related discussions are written down.The following persons may be invited at the Audit Committee meetings: Internal AuditManager, Financial Auditor, external consultants or other relevant persons.The Committee preapproves all the audit services as well as the authorized services providedby the external auditor.The Audit Committee has the following responsibilities entrusted by the Board of Directors,according to the activity:Financial statements• Examining significant accounting aspects, reporting and understanding their impact onthe financial statements; such aspects include:-Important matters concerning the accounting principles and the presentationof financial statements, including any significant changes of the Bank’sdecision regarding the choice or the application of the accounting principles;• Examining the analysis prepared by the management and/or by the financial auditor,containing significant reporting aspects and statements in relation to the preparation ofthe financial statements, including analysis of the effects of the alternative GAAPmethods on the financial statements;Internal Control• Understanding the purpose of examination of the financial statements by the externaland internal audit and obtaining reports and recommendations in relation to theidentified issues, along with the management responses (best practice);Internal Audit• Examination - together with the management and the Internal Audit Manager - ofoperations, audit plans, activities, personnel and structure of the internal auditfunction;External Audit• Examination of the proposals made by the external auditor regarding the auditpurpose and approach method, including the coordination between external andinternal audit;• Ensuring the external auditor's independence, in accordance with the requirements ofAudit International Standards;• Organising regular meetings with the external auditor in order to discuss issues thatshould be treated in private, according to the opinion of the committee or of theauditors.Reports74

• Providing means of open communication between the internal audit, the external auditand the Board of Directors;Other responsibilities• Examination and annual assessment of compliance with the Committee’s rules oforganization, requesting the Board of Directors’ approval for any proposed changesand ensuring appropriate communication in accordance with the applicable legalprovisions.• Providing an annual confirmation that all the responsibilities referred to in these Rulesof organization and functioning have been properly carried out;• Monitoring internal auditors and financial auditors;• Proposal/appointment/revocation, as follows:o Recommendation addressed to the Remuneration Committee for theapproval/dismissal of the Internal Audit Manager, for establishing theremuneration and the variable part of the salary (including annual performanceincentives) as well as the activity evaluation system.o The approval/dismissal proposal regarding the financial auditor (external),including the remuneration proposal is addressed to the bodies withsupervision attributions;• Reviewing and approving the activity coverage of internal audit and financial audit(external), the audit assignment frequency and the annual audit plan;• Reviewing audit reports and establishing (as appropriate) the measures to be adoptedby the executive management and ensuring that the bodies with managementresponsibilities adopt and implement the necessary measures in order to solve thedeficiencies identified during the control and compliance activity, as well as otherissues identified by the auditors.Remuneration Committee:It is a body under the authority of the Board of Directors, established with the purpose todeliver competent and independent opinions regarding the remuneration policies andpractices.The composition of the Remuneration Committee is:- The Chairman of the Board of Directors- 2 Members of the Board of Directors.It analyses and ensures that the policies and the general principles of remuneration, as well asstaff benefits are in line with Banca Transilvania’ business strategy, its long term objectives,values and interests.The Remuneration Committee meets at least twice a year, or whenever it is necessary, uponthe request of one of its members or of the Bank’s management.Executive Management Committee (EMC):75

EMC members are responsible for the Bank’s management in such a manner so as to meetbusiness practice requirements and to the best interest of the Bank, by taking into account theshareholders’ return, the image of the Bank and the public interest. Key principles of activityare transparency, honesty, prudence and profit maximisation.EMC members are jointly and individually responsible before the Board of Directors for theexercise of assigned duties.EMC consists of 11 members: the General Manager, the Deputy General Manager and 9Executive Managers: Operations Manager (COO), Corporate and SME Manager(CC&SMEs), Retail Banking Manager (RB), Regional Manager Bucharest (DEB), RegionalManager Oradea (DEO), Risk Manager, Deputy CEO 2, Financial Institutions andInternational Relations Manager, Human Resources Manager.EMC decisions are communicated by the EMC secretary to the specialised departments,technical committees in the Headquarters and branches, by indicating the deadlines and thetasks to be accomplished.Committee for the Review of Internal Rules:The Committee has the following composition:- A non-executive member of the Board of Directors ;- General Manager;- Deputy General Manager.The Committee submits to the Board of Directors a summary of amendments or new rulesproposed for approval.The Board of Directors will ensure that the implementation of internal rules is observed at thelevel of the Management Committee, on the basis of specific indicators and of half-yearreports highlighting the results of such implementation.Technical Committee for the Management of Banking Risks (CTARB):The Committee is appointed by the EMC and consists of 7 members: General Manager,Deputy General Manager, Operations Manager (COO), Regional Executive ManagerBucharest (DEB), Regional Executive Manager Oradea (DEO), Risk Manager (ExecutiveSecretary of the Technical Committee), Deputy CEO 2.The Technical Committee for the Management of Banking Risks exercises the riskmanagement function as a collective body; its members exercise a part of the specific rightsrelated to risk management in their field of activity. The Technical Committee for theManagement of Banking Risks meets every month or whenever the situation requires in orderto analyse the reports/materials in which the Bank’s specialized departments present specialevents or the evolution of certain indicators which are different from the policies, theforecasting and the indicators established by the Bank as being relevant for the normal courseof activity (with reference to the pre-determined limits) and to take the appropriate decisions.76

Technical Committee for the Management of Assets and Liabilities (ALCO):The Committee is appointed by EMC and has the following structure: General Manager;Deputy General Manager; Operations Manager (COO), Risk Manager, Retail Manager;Corporate and SME Manager, Financial Institutions and International Relations Manager,Deputy CEO 2 (Executive Secretary of the Technical Committee).The Financial Manager and the Manager of Budget and Planning Department have the qualityof permanent guests.The Technical Committee for the Management of Assets and Liabilities receives informationand reports from the specialized departments. The committee examines the documentationand makes decisions concerning the management of interest rate risk, currency risk, liquidityrisk and price risk, for the purpose to ensure the appropriate management of the Bank’s assetsand liabilities. The decisions contain specific deadlines and responsibilities.Technical Committee for Audit, Compliance and Internal Control (CTACCI):The Technical Committee for Audit, Compliance and Internal Control consist of 5 members:Deputy General Manager (coordinator of the internal control system - executive secretary ofthe committee); General Manager; Risk Manager; Regional Executive Manager Oradea(DEO); Regional Executive Manager Bucharest (DEB).The decisions of the Committee are adopted by half plus one of the members which form thecommittee. The Technical Committee for Audit, Compliance and Internal Control examinesthe acts of control of the Internal Audit Department, the Department for Risk CreditInspection, the Compliance Department, the Electronic Channels Division, of the Departmentfor Operational Risk Management and of other departments in charge with internal controland make decisions to remedy the identified deficiencies.Technical Committee for the Approval of Internal Rules (CTARI):The composition of the Technical Committee for the Approval of Internal Rules is thefollowing: Deputy General Manager (Executive Secretary of the Technical Committee);Executive Manager (COO); Executive Manager (CC&SMES); Executive Manager (RB);Executive Manager (Risk Management).The committee receives the documentation for endorsement/approval of internal rules andexamines its contents. It ensures the compliance with the internal rules in accordance with thelegal provisions in force.Technical Committee for Operational Risk (CTRO):The Technical Committee for Operational Risk focuses mainly on risk management inoperations and its membership is the following: General Manager, Deputy General Manager,Executive Manager (COO) (executive secretary of the Technical Committee); ExecutiveManager - Risk Management.77

The Technical Committee for Operational Risk receives information and reports from thespecialized departments in the Head Office and branches, it analyses the documentation andmakes decisions concerning operational risk or submits proposals to other TechnicalCommittees under the supervision of the Executive Management Committee or to theExecutive Management Committee based on competence.It communicates the measures to be implemented by departments in the Head Office/branchesand monitors their implementation within the established deadlines.Technical Committee for Credit Policy and Approval (CTPAC):The main objective is to establish BT’s lending policy and to approve loans with value orconditions exceeding the competence of other departments or persons within the Bank. TheTechnical Committee for credit policy and approval has the following members: GeneralManager; Deputy General Manager; Executive Manager – Corporate & SME Clients (forlegal persons) - executive secretary of the technical committee; Regional Executive Manager(for natural persons); Executive Manager – Risk Management; Executive Manager – COO;Regional Executive Manager (DEB); Regional Executive Manager (DEO).Technical Committee for Human Resources (CTRU):The Technical Committee for Human Resources was created in order to increase efficiencyand focus in making decisions regarding BT employees. The Technical Committee forHuman Resources is composed of: General Manager; Deputy General Manager; ExecutiveManager (COO); Executive Manager - Retail Banking; Executive Manager - Corporate andSME Clients; Regional Executive Manager Bucharest (DEB); Executive Manager - HumanResources - executive secretary of the technical committee; Status of attendees: DeputyManager for Human Resources, Deputy Manager for Human Resources (Bucharest) and arepresentative of the employees.Credit and Risk Committees in the Head Office (CCR1 and CCR2):The main objective of the Credit and Risk Committees in the Head Office is to analyse and toapprove loans, respectively to restructure loans according to the competences granted by theExecutive Management Committee.The Technical Committee for credit policy and approval mandates CCR1 and CCR2 with thecapacity to approve loans (the competence is set in specific internal regulations).Membership of the Credit and Risk Committee 1 (CCR 1)The members of the Credit and Risk Committee 1 (CCR 1) are:- deputy manager of DMRC/coordinator of risk analysts / designated substitutes;- management of the Corporate Client Credit Department, SME Department, HealthcareDivision and Retail Credit Department, within the HO- Heads of Services within the Corporate Client Credit Department/ Manager of the CorporateClient Credit Department/designated substitute; SME Clients Department Manager/ deputy78

manager for SME loans/ designated substitute for SME clients; deputy manager of theHealthcare Credit division/ designated substitute for Healthcare division clients; Deputymanager for retail loans/ designated substitute for retail clients; legal advisor / designatedsubstitute.Membership of the Credit and Risk Committee 2 (CCR 2):- deputy general manager / designated substitute- manager for Risk Management, deputy manager of DMRC/designated substitute- management of the Corporate Client Credit Department, SME Department, HealthcareDivision and Retail Credit department within the HO: Manager of Corporate Client CreditDepartment/designated substitute; SME Department Manager/ deputy manager for SMEloans/designated substitute for SME clients; deputy manager of the Healthcare Creditdivision/ designated substitute for Healthcare division clients; Deputy manager for retailloans/ designated substitute for retail clients; legal advisor / designated substitute.It analyses and approves the loan requests of the branches in RON and foreign currency,which fall under their competence, based on the information contained in the loan reports/Credit risk assessment forms.Credit and Risk Committee in branches/agencies (CCRS/CCRA);The main objective of the Credit and Risk Committees in branches/agencies is to analyse andapprove loans, respectively to restructure loans according to the competencies granted by theEMC.The membership of the Credit and Risk Committee is established to cover staff size andstructure in BT branches.There are 3 types of credit and risk committees at branch level:a. Credit and Risk Committee approving loans to Corporate clients – no. of members: atleast 3 persons.b. Credit and Risk Committee approving loans to SMEs, family associations orauthorized natural persons – no. of members: 3 persons.c. Credit and Risk Committee approving loans to natural persons.CCR members are:- Branch manager/ Deputy branch manager;- Head of retail/ retail coordinator/ head of retail loans;- Credit analyst/ client advisor / head of agency (for the documentation related to thecoordinated agency);- Legal advisor (specialized consultant, at the request of the Credit and Risk Committeewithout voting right).Membership of the Credit and Risk Committee in Agencies:79

The structure of the Credit and Risk Committee at agency level, both for natural persons andlegal persons, is the following:- Head of agency;- SME advisor (credit analyst) / retail advisor.The decision to grant lending competences is valid as long as the head of agency is present;otherwise the credit documentation is submitted for approval to the Credit and RiskCommittee of the Branch.The SME advisor and the Retail Banking advisor may replace one another, when one of themis missing.Cost Control Committee (CMC):The Cost Control Committee has been created at the initiative of the Executive ManagementCommittee. The membership of the Cost Control Committee is the following: chairman:Financial Manager; members: General Manager; Executive Manager (COO); Head of theOffice for Financial Analysis; Manager of Investments and Logistic department (in positionof executive secretary of the committee).The committee meets at least once a month or whenever it is necessary.The committee has the following responsibilities: examination of effective operating costs percomponents, with focus on the segments incurring the highest expenses, identification ofcauses for unjustified costs, making proposals and decisions for cost reduction.Operations Steering Committee (OSC)OSC is responsible for coordinating, recommending and reviewing changes in variousoperational areas in order to streamline BT’s activity.The committee members are: General Manager, Deputy General Manager, ExecutiveManager - COO, Executive Manager - Retail Banking, Executive Manager - Corporate andSME clients/ Business Banking Manager, Project Management and IT managers.Any department manager within BT Head Office may attend the meetings of OSC.. Mr. Nicolae Tarcea as legal representative of Banca Transilvania, I declare that BancaTransilvania fulfils the corporate governance regime in force in Romania.80

11. MAIN SHAREHOLDERSAs at 30.12.2012, the shareholder structure was the following:No. of persons No. of Shares Percentage %ROMANIAN CAPITAL 25,956 939,705,008 49.38Natural persons 25,308 438,899,234 23.06Legal persons 648 500,805,774 26.32FOREIGN CAPITAL 770 963,337,405 50.62Natural persons 641 54,140,207 2.84Legal persons 129 909,197,198 47.78TOTAL 26,726 1,903,042,413 100Shareholders’ Register as at 30.12.2012.Significant ShareholdersThe EBRD is the only shareholder owning more than 10% of the Bank’s share capital,notably 278.100.206 Shares representing 14.6134%. The EBRD is an international financialinstitution owned by 63 countries, the European Community and the European InvestmentBank.A description of the agreements known by the Issuer, which may generate at a later datea change of control over the Issuer.Not applicable.12. FINANCIAL INFORMATION ON THE ASSETS, FINANCIAL STATEMENTSAND REPORTS OF THE ISSUER12.1.Historical financial informationBanca Transilvania is part of the Banca Transilvania Financial Group, which includes theparent-Bank and its subsidiaries headquartered in Romania and in the Republic of Moldova.The Group’s financial statements for the fiscal year ended 31 December 2011, 31 December81

2010 and 31 December 2009 consist of the financial statements of Banca Transilvania S.A.and those of its subsidiaries, which together form the Group. The subsidiaries include thefollowing entities:Subsidiary Field of activity 31December2011BT Securities S.A. Investments 95,50%BT Leasing Transilvania IFN S.A. Leasing 100,00%BT Investments S.R.L. Investment 100,00%BT Direct IFN S.A.Other lending activities (consumer 100,00%loan)BT Building S.R.L. Investments 100,00%BT Asset Management S.A.I. S.A. Asset Management 80,00%BT Solution Agent de Asigurare S.R.L. Insurance and Pension Houses 95,00%Related ActivitiesBT Asiom Agent de Asigurare S.R.L. Insurance and Pension Houses 95,00%Related ActivitiesBT Safe Agent de Asigurare S.R.L. Insurance and Pension Houses 99,98%Related ActivitiesInsurance and Pension HousesRelated ActivitiesBT Intermedieri Agent de Asigurare99,99%S.R.L.BT Account Agent de Asigurare S.R.L. Investments 100,00%BT Compania de Factoring S.R.L. Factoring 100,00%BT Finop Leasing S.A. Leasing 51,00%BT Consultant S.R.L Financial Brokerage 100,00%BT Evaluator S.R.L. Financial Brokerage 100,00%Medical Leasing IFN S.A. Leasing 100,00%Rent-a- Med S.R.L. Rental of medical equipment 100,00%BT Leasing MD S.R.L. Leasing 100,00%BT Transilvania Imagistica S.A.Other activities related to humanhealth91,43%Consolidated Profit and Loss AccountFor the year ended 31 December2011thousand2010thousand Lei2009thousand82

LeiLeiInterest income 1.856.372 1.894.260 2.109.440Interest expenses -921.954 -897.963 -1.355.111Net interest income 934.418 996.297 754.329Fee and commission income 436.026 421.645 417.098Fee and commission expense -53.868 -46.735 -46.293Net fee and commission income 382.158 374.910 370.805Net trading income 111.613 118.969 143.201Other operating income 61.524 51.719 48.316Operating income 1.489.713 1.541.895 1.316.651Net impairment losses on assets, other -315.849 -646.965 -490.784liabilities and credit commitmentsStaff expenses -390.262 -373.371 -348.999Depreciation expenses -63.787 -60.897 -68.042Other operating expenses -364.386 -306.888 -299.957Operating expenses -1.134.284 -1.388.121 -1.207.782Share of profits/(losses) in associates 0 4.741 10.298Profit from the sale of associates and- 38.596jointly controlled companiesProfit before tax 355.429 158.515 157.763Income Tax expense -58.181 -24.531 -21.048Profit for the year 297.248 133.984 136.715Profit for the year attributable to:Equity holders of the Bank 297.019 133.794 138.323Non-controlling interests 229 190 -1.608Profit for the year 297.248 133.984 136.715Basic earnings per share 0,1840 0,0801/0,0978 0,1038Diluted earnings per share 0,1840 0,0801 0,1038The financial statements included in the Consolidated Profit and Loss Account for thefinancial year ended 31 st December table, have been auditedConsolidated statement of comprehensive incomeFor year ended 31 December2011thousandLei2010thousand Lei2009thousandLeiProfit for the year 297.248 133.984 136.715Other comprehensive income, net ofincome tax83

Fair values gains/(losses) from -15.820 7.263 44.405available for sale investments (net ofdeferred tax)Other elements of comprehensive 20.906 5.494 2.950income, net of taxRevaluation reserve for fixed assets - 6.116 -Total comprehensive income for the 302.334 152.857 184.070periodTotal comprehensive incomeattributable to:Equity holders of the Bank 302.127 153.024 186.692Non-controlling interest 207 -167 -2.622Total comprehensive income for theperiod302.334 152.857 184.070The financial statements included in the Consolidated statement of comprehensive incomefor the financial year ended 31 st December table, have been audited.Consolidated statement of financial positionFor the year ended 31 December2011thousand Lei2010thousandLei2009thousandLeiAssetsCash and cash equivalents 4.550.256 3.701.125 3.186.997Placements with banks 778.977 1.237.155 1.535.915Financial assets at fair value through140.551 111.977 44.865profit and lossLoans and advances to customers 13.977.655 12.215.792 11.481.759Net lease investments 207.388 223.617 271.312Available for sale securities 5.816.778 3.780.997 2.573.466Held to maturity securities 819 820 11.654Investments in associates - - 42.404Property and equipment 297.531 287.570 305.000Intangible assets 70.555 48.875 12.389Goodwill 376 8.369 8.369Deferred tax assets 28.163 30.454 16.719Other assets 139.764 83.501 122.181Total assets 26.008.813 21.730.252 19.613.03084

LiabilitiesDeposits from banks 251.181 333.194 259.134Deposits from customers 20.257.251 17.279.132 14.989.199Loans from banks and other financial 2.592.982 1.593.295 2.160.404institutionsOther subordinated liabilities 260.148 257.553 253.665Securities - 0 1.262Other liabilities 255.384 177.114 111.332Total liabilities 23.616.946 19.640.288 17.774.996EquityShare capital 1.860.159 1.560.500 1.176.237Treasury shares -2.118 -256 -333Share premiums 732 0 97.684Retained earnings 303.268 301.088 354.157Revaluation reserve 35.544 28.291 22.543Other reserves 192.248 198.230 179.948Total equity attributable to equity 2.389.833 2.087.853 1.830.236holders of the BankNon-controlling interest 2.034 2.111 7.798Total equity 2.391.867 2.089.964 1.838.034Total liabilities and equity 26.008.813 21.730.252 19.613.030The financial statements included in the Consolidated statement of financial position for thefinancial year ended 31 st December table, have been audited.85

Consolidated statement of changes in equityFor the year ended 31 DecemberAttributable to equity holders of the BankIn thousand LeiSharecapitalOwnsharesSharepremiumRevaluation reservesOtherreservesRetainedearningsNoncontrolling interestBalance as at December 31, 2010 1.560.500-256 - 28.291 198.230301.088 2.111 2.089.964Total comprehensive income for theperiodProfit for the year 297.019 229 297.248Other comprehensive income, netof income taxTransfer from revaluation surplus to-1.080 1.080retained earningsFair values losses from available for-15.820 -15.820sale investments (net of deferred tax)Revaluation reserve for fixed assetsOther changes -3.398 8.333 15.971 -22 20.884Total comprehensive income for the -3.398 7.253 -15.820 314.070 207 302.312periodIncrease in share capital through 302.336 -302.336conversion of reserves from thestatutory profitIncrease in share premium 732 732Increase in share capital through cash 721 721Total86

contributionDistribution to statutory reserves 9.838 -9.838Acquisition of own shares -1.862 -1.862Acquisition of non-controlling284 -284interestContributions by and distributionsto owners303.057 -1.862 732 - 9.838 -311.890 -284 -409Balance as at December 31, 2011 1.860.159-2.118 732 35.544 192.248303.268 2.034 2.391.867Balance as at December 31, 2009 1.176.237-333 97.684 22.543 179.948354.157 7.798 1.838.034Total comprehensive income for theperiodProfit for the year 133.794 190 133.984Other comprehensive income, netof income taxTransfer from revaluation surplus to-368 368retained earningsFair values gains from available for7.263 7.263sale investments (net of deferred tax)Revaluation reserve for fixed assets 6.116 6.116Other changes 3.748 1.746 -357 5.137Total comprehensive income for the5.748 11.011 135.908 -167 152.500periodIncrease in share capital through 173.901 -173.901conversion of reserves from the profitIncrease in share capital through 97.684 -97.68487

incorporation of share premiumIncrease in share capital through cash 112.678 - - - - 112.678contributionDistribution to statutory reserves 7.271 -7.271Acquisition of own shares 77 77Acquisition of non-controlling- -7.805 -5.520 -13.325interestContributions by and distributionsto owners384.263 77 -97.684 - 7.271 -188.977 -5.520 99.430Balance as at December 31, 2010 1.560.500-256 - 28.291 198.230301.088 2.111 2.089.964The financial statements included in the Consolidated statement of the equity evolution for the financial year ended 31 st December table,have been audited.88

Consolidated cash flow statementFor the year ended 31 December2011thousand Lei2010thousandLei2009thousand LeiCash flow from/(used in)operating activitiesProfit for the year 297.248 133.984 136.715Adjustments for:Depreciation and amortization 63.787 60.897 68.042Impairments and write-offs of 349.593 647.505 490.784financial assetsShare of profit in associate, net of- 1.805 10.298dividendsFair value adjustment of financial -9.247 -2.420 -17.203assets at fair value through profit andlossProfit from the sale of affiliated- - -38.596entities and jointly controlledcompaniesIncome tax expense 56.190 40.361 21.048Other adjustments -46.366 -143.655 -85.769Net profit adjusted for non-cash 711.205 738.477 585.319itemsChanges in operating assets andliabilitiesChange in investment securities -1.993.463 -1.238.340 -1.702.780Change in placement with banks 18.935 -4.717 -101.705Change in loans and advances to -2.017.414 -1.234.489 -1.034.093customersChange in net lease investment 32.596 22.817 104.893Change in financial assets at fair -35.810 -64.692 -13.140value through profit or lossChange in other assets -80.743 -17.647 -51.168Change in deposits from customers 2.950.057 2.302.439 3.114.883Change in deposits from banks -81.493 74.167 -Change in other liabilities 61.601 23.277 -5.918Income tax paid -51.009 13.057 -82.94389

Net cash from/(used in) operating -485.538 614.349 813.348activitiesCash flow from/(used in) investingactivitiesNet acquisitions of property and -82.339 -52.879 -24.138equipment and intangible assetsNet cash receipts from the sale of the- - 44.693entities affiliated to the jointlycontrolled companiesAcquisition of subsidiaries (net of- -13.325 -24.039cash acquired) and investments inassociatesDividends collected 817 932 2.017Net cash flow from/(used in) -81.522 -65.272 -1.467investing activitiesCash flow from /(used in)financing activitiesProceeds from increase of share1.453 112.678 -capitalNet proceeds/(payments) from loans 986.945 -590.975 -681.477from banks and other financialinstitutions, subordinated liabilitiesand debt securities issuedPayments for dividends - - -48.793Proceeds/(payments) for own shares -1.862 76 -12.297Proceeds from investments held to1 10.300 -maturityNet cash flow from/ (used in) 986.537 -467.921 -742.567financing activitiesNet increase in cash and cash 419.477 81.156 69.314equivalentsCash and cash equivalents at 1 4.613.120 4.531.964 4.462.650JanuaryCash and cash items at 31 5.032.597 4.613.120 4.531.964DecemberReconciliation of cash and cash equivalents with the consolidated statement offinancial positionCash and cash equivalents 4.550.256 3.701.125 3.186.997Placements with other banks – lessthan 3 months maturity484.360 915.583 1.349.22090

Less accrued interest -2.019 -3.588 -4.253Cash and cash equivalents in the 5.032.597 4.613.120 4.531.964cash flow statementCash flows from operating activities includeInterest collected 1.852.095 1.869.447 2.066.742Paid interest 880.055 907.514 1.377.312The financial statements included in the Consolidated statement of cash flows for the financialyear ended 31 st December table, have been audited.12.2. Audit of the annual financial informationFinancial AuditorThe Bank's auditor is KPMG Audit S.R.L, with head office on DN1, Soseaua Bucuresti-Ploiestinr.69-71, Sector 1, Victoria Business Park, Bucharest, 013685, recorded with the Trade RegisterOffice under number J40/4439/2000, recorded with the Chamber of Financial Auditors ofRomania under no. 9/2001.According to the report of KPMG Audit S.R.L. to the shareholders of the Bank for the years2011, 2010 and 2009, “the accompanying consolidated financial statements of Banca TransilvaniaS.A. and of its subsidiaries fairly present, in all significant aspects, the consolidated financialposition of the Group as at December 31, 2011, 2010, 2009 as well as the consolidated results ofits operations and the consolidated cash flows for the financial year then ended, in accordancewith the International Financial Reporting Standards adopted by the European Union”.12.3. Interim financial information and other informationBanca Transilvania Individual Financial Statements, 3 rd Quarter of 2012Individual Profit and Loss AccountFor Q3 2012Q3 2012Thousand LeiQ3 2011Thousand LeiQ3 2012/Q3 2011 %Interest income 1.506.577 1.341.881 1,12Interest expense (798.066) (694.540) 1,15Net interest income 708.511 647.341 1,0991

Fee and commission income 358.371 322.686 1,11Fee and commission expense (44.125) (36.345) 1,21Net fee and commission income 314.246 286.341 1,10Net trading income 100.912 73.345 1,38Other operating income 33.867 14.761 2,29Operating income 1.157.536 1.021.788 1,13Personnel expenses (313.382) (278.044) 1,13Depreciation and amortization (35.055) (36.927) 0,95Other operating expenses (268.534) (233.369) 1,15Operating expenses (616.971) (548.340) 1,13Operating profit 540.565 473.448 1,14Net impairment losses on assets, (265.737) (219.460) 1,21other liabilities and creditcommitmentsProfit before tax 274.828 253.988 1,08Tax expense (9.396) (49.472) 0,19Net profit 265.432 204.516 1,30The financial statements included in the Individual Profit and Loss Account for the financial Q32012 table, have not been auditedIndividual statement of financial positionFor Q3 2012Q3 2012Thousand LeiDec 31. 2011Thousand LeiDec 31, 2012/Q3 2011 %AssetsCash and cash equivalents 4.558.295 4.546.532 1,00Placements with banks 1.059.394 566.608 1,87Loans and receivables 77.593 202.819 0,38Financial assets at fair value38.734 119.521 0,32through profit and lossLoans and advances to customers - 15.526.590 14.035.290 1,11netInvestment securities, available for 7.171.962 5.813.219 1,23saleInvestment securities, held to0 819 -maturityInvestments in associates 74.053 69.978 1,06Intangible assets 74.004 69.136 1,0792

Tangible assets 275.174 266.586 1,03Receivables related to deferred tax 16.683 26.974 0,62Other assets 137.491 100.364 1,37Total assets 29.009.973 25.817.846 1,12LiabilitiesDeposits from banks 265.800 251.181 1,06Deposits from customers 22.833.173 20.280.230 1,13Loans from banks and other 2.671.711 2.468.988 1,08financial institutionsOther subordinated liabilities 276.095 260.148 1,06Other liabilities 324.251 237.495 1,37Total liabilities 26.371.030 237.495 1,12EquityShare capital 1.989.543 1.860.159 1,07Treasury shares -1.997 -1.907 1,05Share premiums 0 732 -Retained earnings 369.283 234.983 1,57Revaluation reserve 33.548 34.134 0,98Other reserves 248.566 191.700 1,30Total equity 2.638.943 2.319.804 1,14Total liabilities and equity 29.009.973 25.817.846 1,12The financial statements included in the Individual statement of financial position for thefinancial Q3 2012 table, have not been audited,The financial statements presented in the Prospectus on 30. 09. 2012 have not been audited.12.4. Legal and arbitration proceduresNot applicable.12.5. Significant changes in the financial or commercial situationNot applicable.13. ADDITIONAL INFORMATION13.1. Share capitalThe Bank is registered with the Trade Register (TRO) under number J12/4155/16.12.1993, havingthe Tax identification number 5022670. According to the updated Articles of Association, theBank has a share capital of 1,903,042,413 Lei divided into 1,903,042,413 shares, each with anominal value of 1 Leu. The share capital is fully subscribed and paid on the registration date ofthe mentions regarding the latest increase of capital with the TRO.93

The Shares of the Bank are nominative, dematerialised, registered with the Central Depositary.The Shares bear dividend calculated based on the annual profit of the Bank. Any capital increaseand issuance of new Shares can occur after the full payment of Shares from the previous issuance.According to the Articles of Association and the applicable regulations, each share acquired inaccordance with the law grants the shareholder several rights attached to the Shares held,including:• the right to attend and vote in the GSM and Extraordinary GSM;• the right to dividends;• the right of preference associated to the capital increase operation, which givesshareholders the right of priority in subscribing to the newly issued Shares and protects theholders of Shares against the risk of dilution of the share capital percentage held before thecapital increase;• the pre-emption right applies to issuance of Bonds convertible to Shares;• the right to participate in the distribution of the proprietary assets upon liquidation of theIssuer; the right to elect and be elected in the governing bodies of the Issuer;• right to the allocation of Shares free of charge in case of share capital increase frominternal resources;• the right to information;• the right to appeal in court the decisions of the GSM or of the Board of Directors adoptedunder the delegation of authority;• the right to withdraw from the company, in strictly defined cases;• the right to report to internal auditors any facts which should be examined, in theshareholder’s opinion;No shareholder can hold 10% or more of the total share capital of the Bank, unless:(i) it is approved by the General Meeting of the Shareholders; and(ii) it is in accordance with all the requirements of banking legislation.Each shareholder must comply with the Articles of Association and shall be bound by the validdecisions of the General Meeting of Shareholders. All Shares confer equal rights and obligations.The shareholders are liable up to the subscribed share capital.The Shares are indivisible. If a share becomes the property of several persons, the Bank mayrefuse to register the transfer of the share until the respective persons shall not appoint a solerepresentative to exercise the rights derived from the share. As long as a share is divided betweenseveral persons, these are jointly liable for the completion of all relevant payments.13.2. Memorandum and Articles of Association94

According to the Articles of Association, the main object of activity is: financial intermediationand insurance, financial intermediation, except that of insurance activities and pension funding,monetary intermediation and other monetary intermediation activities. The Bank shall performspecific operations and activities in the country and abroad, on its own or on behalf of its clients,legal or natural entities, on behalf of institutions or in collaboration with these.14.IMPORTANT AGREEMENTSExcept for the agreements concluded during the ordinary course of the banking activityperformed by the Issuer, the Bank did not conclude any agreements that could have affectedthe Issuer’s capacity to fulfil its obligations to the investors.15. THIRD PARTY INFORMATION, STATEMENTS BY EXPERTS ANDDECLARATIONS OF INTERESTKPMG Audit S.R.L, with head office on DN1, Soseaua Bucuresti-Ploiesti nr.69-71, Sector 1,Victoria Business Park, Bucharest, 013685 recorded with the Trade Register under numberJ40/4439/2000, recorded with the Chamber of Financial Auditors of Romania under no. 9/2001has audited the Group’s financial statements for the fiscal year ended 31 December 2011, 31December 2010 and 31 December 2009. These financial statements together with the audit reportare attached as Annex to this Prospectus.95

16. DOCUMENTS ON PUBLIC DISPLAYThroughout the Offer validity period the following documents are available to investors:(a) the Issuer’s Articles of Association;(b) all reports, letters and other documents, historical financial information, valuations andstatements prepared by experts at the request of the Issuer from which certain parts are includedor referred to in the registration document;(c) the historical financial information of the Issuer or, in case of a group, the consolidatedfinancial information of the two financial years that precede the publication of the registrationdocument.The documents mentioned above are available for consultation, on paper support, at any of thefollowing addresses:• the headquarters of the Broker (Cluj Napoca, Bld. 21 Decembrie 1989, nr.104, et 1)• the headquarters of the Issuer (Cluj-Napoca, G. Baritiu Str. No.8, 2 nd floor)96

II. BONDS TERMS AND CONDITIONS1. BASIC INFORMATION1.1. Interests of the individuals and legal entities involved in the offerThe Bank and the Broker hereby declare that none of them has any interest that maysignificantly influence the Offer, except for those related to the execution and performance ofthe Bond Agreements and the Prospectus.The Issuer represents to investors that the only persons responsible for drawing the Prospectusare the Bank and Broker and no other person is involved or accepts liability for the Prospectus.1.2. Reasons for the offer and use of fundsThe funds obtained from the Offer in a maximum value of Euro 30,000,000 shall be used toincrease the Bank's Supplementary Tier II Capital base (own funds of the Bank) and finance thegeneral operations of the Bank and the expansion of the Bank's operations, including its branchnetwork.2. INFORMATION REGARDING SECURITIES THAT ARE TO BE OFFERED2.1. The nature and category of securities offered and admitted to trading and the ISINcode (International Securities Identification Number) or any other identifier.The Bonds are nominative, corporate Bonds, issued in dematerialized form, evidenced by bookentry in the Bond Registry kept with the Central Depositary.The Bonds shall be registered with CNVM and bear an ISIN Code.Bonds are issued in Euro and shall not be admitted to trading.2.2. The legislation underlying the creation of the securities.The Bonds are issued and offered in accordance with the Romanian laws, i.e. Capital MarketLaw and related secondary legislation issued by CNVM and the Company Law.Any dispute that arises from or in relation with the Bonds shall be settled by the competentauthorities in Romania.2.3. Bond formForm and Denomination. The Bonds are corporate securities, issued in nominative,dematerialised form and will be kept with the Central Depositary. The Bonds will be issued in anaggregate nominal value of Euro 30,000,000, consisting of 50,000,000 Bonds with a nominalvalue of Euro 0.6 each.97

The Bonds are securities which will not be admitted to trading, nominative, convertible intoShares of the Issuer, representing unsecured and subordinated indebtedness qualifying assupplementary Tier 2 capital of the Issuer in accordance with Regulation 18/2006Title and Transfers. The Title to the Bonds belongs to the holders of the Bonds registered inthe Bond Registry kept with the Registrar. The title to the Bonds shall pass to the transfereeupon the registration of such transaction in the Bond Registry, in accordance with the civil andcommercial laws in force in Romania.Each person who appears in the Bond Register as the holder of such Bonds (in which regard anycertificate or other document issued by the Registrar and confirming the nominal amount of suchBonds registered on the account of any person shall be conclusive and binding for all purposessave in the event of manifest error) shall be deemed to be (and shall be treated by the Bank, thePaying Agent and all other agents of the Bank as) the holder of such Bonds. .2.4. The currency of the issuanceBonds are issued in Euros.2.5. Classification of the securities offered and admitted to trading, including a summary ofany clauses that are intended to influence the classification or to subordinate the securitiesin question to any other current or future commitment of the Issuer.The issuance in 2013 of the unsecured, convertible and subordinated Bonds amounting to Euro30,000,000, due in 2020 was authorized by the resolutions of the Extraordinary General Meetingof the Shareholders, adopted on April 27, 2012 and on October 30, 2012.The Bonds are securities which will not be admitted to trading, nominative, convertible intoShares of the Issuer, representing unsecured and subordinated indebtedness qualifying assupplementary Tier 2 capital of the Issuer in accordance with Regulation 18/2006.2.6. A description of the rights related to securities, including any restrictions that areapplicable, as well as of the procedures for the exercise of the rights in question.The Bondholders have the rights provided by the relevant legislation as well as by thisProspectus and by the relevant Bond Agreements with respect to, amongst others, interestpayment, conversion rights, their rights to convene Bondholders meetings, to benefit of PaymentAgent services, to be provided with certain information.98

The Bonds are direct, unconditional, general and unsecured obligations of the Bank ranking paripassu among themselves and without any preference, but the Bonds shall be subordinated andjunior in right of payment to the non-subordinated claims of all other creditors, but shall rankpari passu with any subordinated debts of the Issuer; provided that, such subordinationprovisions shall not prevent any holder of the Bonds from exercising the conversion rights underthe Bonds set forth in the Prospectus, and no deemed payment of any Bond arising out of anyexercise of conversion rights shall be prohibited by such subordination provisions.Relevant details regarding specific rights and limitations are provided in various sections ofthe Prospectus. Specifically, a description of the provisions on interest, subordination,conversion, bondholders meetings is available at Sections [2], [5] and [11] below.Subject to the terms provided in Annex 2A], the Issuer undertakes to observe certain standardswhich will increase the performance of the Bank for the benefit of the Bondholders and toprovide certain information and documents to the Bondholders. The breach of these undertakings/standards does not constitute an Event of Default and consequently cannot trigger theacceleration, the early repayment of the Bonds or the increase in the initial costs.The Bonds shall not be rated and admitted to trading on a regulated market or any other tradingplatform (multilateral trading facilities etc). The transfer of the Bonds shall be effected incompliance with the provisions of the civil and commercial laws of Romania.2.7. Nominal interest rate and provisions for payable interests:InterestThe Bonds bear interest from the Issue Date at a rate equal EURIBOR 6 month +6.25% (the sum,the "Interest Rate"), payable semi-annually in arrears on the following dates:15 July 201315 January 201415 July 201415 January 201515 July 201515 January 201615 July 201615 January 201715 July 201715 January 201815 July 201815 January 201915 July 201915 January 2020Maturity Date99

If any Interest Payment Date would otherwise fall on a day which is not a Business Day, thepayment of interest shall be postponed to the next day which is a Business Day. The periodbeginning on the Issue Date and ending on (but excluding) the first Interest Payment Date andeach successive period beginning on (and including) an Interest Payment Date and ending on(but excluding) the next Interest Payment Date is called an "Interest Period".For the first Interest Period, (i) the Margin shall be 6.25% per annum and (ii) the EURIBOR 6month shall be the EURIBOR 6 month in effect on the second Business Day immediately precedingthe Issue Date which can be found on the Reference Page.For each subsequent Interest Period, on the second Business Day immediately preceding thebeginning of such Interest Period, the Paying Agent shall determine : (i) EURIBOR 6 month forsuch Interest Period which can be found on the Reference Page and (ii) the applicable margin,that is 6.25%:If, for any reason, EURIBOR 6-month cannot be determined at such times as mentioned aboveby reference to the Reference Page, EURIBOR 6-month for such Interest Period shall be therate per annum which the Paying Agent determines to be the arithmetic mean (rounded upward,if necessary, to four decimal places) of the offered rates per annum for deposits in Euro in anamount comparable to the total face value of the outstanding Bonds for a period equal to suchInterest Period which are quoted by at least two major Banks active in the Euro-zone Interbankmarket selected by the Paying Agent and provided further that if pursuant to the above theInterbank Rate would be below zero, the Interbank Rate will be deemed to be zeroReturn on the BondsThe return on the Bonds, for one Bond, (periodic interest payment) will be variabledependent on the Interest Rate, which is also variable. The return on the Bonds iscalculated for each Interest period pursuant to the following formula:Periodicinterestpayment=VNeuro( EURIBOR 6luni + Spread )360 days×( No of days in the Interest period )Where:VN Euro = par value of a bond in EUROThe return on the Bonds for the first Interest Period ending on July 15 2013 isEURIBOR 6 months in force on the second Business Day before the Issue Date, publishedon the Reference Page plus a margin of 6.25%.Bonds will continue to bear interest as provided herein until they are redeemed in full and all100

payments accrued and unpaid have been paid in full or the Bonds are converted into Shares inaccordance with their terms and all payments accrued and unpaid have been paid in full.Interest will be calculated on the basis of the actual number of days elapsed in an InterestPeriod and a year of 360 days2.8. Status, SubordinationThe Bonds are direct, unconditional, general and unsecured obligations of the Bank rankingpari passu among themselves and without any preference, but the Bonds shall be subordinatedand junior in right of payment to the non-subordinated claims of all other creditors, but shallrank pari passu with any subordinated debts of the Issuer; provided that, such subordinationprovisions shall not prevent any holder of the Bonds from exercising the conversion rightsunder the Bonds set forth in Section 5. Conversion in Section 2. Information regardingsecurities that are to be offered, II. Bonds Terms and Conditions below, and no deemedpayment of any Bond arising out of any exercise of conversion rights shall be prohibited bysuch subordination provisions.In the event of bankruptcy or liquidation of the Bank, all amounts due under the Bonds shall besubordinated to the prior payment and satisfaction in full of all unsubordinated indebtedness ofthe Bank admitted in such procedure. The subordination provisions shall be pursuant to therequirements set forth by the NBR to qualify the Bonds as supplementary Tier II Capital of theBank (own funds of the Bank), i.e. compliant with the Regulation 18/2006.These Bonds are capital in the form of subordinated loan, in compliance with the terms andconditions below:1. the binding commitments herein ensure that, in the event of the bankruptcy orliquidation of the Issuer, they rank after the non-subordinated claims of all othercreditors and are not to be repaid until all other unsubordinated debts outstanding at thattime have been settled. In this respect, the contractual provisions meet the generalrequirements on subordinated debt, i.e.:• subordination is effective;• the Prospectus does not contain any clauses which may lead to the early repayment ofthe Bonds or to the increase of the initial costs of the Bonds. This does not howeverprejudice the Bondholder’s right to petition for the winding-up of the Issuer, in theevent of the culpable failure of the contractual obligations. The only situations thatrepresent culpable events of default of the Issuer (Events of Default) are: failure topay the due amounts according to the Prospectus (the interest pursuant to theProspectus and the principal upon maturity) and the Issuer’s bankruptcy, respectively.In these situations, the Bondholder does not have any way to realize his claim otherthan the possibility to request the winding up of the debtor or finally, to enforce hisrights by a liquidation procedure of the latter; additional claims for damages arepossible only within these procedures for the realization of the claims and such claimsshall be collected together with the main claim, after all other unsubordinated claims.101

In compliance with the NBR subordination requirements (including withoutlimitation Regulation 18/2006), the Bondholders shall have no right to offset anyamount owed by them to the Issuer against any amount owed by the Issuer to theBondholders. –2. only fully paid-up funds are taken into account;3. the loans involved shall have an original maturity of at least five years;4. the total amount taken into account in the determination of tier 2 supplementary own fundswill be gradually reduced during at least the last five years before the repayment date, byapplying equal semi-annual proportional shares, so that the outstanding Bonds are no longerconsidered in the reporting for the last semester before the final maturity;5. the Prospectus does not include any clause providing that, in specified circumstances, otherthan the winding-up of the Issuer, the debt shall become repayable before the agreed repaymentdate.For as long as the Bonds are outstanding, the Bank shall not create or permit to be created anymortgage, pledge or other lien or charge on any of its property or assets, as security for anybonds, notes or other evidence of indebtedness heretofore or hereafter issued, assumed orguaranteed by the Bank for money borrowed, but failing to observe such undertaking does notrepresent an event of default in the meaning of Regulation 18/2006 and consequently cannottrigger an early repayment, acceleration or increase in the initial costs of the Bonds".Until the date of the first Business Day of the Primary Offer, the Bank will not make any andwill not allow the entry into force of any amendment to any of the Bond Agreements that wouldadversely affect the interests of the Lead Investor in the bonds of Tranche A, and will promptlynotify the Lead Investor with respect to the termination or change of any Bond Agreement, [andin reference to any replacement or substitution of the Paying Agent], but failure to comply doesnot constitute a case of cross default, as defined by Regulation 18/2006 and, consequently,cannot trigger a prepayment, acceleration or increase in the initial costs of the Bonds.Until the date of the Lead Investors’ subscription in the Primary Offer, in case the LeadInvestor finds any major violation or any event which proves false or incorrect any of therepresentations or warranties of the Tranche A Bonds Subscription Agreement, of theProspectus or any of the Bond Agreements or any other documents referring to theaforementioned, or any failure of the Bank to comply with any undertakings or arrangements inthe Tranche A Bonds Subscription Agreement, the Prospectus or any of the Bond Agreementsor any other documents referring to the aforementioned, the Lead Investor has the right toterminate the Tranche A Bond Subscription Agreement, but this does not constitute a case ofcross default, as defined by Regulation 18/2006 and, consequently, cannot trigger aprepayment, acceleration or increase in the initial costs of the Bonds.2.9. Payments(a) All payments of principal and interest in respect of the Bonds will be made on theapplicable Interest Payment Date and/or Redemption Date, as applicable, by the Paying102

Agent to the Bondholders registered in the Bond Registry as of the applicable RecordDate. "Record Date" shall be the date three (3) Business days prior to the applicableInterest Payment Date or the Redemption Date, as applicable. All payments will besubject to applicable fiscal, tax or other laws, regulations or directives. No commissionor expenses shall be charged to the Bondholders in respect of such payments.(b) The Bank has reserved the right at any time to vary or terminate the appointment of thePaying Agent and appoint a substitute and/or additional or other paying agents, subjectto the prior written consent of the Bondholders and provided that it will, as long as anyof the Bonds remains outstanding, at all times maintain a paying agent having aspecified office in Romania. Notice of changes in the Paying Agent or its specifiedoffice will be given to the Bondholders in accordance with Section 7 (Notices) in thisSection II. Bonds Terms and Condition.3. PrescriptionClaims against the Bank for payments in respect of the Bonds shall be prescribed and becomevoid unless made within three (3) years (in the case of principal or interest) as of theappropriate Relevant Date thereof. As used in these Terms and Conditions, "Relevant Date" inrespect of any Bond means the date on which the payment thereof first becomes due.4. Events of Default -With respect to the Bonds, it shall be an "Event of Default" if (a) the Bank fails to pay whendue the principal or the interest on any bond due in accordance with the Prospectus or (b) anybankruptcy proceedings are initiated against the Bank or the Bank files a petitionseeking bankruptcy under any applicable law.Notwithstanding anything to the contrary in this Prospectus, only liquidation of the Issuer cantrigger the advanced repayment of the Bonds prior to maturity. The conversion of the Bondsdoes not constitute an advanced reimbursement.Consequences of Events of Default:(a) If the Issuer fails to pay on due date any principal of, or interest on the Bonds outstandingunder the Prospectus, the Bondholders may, in compliance with the NBR Regulation 18/2006,commence the bankruptcy and the subsequent liquidation proceeding against the Issuer inaccordance with Romanian law and shall be able to request the repayment of the Bonds onlywithin the bankruptcy or liquidation procedure of the Issuer.(b) As long as any portion of the Bonds qualifies as subordinated indebtedness the Bondscannot be accelerated. However, if there shall have been entered against the Issuer a decree ororder by a court or other competent authority declaring the Issuer Bankrupt, or any resolutionhas been passed for the liquidation within the insolvency proceedings of the Issuer, or a court orother competent authority has made a decision to commence bankruptcy proceedings against103

the Issuer, then such will be the only situation under the Prospectus provided that the Bondswill be qualified as supplementary Tier 2 Capital when the Bondholders may declare theprincipal of, and all accrued interest on, the Bonds to be, and the same shall thereupon become,immediately due and payable by the Issuer without any further notice and without anypresentment, demand or protest of any kind, all of which are hereby expressly waived by theIssuer. In any such bankruptcy or liquidation of the Issuer, the payment of any amounts payableshall be subordinated to the payment of all unsubordinated indebtedness.5. ConversionConversion Rights. Subject to the conditions set forth in this Section 5 any Bondholder maychoose to effect the conversion of all or any portion of the outstanding principal of Bonds heldby such Bondholder into Shares of common stock of the Bank free and clear of anyEncumbrance (as defined below) and together with all rights attaching thereto: (i) by sending aConversion Notice in the form of Annex 4 within (30) days from a Price Fixing Date or (ii) bysending a Conversion Notice in the form of Annex 4 within 90 days immediately following aLiquidity Event Date. For the avoidance of doubt, the Issuer shall mention the exactConversion Date in the notification towards Bondholders of each Price Fixing Date at leastfifteen (15) days prior to such date and within five (5) days after a Liquidity Event Date.The Conversion shall be made at a price per Share to be determined on the applicable PriceFixing Date or Liquidity Event Date, equal to the average between the highest and lowest dailyprice of the Shares on the Spot Regular market, weighted by the daily trading volume on theSpot Regular market over the 90 days on which the Shares were traded on BVB, immediatelyprior to the applicable Price Fixing Date or Liquidity Event Date, as applicable, as illustrated inthe following price formula:P⎛ ( p+90h∑⎜d = 1=⎝ 290∑d = 1pl)∗VVdd⎞⎟⎠whereP is the Conversion Priced denotes a trading day at the BVBP h is the highest price at which the Shares are traded on the trading day d on the Spot RegularmarketP l is the lowest price at which Shares are traded on the trading day d on the Spot Regular104

marketV d is the number of Shares traded on the trading day d on the Spot Regular marketThe Conversion shall be effected by the offering to the Broker (who will forward it to theBank’s Board of Directors) of that number of Bonds owned by the Bondholder as may berequired, pursuant to the next sentence, in order to effect the payment of the Conversion Priceagainst the delivery by the Bank to the Bondholder of the number of Shares which theBondholder may be entitled to acquire by way of such Conversion. The number of Shares intowhich the outstanding principal (or portion thereof) shall be converted, shall be determined bydividing the RON equivalent of the outstanding principal the Bondholder has chosen to convert,based on an exchange rate equal to the Spot Exchange on the applicable Price Fixing Date orLiquidity Event Date, by the Conversion Price. The Conversion Price is subject to adjustmentas provided under the Sub-Paragraph Antidilution Provisions. For purposes hereof, "SpotExchange" shall mean the RON/Euro exchange rate published by the NBR as shown onReuters; and "Encumbrance" shall mean any claim, charge, mortgage, security, lien, option,equity, pledge, proxy, power of sale, hypothecation, third party rights, pre-emptive right, rightof first refusal or, security interest of any kind, voting trust or agreement, obligation,understanding or arrangement or other restriction on title or transfer of any nature whatsoever.Conditions regarding the Conversion.If a Bondholder chooses to convert a portion, but not all of its Bonds, the minimum aggregateamount to be converted shall be five hundred thousand Euro ( Euro 500,000). In addition, theaggregate number of Shares held by such Bondholder, after giving effect to the Conversion,may not exceed ten percent (10%) of the outstanding Shares at any time, unless the approval ofthe EGM and authorization of NBR is obtained; provided that, a Bondholder may sell orotherwise dispose from time to time of any portion of Shares then held, so as to enable suchBondholder to further exercise its conversion rights from time to time.This limitation shall not apply to EBRD, which at the date of the Prospectus holds 278.100.206Shares representing 14.6134 % of the Shares of the Bank.No fractional Shares shall be issued upon any Conversion. If a fractional number of Sharesresults from a conversion, the number of Shares will be rounded as follows: if the fraction isequal to or less than one-half, the number of Shares will be rounded down to the next wholeShare; and if the fraction is greater than or equal to one-half, the number of Shares will berounded up to the next whole Share.Manner of Effecting a Conversion.The Bank shall notify the Bondholders of each Price Fixing Date at least fifteen (15) days priorto such date and within five (5) days after a Liquidity Event Date by publishing a notice in oneof the leading national newspapers in Romania and by direct notice to any Bondholder holdingBonds in a minimum aggregate principal amount of Euro 1,000,000 and through ah-hoc report105

to BVB If a Bondholder elects to effect the Conversion, the Bondholder shall deliver a dulyexecuted irrevocable Conversion Notice to the Broker (who will forward it to the Council ofAdministration of the Bank in order to approve and register the share capital increase with theShares resulted from such conversion) within thirty (30) days immediately following such PriceFixing Date or within ninety (90) days following a Liquidity Event Date, as applicable. Nonotice shall be accepted by the Bank after the 30 th day following the Price Fixing Date or afterthe 90 th day following the Liquidity Event Date.Upon a Conversion, the accrued and unpaid interest on the Bonds to be converted will be paidto the Bondholder on the 3 rd Business Day after the Shares Issue Date immediately followingsuch Conversion Date, for the Period, between the previous Interest Payment Date and theapplicable Shares Issue Date, excluding the Shares Issue Date. Upon any Conversion, therights of the converting Bondholder with respect to the outstanding principal and all interestpursuant to the converted Bonds (other than accrued and unpaid interest mentioned in thepreceding sentence), shall cease. The Registrar shall make the appropriate book-entry changesin the Bond Registry.Upon a Conversion, the share capital of the Bank shall be increased, with the approval of theBoard, without the exercise of any pre-emptive rights otherwise applicable in share capitalincreases. The Bank shall take all appropriate and necessary steps to effect any Conversionwithin 45 days following the Conversion Date, including but not limited to convening theMeeting of the Board of Directors for the approval of any required capital increase, filing andobtaining all necessary regulatory approvals, issuing and registering the Shares on the name ofthe entitled Bondholder in the Shareholders’ RegisterAntidilution Provisions. The Conversion Price shall be subject to adjustment from time to timeif the Bank grants or issues rights or warrants (including convertible Bonds and similarsecurities) entitling holders to subscribe or tender for or purchase Shares at a price per shareless than the Conversion Price applicable at such time. In such event, the Conversion Price willbe set equal to such lower price. For the avoidance of doubt, such adjustment shall excludestock, stock dividends, stock splits, and "bonus shares" which the Bank may issue from time totime.6. UndertakingsThe Bank undertakes to the Bondholders to comply with the endeavours set forth in Annex 2Aattached hereto The Issuer undertakes to observe certain standards which will increase theperformance of the Bank for the benefit of the Bondholders and to provide certain informationand documents to the Bondholders.The breach of these undertakings does not constitute an event of default and consequentlycannot trigger the acceleration, early repayment of the Bonds or the increase in the initial costs.106

7. NoticesExcept as otherwise provided in this Prospectus, all notices regarding the Bonds shall be validlygiven if published in a leading daily newspaper in Romanian with nationwide coverage. For allpurposes it shall be deemed that Bondholders have acknowledged the contents of any noticegiven in accordance with this Section (except as otherwise provided herein).The publishing of the notice in such newspapers may be substituted by the delivery of therelevant notice to each Bondholder. Any such notice shall be deemed to have been given to theBondholders on the seventh day after the sending of such notice.Except as otherwise provided herein, notices given by any Bondholder pursuant hereto(including to the Bank) shall be in writing and given by submitting the same with the PayingAgent provided,.8. Use of proceedsThe net proceeds from the sale of the Bonds will be used to increase the Bank's SupplementaryTier II Capital base and finance the general operations of the Bank and the expansion of theBank's operations, including its branch network.9. Due date and description of the loan amortization methods, including repaymentprocedures. In case of an early amortization, upon the Issuer’s or holder’s initiative,description of the early amortization conditions and methods.Redemption:(a) Final Redemption Outstanding Bonds will be redeemed at their par value on theInterest Payment Date falling on the Maturity Date.(b) No Pre-Payment The Bank may not at any time pre-pay, purchase or otherwiseacquire or redeem Bonds in whole or in part prior to the Redemption Date.10 Return on the BondsIt is presented in Section 2.7.11. Meetings of BondholdersThe Bondholders may convene general meetings to decide matters relating to their interestsregarding the Bonds in accordance with the applicable law. The relevant provisions regulatingthe ordinary meetings of shareholders in terms of form, conditions, convening terms, proof of title107

to the Bonds and voting procedures shall also be applicable to the meetings of the Bondholders.A meeting shall be held at the expense of the Bank and shall be convened by the Bank upon thewritten request of one or more Bondholders representing at least 25% of the total nominal valueof the issued and outstanding principal of the Bonds or, by the Bondholders’ representative afterthe appointment of such representative in the Bondholders meeting.In accordance with the Company Law, the Bondholders’ Meeting may, among others:• appoint a representative of the Bondholders and one or more substitutes, having the rightto represent the Bondholders before the Bank and the courts of law, to decide upon theircompensation thereof; the representative and the substitutes may not be involved in theadministration of the Bank but shall be entitled to assist in the GMS of the Bank;• perform any and all acts of supervision, and protect the common interests of theBondholders and authorize a representative for this purpose;• contest any amendment to the Bank's Articles of Association or to the terms andconditions of the Bonds, which may impair or negatively affect the rights of theBondholders;• express opinions with respect to the issuance of new Bonds; and• establish a fund, which may be constituted from the interest payments due to theBondholders, in order to enable them to pay the expenses necessary for the protection oftheir rights, establishing, at the same time, the rules applicable to the management of suchfund.12. Resolutions underlying the issuance of Bonds and scheduled issuance date• The Decision of the General Meeting of the Shareholders, dated 27.04.2012 and30.10.2012.• The Decision of the Board of Directors, dated. 26.02.2013.• CNVM has approved this Offering Prospectus through the Approval Decision No. 304,dated 04.04.201313. Restrictions on the free transferability of securitiesThere are no restrictions on the free transferability of the Bonds.Title and Transfers. The Title to the Bonds belongs to the holders of the Bonds whose namesappear from time to time in the Bond Registry kept with the Registrar. Upon the transfer, thetitle to the Bonds shall pass to the transferee upon the registration of such transaction in the108

Bond Registry in accordance with the civil and commercial laws in force in Romania.14. Fiscal aspectsThe following information on tax issues regarding the Bonds are only for informationpurposes and are in accordance with the applicable law and do not represent a completeanalysis of fiscal issues that may arise in connection with the acquisition or issuance ofconvertible Bonds. This information is not and should not be considered by potential investorsas legal or fiscal indicators. Potential investors should be aware of the provisions of the taxlaws applicable in Romania when investing in the Bonds provided by this Offer and shouldseek independent legal and tax consultancy.The information below represents a brief overview of the tax regime applicable to Bonds, asprovided in the Fiscal Code of Romania adopted by Law No. 571/2003 with its subsequentamendments (“Fiscal Code”).Bonds and all interests thereto are not exempt from taxation (in general). Taxes applicable toinvestors in the Bonds are: (i) tax on gains from the transfer of Bonds; and (ii) tax on incomefrom interests related to Bonds. Such taxes are set according to the resident/non-resident statusof the investor.Resident investorsResident natural personsTax on gains from the transfer of Bonds. Gains from the transfer of Bonds, which may resultfrom the transfer of the Bonds, consist of the positive difference between the selling price andthe purchase price of the Bonds, except any related costs (e.g. brokerage commission).According to Article 66, paragraph (5) and Article 67 paragraph (3) of the Fiscal Code, thegain from the transfer of Bonds shall be determined quarterly and it is imposed with a 16%rate. The annual due tax is determined by the competent tax authority based on the incomestatement.Tax on interest. According to Art. 67 (2) of the Fiscal Code, interest income is taxed with 16%of its value. This tax is withheld by the payer of the interest rate (Bank).Resident legal personsTax on gains from the transfer of Bonds. Gains resulting from the transfer of Bonds byresident legal entities are included in the taxable income of the legal persons. The tax on theprofit of such taxable income is 16%.Tax on interest. Interest paid on Bonds is included in the taxable income of resident legalentities. The tax on the profit of such taxable income is of 16%.109

Non-resident investorsNon-resident natural personsTax on gains from the transfer of Bonds. According to Art. 115 (2) and Art. 66 (5), as well asArt. 67 (3) of the Fiscal Code, the gain from the transfer of Bonds shall be determinedannually and it is imposed with a 16% rate.Tax on interest. According to Art. 116 (2) d) of the Fiscal Code, the tax on interest on Bondspaid by non-resident natural persons is 16%. This tax is withheld by the interest payer (Bank).Non-resident legal personsTax on gains from the transfer of Bonds. Gains from the transfer of Bonds obtained by nonresidentlegal entities are not subject to taxation in Romania, with the exception when the nonresidentlegal person has a permanent establishment in Romania. The obligation to calculate,declare and pay the tax until the 25 th of the month following each quarter is that of theBondholder.Tax on interest. According to Art. 116 (2) d) of the Fiscal Code, the tax on interest on Bondspaid by non-resident legal persons is of 16%. This tax is withheld by the payer of the interest(Bank).Convention on the avoidance of double taxationAccording to Art. 118 of the Fiscal Code, in the case of non-residents from countries whichhave signed a double taxation convention with Romania, the taxes paid by such non-residentperson cannot exceed the taxes imposed by the convention for the avoidance of doubletaxation. If the tax rates established by the laws of Romania are more favourable than thoseprovided by the convention, the more favourable tax rates shall be applied. For the applicationof the convention, the non-resident legal person is obliged to submit the certificate of fiscalresidence issued by the competent authority of its state of residence to the income payer at thetime of the income.Specific provisions related to International Finance CorporationAccording to Article VI, Section 9, Par. (a) of the IFC Articles of Agreement (the “Articles ofAgreement”) which were implemented into the Romanian legislation by Law no. 28/1991, asamended, “IFC, its assets, property, income and its operations and transactions authorized bythe Articles of Agreement, shall be immune from all taxation and from all customs duties. IFCshall also be immune from liability for the collection or payment of any tax or duty”. Thus,IFC is exempted from paying tax in Romania, in accordance with the above mentionedprovisions of the Articles of Agreement (including tax on interest on Bonds).Specific provisions related to the EBRD110

In accordance with the Agreement dated May 29, 1990 for the establishment of the EuropeanBank for Reconstruction and Development, ratified by Romanian by Law No. 24/1990, EBRDis exempt from any direct Romanian taxation (including the taxes related to the Bonds).3. OFFER CONDITIONSOffer conditions, statistics on the offer, draft schedule and subscription requestmethodsThe Offer is made in accordance with Romanian legislation, respectively according to,amongst others, the Capital Markets Law, Banking Law, Company Law, Foreign CurrencyRegulation, secondary legislation issued by NBR and CNVM.The offering consisting of the sale of 50,000,000 Bonds issued by the Bank, with thefollowing features:• 50.000.000 registered securities issued in dematerialized form, evidenced by bookentry• Issue price: 0.6 EURO• Nominal value: 0.60 Euro/bond;• The total nominal value of the issue: 30,000,000 Euros.The Offer shall be initiated in accordance with CNVM Regulation No. 1/2006 withsubsequent amendments and supplements within 2 days from the publication of the ad. ThePre-Emptive Offer shall run for 30 calendar days and the Primary Offer for 9 Business Days.Any modification of the terms of this approved offer shall be done at the request of theIssuer (after obtaining the approval from CNVM for the amendment of the Prospectus) andin accordance with the law.This Offer is structured in two distinct offers:1- The Pre-emptive Offer: This offer is addressed to all the Shareholders ofthe Bank, as registered at the “Registration Date”2- The Primary Offer is addressed primarily to the Lead Investor; if therewill be any residual Bonds left after the Lead Investor’s subscription,these will be offered to Qualified Investors.:Considering this distinction, this Primary Offer is divided into two tranches:(i) The Tranche A Bonds offer, addressed to the LeadInvestor in priority to the Tranche B Bonds offer, and iscomprised of all Bonds that remain unsubscribed to after111

the close of the Pre-emptive offer stage, and is up to18,938,347.80 EUR.(ii)The Tranche B Bonds offer: This offer is addressed to QualifiedInvestors and is comprised of any Bonds that remain unsubscribedafter the close of the Pre-emptive Offer minus the Bonds that aresubscribed by the Lead Investor in the Tranche A Bonds offer.The Pre-emptive Offer and the Tranche B Bonds offer are governed solely by the terms ofthis Prospectus, as well as the other Bond Agreements other than the Tranche A BondsSubscription Agreement.The Tranche A Bonds offer are governed by the terms of this Prospectus as well as by theTranche A Bonds Subscription Agreement, the main terms of which are disclosed in thisProspectus, including in Annexes 1 and 2A.Subscription method for the Pre-emptive Offer/Exercise of Pre-emptive Rights:The Bonds will first be offered to Shareholders as at the Registration Date who will beentitled, subject to the Prospectus, to exercise pre-emptive rights to purchase Bonds up to amaximum aggregate principal amount equal to the product of Euro 30,000,000 times afraction, the numerator of which is equal to the aggregate number of Shares held by suchshareholder as of May 21, 2012, and the denominator of which is equal to the aggregatenumber of Shares issued and outstanding on May 21, 2012 .The maximum number of theBonds that can be purchased by each entitled shareholder as of May 21, 2012 is equal to thepreviously mentioned product divided by 0.6. No fractional Bonds shall be issued. If afractional number of Bonds results, the number of Bonds will be rounded as follows: if thefraction is equal to or less than one-half, the number of Bonds will be rounded down to thenext whole Bond; and if the fraction is greater than or equal to one-half, the number ofBonds will be rounded up to the next whole Bond. The Pre-emptive Offer will begin on09.04.2013 and continue for a period of thirty (30) calendar days until 08.05.2013, at theBroker’s head offices and the CNVM authorized agencies of BT Securities between 9.00-16.00 each Business Day, except for the last day (08.05.2013), which will close at 14.00.Subscriptions in the Primary Offer:Tranche A Bonds offer: The Tranche A Bonds will be issued in an aggregate principalamount of up to Euro 18,938,347.80 consisting of 31.563.913 Bonds, and are reserved forsubscription by International Finance Corporation as Lead Investor pursuant to the TrancheA Bond Subscription Agreement. In accordance with the Tranche A Bond SubscriptionAgreement, IFC agreed to subscribe and buy all Tranche A Bonds, subject to the conditionsprecedent and the termination provisions stipulated in Annex 1 to the Prospectus.The Issuer and the Lead Investor concluded a Tranche A Bond Subscription Agreementunder English law which documents the agreement of the Issuer to reserve the Tranche ABonds for the Lead Investor. The Tranche A Bond Subscription Agreement contains certainundertakings by the Issuer detailed in the Undertakings provided in Annex 2A to theProspectus which mainly represent standards which will increase the performance of the112

Bank for the benefit of the Bondholders. In accordance with the Tranche A BondsSubscription Agreement, the Lead Investor’s obligation to buy Bonds is subject to certainconditions precedent, as detailed in Annex 1 to this Prospectus. Likewise, the Lead Investorhas the right to terminate the Tranche A Bonds Subscription Agreement before itssubscription within the Primary Offer, if certain events such as those detailed in Annex 1 tothis Prospectus occur. In case of termination of the Tranche A Bonds SubscriptionAgreement, the purchaser of Tranche A shall not be entitled to subscribe to the Tranche BBonds.. Furthermore, the Lead Investor is entitled to certain fees that have been outlined inSection ”Pricing” in Section 3 Offer Conditions, in II. Bonds Terms and Conditions of thisProspectus and that concern its role as Lead Investor investing in the reserved Tranche ABonds.Tranche B Bonds offer: The Tranche B Bonds will be the unsubscribed Bonds from the PreemptiveOffer and excluding the ones subscribed in Tranche A Bonds.Only Qualified Investors can subscribe in this tranche BThe results of the Pre-emptive Offer and the number of the Bonds object of the PrimaryOffer, i.e. the number of the Bonds of Tranche A and, respectively, Tranche B will beannounced through a press release in a national newspaper on the first Business Day of thePrimary Offer.Following the closing of the Pre-emptive Offer, the Lead Investor may subscribe forTranche A Bonds and Qualified Investors may subscribe for Tranche B Bonds, in thePrimary Offer respectively, beginning on the first Business Day after the closing of the PreemptiveOffer, from 09.05.2013 until 21.05.2013 at the broker’s head offices the CNVMauthorizedagencies of BT Securities from 9.00-16.00 each Business Day, except for theOffering closing day, which will close at 14.00;The Lead Investor is entitled to subscribe in the Primary Offer up to Euro 18,938,347.80consisting of up to 31,563,913 Bonds.The Lead Investor may exercise its right to subscribe in the Pre-emptive Offer up to its prorata share of its shareholding in the Issuer and during the Pre-emptive Offer Period on theterms of this Prospectus. The Lead Investor can then subscribe up to maximum Euro18,938,347.80 within the Primary Offer Period, where those Tranche A Bonds would bereserved and allocated to the Lead Investor regardless of Tranche B subscription bids, on theterms of this Prospectus and the Tranche A Bond Subscription Agreement.Upon the subscription by the IFC of the Tranche A Bonds, but no later than the last day ofthe Offer, 10:00 a.m. (Bucharest time), the Issuer shall send a current report to BVB on theperformance of the subscription to Tranche A Bonds.On the last day of the Offer, if IFC has not subscribed the Tranche A Bonds, they shall beallocated to the Tranche B Bonds. The Issuer, on the same day, by 10:00 a.m. (Bucharesttime) shall send a current report to BVB mentioning the allotment of the Tranche A Bondsto Tranche B Bonds. This current report on the reallocation of the Tranche A Bonds toTranche B Bonds shall not and cannot be considered an amendment to the Prospectus.113

On the Allocation Date the Tranche A Bonds will be first allocated to IFC and then theTranche B Bonds, provided there are remaining Bonds available for this tranche, will beallocated to Qualified Investors on pro-rata basis in the case of over-subscription.The Offer will be considered successfully closed, if there are subscribed Bonds in anaggregate amount of minimum 20.000.000 Euro. In the event that the offer is not entirelysubscribed by the end of the subscription period the Bonds which will remain unsubscribedafter the closing of the Pre-emptive Offer and Primary Offer will be annulled.In case the Offer is not subscribed up to the successful threshold mentioned above, theamounts subscribed will be reimbursed to the investors within 10 Business Days as of theclosing of the Offer, by banking transfer in the banking account mentioned in thesubscription form.The Broker shall send the Bondholders a confirmation certifying the ownership over theBonds subscribed and allotted at the issuance date.The results of the Offer shall be published in a national newspaper within 5 Business Daysas of the date on which the CNVM confirmed that it had received the notification of theIssuer regarding the result of the offering of Bonds.Reasons beyond the Issuer or Intermediary’ control can cause delays in data processing orin the transmission to CNVM of the notification concerning the results of the offering ofBonds or in obtaining the confirmation regarding the receipt by the CNVM of the abovementioned notification. Therefore, the Broker and the Issuer are not responsible in any wayif the amounts are reimbursed with delay to the investors, if the subscriptions are notvalidated or if the transferred amount is greater than the amount subscribed.Distribution and allocation plan of securitiesOnly those shareholders of the Bank who are registered in the Shareholders' Register on May21, 2012 can subscribe Bonds within the pre-emption right period.The Tranche A Bonds will be allocated to the International Finance Corporation as LeadInvestor pursuant to the Tranche A Bond Subscription Agreement.In case the Tranche B will be oversubscribed, the allocation of the Bonds will be done by the“Pro-rata method” principle.The allocation will be done in the first Business day after the closing of the Primary Offer.The amounts for the invalided subscriptions or the amounts exceeding the allotted Bonds will114

e returned to the subscribers in 10 Business days, after the Allocation Date in the Bankaccounts mentioned in the subscription form.Price settingThe offering consisting of the sale of 50.000.000 Bonds issued by Banca Transilvania, withthe following features:• 50.000.000 registered securities issued in dematerialized form, evidenced by bookentry securities;• Issue price: 0.6 EURO• Nominal value: 0.60 Euro/Bond;The commission due to the Broker for all operations related to the mediation and distributionof the offering of Bonds issued by Banca Transilvania is 0.25% applied to the total value ofsubscribed Bond issuance. The respective fee is incurred entirely by the Issuer.The Issuer shall pay to the Lead Investor:(A) As consideration for the Lead Investor's commitment to subscribe for the Tranche ABonds in the Primary Offer, a commitment fee at the rate of 0.5% on the amount of theprincipal amount of EUR 18,938,347.80 from the signing date of the Tranche A Bondsubscription Agreement until the Issue Date. The commitment fee shall be calculated on thebasis of a 360-day year and the actual number of days in the relevant period, and be payableon the first Interest Payment Date.(B) a front end fee of 1% on the amount subscribed by IFC in the Primary Offer, covering theTranche A Bonds investment related processing costs;(C) The Issuer shall pay all taxes (including stamp taxes), duties, fees or other chargespayable on or in connection with the execution, issue, and, where appropriate, registrationnotarization or translation of the Tranche A Bond Subscription Agreement."The Issuer shall pay or cause to be paid to the Lead Investor or as the Lead Investor maydirect:i) all of the Lead Investor’s reasonable costs and expenses, including legal fees incurredin connection with the Lead Investor’s purchase of the Tranche A Bonds up to a maximumamount of EUR 30,000.(ii) In line with applicable law, and subject to any mandatory provisions or requirementsof Regulation 18/2006, all of the Lead Investor’s reasonable costs and expenses, includinglegal fees, incurred by the Lead Investor in relation to the protection or enforcement, or115

attempted protection or enforcement, of any rights under the Tranche A Bond SubscriptionAgreement or the Prospectus as it relates to the Tranche A Bonds, or any other documentsrelated to any thereof.Placing and UnderwritingBT Securities and the BankThe Bank holds 98.67 % of the share capital of BT Securities S.A., the Broker, Paying Agentand the Distribution Agent of this Offer. In connection with the Offer, the Bank will bepaying certain fees to BT Securities, i.e. a fee of 0.25% from the amount of the subscribedOffer.International Finance Corporation – Lead InvestorIFC as Lead Investor has agreed to subscribe to and purchase the Tranche A Bonds to beissued by Banca Transilvania through BT Securities as Broker subject to the terms andconditions of the Tranche A Bond Subscription Agreement summarized in the Prospectus.IFC is an international organization established in 1956 pursuant to the Articles of Agreementwhich govern its operations. As of June 30, 2012, 184 countries were IFC shareholders. Theprincipal office of IFC is located at 2121 Pennsylvania Avenue, N.W., Washington, D.C.20433, United States of America. More information about IFC can be found at www.ifc.orgIFC and the BankIFC as the Lead Investor has entered into the Tranche A Bond Subscription Agreement, inconnection with the Tranche A Bonds offer of the Primary Offer.Subscription and PaymentThe Pre-emptive Offer will begin on 09.04.2013 and continue for a period of thirty (30)calendar days until 08.05.2013 in order for the shareholders registered on the RegistrationDate in the Issuer’s Shareholders’ Register kept with the Central Depositary to exercise theirpre-emptive right at the head offices of the Broker (Cluj-Napoca, bld. 21 Decembrie 1989,nr.104, et.1) and CNVM authorized agencies of BT Securities from 9.00-16.00 each BusinessDay except for the day of the Offer, 08.05.2013, which will close at 14.00.The Primary Offer commences on the first Business day, after the expiry of the Pre-emptionPeriod and continues for a period of 9 Business days until 21.05.2013 in order for theTranche A and Tranche B investors to subscribe the Bonds according to the terms andconditions provided in the Prospectus and the Bond Subscription Agreement.116

Bonds may be subscribed during the relevant Offer period (Pre-emptive Offer and PrimaryOffer) by; (i) delivering the purchase price in the principal amount of the Bonds subscribed indenominations of Euro by transfer to the account RO94 BTRL 0130 4202 9256 89XX, inEuro in the name of the Broker – BT Securities, opened with Banca Transilvania, Cluj branchor the settlement undertaking letter issued by a custodian agent (ii) completing a subscriptionform (2 original copies), which will be available at the headquarters of the Broker andCNVM authorized agencies of BT Securities (iii) providing appropriate identificationdocuments (as listed below) and proof of payment, if payment was made by transfer or thesettlement undertaking letter issued by a custodian agent. If the Bonds are paid by paymentorder, this must contain the National Identification Number / passport no. for individuals andthe Tax Identification Number for companies. In order to be accepted, the completed andsigned subscription form must be submitted in original along with the following documents:1. For resident individuals who subscribe on their own behalf:- Identity card (original and/or copy)- The proof of payment (copy of the payment proof issued by the paying Bank).2. For resident individuals who subscribe on other individuals’ behalf- Identity card (original and/or copy)- The proof of payment (copy of the payment proof issued by the paying Bankand).- Notarized power of attorney (original and copy).3. For resident individuals who subscribe on behalf of a minor:- The proof of payment (copy of the payment proof issued by the paying Bank).- Birth certificate and/or tutor proof (original and copy).- Identity card (original and copy)4. For disabled or temporarily mentally ill resident individuals:- Identity card (original and/or copy)- The proof of payment (copy of the payment proof issued by the paying Bank)- Legal documents proving guardianship (original and copy).5. For non-resident individuals who subscribe on their own behalf:- Passport (original and/or copy)- The proof of payment (copy of the payment proof issued by the paying Bank ).6.For resident legal entities that subscribe on their own behalf:- Copies of the identification documents of the legal entity (statute, charter,etc.), evidencing the legal representatives of the legal entity,- registration certificate- The proof of payment (copy of the payment proof issued by the paying Bank117

and)- Authorization in original for the individual who signs the subscription form;- ID of the representative of the legal entity/legal representative7.For non-resident legal entities:- Copies of the identification documents of the legal entity: constitutivedocuments of the legal entity (statute, charter, etc.), evidencing the legalrepresentatives of the legal entity,- registration certificate- The proof of payment (copy of the payment proof issued by the paying Bankand/or the payment in cash)- Authorization in original for the individual who signs the subscription form;- ID of the representative of the legal entity/legal representative8.For non-resident individuals who subscribe by authorization:- Passport (copy for the non-resident individual)- Identity card (original and copy for the mandated)- The proof of payment (copy of the payment proof issued by the paying Bank)- Authorization/mandate by which the authorized person can perform operationson behalf of, and with the cash of, the non-resident individual.9.For resident legal entities that subscribe on behalf of other non-resident legal entities:- Copies of the identification documents of the legal entity: constitutivedocuments of the legal entity (statute, charter), evidencing the legalrepresentatives of the resident legal entity,- registration certificate- The proof of payment (copy of the payment proof issued by the paying Bank)- Mandate/order from the non-resident company for performing the subscription- Original authorization for the individual who signs the subscription form.10. Credit or financial institution, from a Member State of the European Union or theEuropean Economic Area, or, where applicable, a credit of financial institution from athird party.• Identification documents of the institution, evidencing the headquarter, institutiontype, place of incorporation and legal representatives – original• Original authorization for the individual who signs the subscription form• Identity card of the legal representative/the individual who signs the subscription form• The proof of payment11. EBRD• A copy of the Agreement Establishing the EBRD• A copy of the Headquarters Agreement of EBRD• Certificate of Secretary for the person who signs the subscription form and ifapplicable, the PoA - original –• A copy of identity card of passport for the person who signs the subscription form;• Proof of payment118

12. IFC• A copy of the Romanian Law on IFC• Certificate of Secretary for the person who signs the subscription form orthe power of attorney.–• A copy of identity card or passport for the person who signs thesubscription form;• Proof of payment* For non-resident legal entities and individuals, all required documents must be translatedand legalized.Validity of SubscriptionA subscription for Bonds where the purchase price is paid by transfer is valid only if the totalpurchase price of the subscribed Bonds' value arrives in the Broker’s account mentionedabove• for the Pre-emptive Offer until 15.00 Bucharest time, on the last day of the PreemtionOffer• for the Primary Offer until 15.00 Bucharest time on the last day of the Primary Offer.For investors using custodian banks, the subscription will be based on the custodian bank'sguarantee of the settlement for the subscribed sum on the Allocation Date. The sumtransferred by the custodian bank have to be on BT Securities account, until 15.00 (BucharestTime) on the Allocation Date. Any subscriptions that are not valid will not enter in theallocation process. If a deposited sum is greater than the sum necessary to subscribe for thenumber of requested Bonds, the request will be validated for the number of requested Bonds.If the deposited amount is smaller than the amount required for the subscription to the Bondsrequested in the subscription form, the subscription shall be invalidated for the entirequantity.Irrevocability of SubscriptionSubscriptions made in the Offer are irrevocable. If the Prospectus is subject to an amendment,the subscriptions can be revoked within three (3) days from the date of the amendment beingpublished.Subscription revocation can only be made at the same office where the Subscription has beenmade. In this case, subscribers will fill in a subscription revocation form. In case of asubscription revocation, the amounts corresponding to the subscribed Bonds will be returnedto the subscribers through a transfer to a bank account designated by the subscriber in thesubscription form. Payments corresponding to the revocations shall be made within 10Business Days after the Allocation Date.119

Allocation MethodDuring the Pre-emptive Offer, Bonds may be subscribed only by the Bank’s shareholdersregistered in the Shareholders’ Register as at May 21, 2012.The Tranche A Bonds will be allocated to the International Finance Corporation as LeadInvestor pursuant to the Tranche A Bond Subscription AgreementIn case the Tranche B will be oversubscribed, the allocation of the Bonds will be done by the“Pro-rata method” principle.The allocation will be done in the first Business day after the closing of the Primary Offer.If the number of the Bonds subscribed in Tranche B is lower than the offered Bonds, theunsubscribed Bonds will be annulled.In case the Offer is not subscribed up to the successful threshold of minimum Euro20.000.000, the amounts subscribed will be reimbursed to the investors within 10 BusinessDays as of the closing of the Offer, by banking transfer in the banking account mentioned inthe subscription form.The amounts for the invalided subscriptions or the amounts exceeding the allotted Bonds willbe returned to the subscribers in 10 Business days, after the Allocation Date by bankingtransfer in the bank accounts mentioned in the subscription form.Amendment of Offer TermsThe Bank reserves the right to amend the Offer's terms before subscription in the Pre-emptiveOffer, subject to the prior approval of the CNVM, which amendment will be published in thesame manner as the Offer, as required by law.Settlement; Issuance of the Bonds and Transfer of Ownership Rights over the BondsOn the Issue Date, which is estimated to be 22.05.2013, the first Business day after theclosing of the Primary Offer:• the Bond Registry shall be prepared by the Broker;• the Broker shall prepare and send to CNVM the notification regarding the Offerresults• the Broker shall transfer the Bond Registry to the Registrar;• the Bonds shall be issued and the ownership rights over the Bonds shall be transferredto the Bondholders by registration in the Bond Registry; and• the Broker shall send to the Bondholders confirmation certifying the ownership rightover the Bonds.After the Issue Date, the Bonds shall be registered with the securities record departmentwithin CNVM.120

The Offer is considered successfully closed, if on its closing date, a minimum aggregateamount of 20.000.000 Euro is validly subscribed.Representations and Warranties of the Issuer; IndemnificationUnder the Tranche A Subscription Agreement, the Bank makes certain representations andwarranties regarding itself and Tranche A Bonds, and the Bank agrees such representationsand warranties, as detailed in Annex 2B be made in relation to all Bonds and for the benefitof all Bondholders. For the avoidance of doubt, failing to comply with any of theserepresentations and warranties of the Bank shall not represent an Event of Default and cannotconsequently trigger the early repayment, acceleration or the increase in the initial costs. TheBank also agrees to an indemnification clause which will apply to all Bondholders as follows:Provided that these indemnities can be claimed only in the bankruptcy or liquidationprocedure of the Issuer together with the principal claim and subordinated to any otherunsubordinated claims, in compliance with the Regulation 18/2006 and any supplementaryTier II Capital legislation; The Issuer agrees to indemnify the Bondholders for damagesarising out of (i) any untrue statement contained in the Prospectus or any of the BondsAgreement or any omission to state a material fact necessary to make the statements thereinnot misleading; (ii) any misrepresentation or breach by the Issuer of any of its representationsand warranties and/or obligations arising under or relating to the Prospectus, the BondsAgreement, the Bonds, the Terms and Conditions of the Bonds (iii) any restriction, delay,dilution or other limitation on the exercise of the Bondholders’ conversion rights (iv) anycancelation, withdrawal or invalidation of any Authorization necessary, required or advisablepursuant to the Issuer’s Articles of Association, Regulation 18/2006 and supplementarylegislation or the applicable law in connection with the Offer, the issue and sale of the Bonds,including without limitation, any extra ordinary general meeting (EGM) resolution and/orBoard of Directors’ decision approving the creation, issue and sale of the Bonds and/orexecution of any Offer document and/or Bonds Agreement , including failure to convene anew EGM to reinforce the mandate the Board of Administrations to increase the sharecapital and issue the Shares to the converting Bondholder, if needed.The Bank represents and warrants, to the best of its knowledge, that the terms and conditionsof this Bond issue are in compliance with Regulation 18/2006, and that it has undertaken allreasonable efforts to ensure such compliance. NBR has not issued a confirming opinion onthis point.Preparation of the ProspectusThis Prospectus has been prepared by the Bank and BT Securities. Each of the Bank,represented by Mr. Nicolae Tarcea - Deputy General Manager and BT Securities, represented121

y Mr. Rares Nilas, General Manager, accepts the responsibility for the contents of theProspectus and confirms that the information contained herein is accurate, and that they donot contain omissions that could affect significantly the contents of the Prospectus.4. ADMISSION TO TRADING AND TRADING METHODSThe Issuer does not intend to trade its Bonds at the BVB, and the Bonds will not be admittedfor trading on a regulated market or any other trading platform (alternative, multilateraltrading facilities), and according to its knowledge, there are no other regulated markets oralternative systems where securities of the same class with the bid are admitted to trading.Nor is there a firm commitment between the Issuer and another brokerage companyregarding the trading of securities on the secondary market for the provision of liquidity bydisplaying quotations of sale and purchase.5. ADDITIONAL INFORMATIONNo opinions of a consultant were used in the drafting of this note.ISSUER,BANCA TRANSILVANIA S.A.Deputy CEONicolae Tarcea[illegible signature]BROKERBT SECURITIES S.A.General ManagerRareş Nilaş[illegible signature]Deputy CEOLuminiţa Runcan[illegible signature]122

ANNEX 1Conditions of the Tranche A Purchaser’s ObligationsConditions of the Tranche A Purchaser's Obligations.The obligation of the Tranche A Purchaser to purchase the Tranche A Bonds pursuant to theTranche A Bond Subscription Agreement is subject to the following conditions precedent listedbelow, with the observance by the Issuer of the applicable legislation regarding equal treatmentof investors as regards disclosure of information, and further provided that the Issuer ensures thatnothing in the documents received by IFC shall contain any “privileged” information ( as suchterm is defined by the Capital Markets Law).As of the First Business Day of the Primary Offer:(a) The Prospectus as authorized by CNVM is in form and substance acceptable to IFC;and (ii) the other Bond Agreements, as signed are in form and substance acceptable toIFC;(b) the Tranche A Purchaser shall have received a certificate signed by any two (2)Authorized Representatives of the Issuer, or any other officer duly designated by any of theabove, dated the date of the start of the Primary Offer Period, to the effect that:(i) the representations and warranties of the Issuer contained in the Tranche A BondSubscription Agreement and the Prospectus are true and correct at the start of the PrimaryOffer Period as though made at and as of the start of the Primary Offer Period; and(ii) each of the Issuer and the Broker has performed all of its respective obligations tobe performed under the Tranche A Bond Subscription Agreement and/or under theBrokerage and Distribution Agreement, and the Paying Agent Agreement and theRegistrar Agreement, as applicable, required to be performed or satisfied on or prior to;the start of the Primary Offer Period;123

(c) the Tranche A Purchaser shall have received a certificate signed by two (2) AuthorizedRepresentatives of the Issuer, dated the date of the start of the Primary Offer Period, certifying asto the validity and effectiveness of the Articles of Association of the Issuer and the resolutionsadopted by the shareholders of the Issuer pursuant to the April 2012 and October 2012 EGMSResolution and the 2013 Board Resolution, respectively, approving the creation, issuance, saleand execution of the Tranche A Bonds and the Terms and Conditions of the Tranche A Bonds,and the incumbency and authenticity of signatures of relevant officers of those persons executingsuch documents;(d) the Board of Directors shall have duly approved the Prospectus, the entry by the Issuerinto the Bonds Agreements and shall have nominated one or more individuals to execute theProspectus and such Bonds Agreements on behalf of the Issuer; including the Tranche A BondsSubscription Agreement on behalf of the Issuer;(e) all proceedings taken at or prior to the date of the start of the Primary Offer Period inconnection with the authorization of the Bonds shall be satisfactory, in form and substance, tothe Tranche A Purchaser, and the counsel of the Issuer shall have provided to the Tranche APurchaser all such counterpart originals or certified or other copies of such documents,certificates and opinions as the Tranche A Purchaser may reasonably require in order to evidencethe accuracy and completeness of any representations and warranties, the performance of anyagreements and covenants or the compliance with any of the conditions herein contained;(f) the following Bonds Agreements, in form and substance satisfactory to the Tranche APurchaser, shall have been entered into by the respective parties, and each of such Agreementsmust be continuing in full force and effect, and a copy of each such Agreements shall have beenfurnished to the Tranche A Purchaser :(i) the Tranche A Bond Subscription Agreement(ii) the Brokerage and Distribution Agreement;(iii) the Registrar Agreement; and(iv) the Paying Agent Agreement;(g) the Tranche A Purchaser shall have received an opinion of the counsel of the Issuer,dated the date of the start of the Primary Offer Period, addressed to the Tranche A Purchasercovering matters related to the validity and legally binding effect of the Prospectus and the BondAgreements, compliance with the Romanian law, the qualification of the Bonds assupplementary Tier II capital under Romanian legislation, the validity of the conversion of theTranche A Bonds and such other ancillary matters thereto.(h) the Tranche A Purchaser shall have received (i) a letter, dated the date of the start of thePrimary Offer Period, of the counsel of the Issuer, addressed to the Tranche A Purchaser, statingthat the Prospectus has been prepared under their supervision save for any financial statements ordata contained in the Prospectus124

(i) the Tranche A Purchaser shall have received from it legal counsel a legal opinion, datedthe date of the start of the Primary Offer Period, addressed to the Tranche A Purchaser, in formand substance acceptable thereto;(j) the Issuer shall have issued a letter, dated the date of the start of the Primary Offer Periodand addressed to its external auditors, in a form pre-agreed pre-agreed provided , for theavoidance of doubt, that nothing in that letter shall contain any information the communicationof which to the Tranche A Purchaser may be in violation of the applicable capital markets law(k) before 7:00 a.m. (Bucharest time) on the date of the start of the Primary Offer Period,there shall not have occurred any national or international calamity or development, crisis of apolitical or economic nature, or change in the money or capital markets in which the Bonds arebeing offered, the effect of which on such money or capital markets, in the judgment of theTranche A Purchaser or the Issuer, shall be such as materially and adversely to affect the abilityof the Issuer to perform its obligations under the Tranche A Bonds;(l ) the Prospectus shall have been registered with, and approved by, the CNVM; and theIssuer shall have delivered to the Tranche A Purchaser three (3) copies of the Prospectus and ofeach amendment or supplement thereto, signed by two ((2) authorized representatives of theIssuer;( m) the Issuer shall have notified the Tranche A Purchaser if at any time during which theProspectus is used in connection with the Offer and sale of the Tranche A Bonds (in the view ofthe Tranche A Purchaser), any event shall have occurred as a result of which, in the judgment ofthe Issuer, the Prospectus would include any untrue statement of a material fact or omit to stateany material fact necessary to make the statements therein, in the light of the circumstancesunder which they are made when such Prospectus is delivered, not misleading and, upon requestfrom the Tranche A Purchaser, shall have promptly prepared and furnished, without charge to theTranche A Purchaser, as many copies, as the Tranche A Purchaser may from time to timereasonably request, of an amended Prospectus or a supplement to the Prospectus which willcorrect such statement or omission;(n) the Issuer shall have promptly furnished to the Tranche A Purchaser copies of financialstatements and other periodic reports that the Issuer may furnish generally to all holders of itsdebt securities;(o) the Issuer shall not have made, or permitted to become effective, any amendment to anyof the Bonds Agreements which may adversely affect the interests of the Tranche A Purchaser inthe Tranche A bonds, and shall have promptly notified the Tranche A Purchaser of anytermination of, or amendment to, any of the Bonds Agreements, and of any replacement orsubstitution of the Paying Agent;(p) the Issuer shall have furnished to the Tranche A Purchaser the Certificate of Incumbencyand Authority, , evidencing the authority of the person or persons who will, on behalf of theIssuer, sign the requests and certifications provided for, the Prospectus, any of the relevantBonds Agreement to which the Issuer is a party signatory, or take any other action or execute any125

other document required or permitted to be taken or executed by the Issuer under the Tranche ABonds Subscription Agreement, the Prospectus, any of the relevant Bonds Agreements to whichthe Issuer is a party signatory, and the authenticated specimen signature of each such person;(q) the Issuer shall have delivered to the Tranche A Purchaser evidence of an appointment ofan agent for service of process required under the Tranche A Bond Subscription Agreement;.(r) the legal fees and expenses of the legal counsel shall have been paid by the Issuer, orother arrangements, satisfactory to the Tranche A Purchaser, shall have been made for theprompt payment thereof by the Issuer.Termination. (a) The Tranche A Purchaser may, by notice to the Issuer, terminate thisTranche A Bond Subscription Agreement before its subscription in the Primary Offer(i) if any of the April 2012 EGMS Resolution, October 2012 EGMSResolution or the Board Resolution of February 26, 2013 is challenged;(ii)(iii)(iv)if there shall have come to the notice of the Tranche A Purchaser anymaterial breach of, or any event rendering untrue or incorrect in anyrespect, any of the warranties and representations contained in the TrancheA Bonds Subscription Agreement, the Prospectus, or in any of the BondsAgreements, or any of the documents related to any thereof, or any failureto perform any of the Issuer’s undertakings or agreements in thisAgreement, the Prospectus, or any Bonds Agreement, or any of thedocuments related to any thereof;if any of the conditions specified in the Tranche A Bonds SubscriptionAgreement, the Prospectus, or in any of the Bonds Agreements, or any ofthe documents related to any thereof, have not been satisfied or met to thesatisfaction of the Tranche A Purchaser by the start of the Primary OfferPeriod unless previously waived by the Tranche A Purchaser; orif subscription of the Tranche A Bonds has not occurred within onecalendar year after the date of the Tranche A Bonds SubscriptionAgreement.(b) The Tranche A Purchaser or the Issuer may, each by notice to the other, terminatethe Tranche A Bond Subscription Agreement at any time before subscription, if in the opinion ofthe Tranche A Purchaser or the Issuer, as the case may be, there shall have occurred a materialadverse effect, any national or international calamity or development, crisis of a political oreconomic nature, or change in the money or capital markets in which the Tranche A Bonds arebeing offered, In the event that any party terminates this Agreement pursuant to this clause, theIssuer or the Broker (as the case may be) undertakes to inform the investors to which theProspectus is addressed that the subscriptions for the Bonds shall not be validated and settled ifthe success condition in the Prospectus is not met.126

In case of termination of the Tranche A Bonds Subscription Agreement as provided above, theTranche A” purchaser shall not have a right to subscribe to the Tranche B Bonds.127

ANNEX 2A - UndertakingsThe following are the main undertakings that the Issuer has committed to in the ““Tranche A Bond Subscription Agreement”. They mostly incorporate standards which willincrease the performance of the Bank for the benefit of the Bondholders. The breach ofthese undertakings does not constitute an event of default and consequently cannot triggerthe acceleration, early repayment of the Bonds or an increase in the initial costs. For theavoidance of doubt, The Events of Default triggering an acceleration are:(a) If the Issuer fails to pay on due date any principal of, or interest on the Bonds outstandingunder the Prospectus, the Bondholders may, in compliance with the Regulation 18/2006,commence the bankruptcy and the subsequent liquidation proceeding against the Issuer inaccordance with Romanian law and will be able to request the repayment of the Bonds onlywithin the bankruptcy or liquidation procedure of the Issuer..(b) As long as any portion of the Bonds qualifies as subordinated indebtedness the Bondscannot be accelerated. However, if there shall have been entered against the Issuer a decree ororder by a court or other competent authority declaring the Issuer Bankrupt, or any resolution hasbeen passed for the liquidation within the insolvency proceedings of the Issuer, or a court orother competent authority has made a decision to commence bankruptcy proceedings against theIssuer, then such will be the only situation under the Prospectus provided that the Bonds will bequalified as supplementary Tier 2 Capital when the Bondholders may declare the principal of,and all accrued interest on, the Bonds to be, and the same shall thereupon become, immediatelydue and payable by the Issuer without any further notice and without any presentment, demandor protest of any kind, all of which are hereby expressly waived by the Issuer. For the avoidanceof doubt, in any such bankruptcy or liquidation of the Issuer, the payment of any amountspayable shall be subordinated to the payment of all unsubordinated indebtedness.1- Financial Undertakings: BT has committed to keep to the following financial ratios:(i) a Risk Weighted Capital Adequacy Ratio of not less than twelve percent (12%);(ii) an Equity to Assets Ratio of not less than five percent (5%);(iii)an Economic Group Exposure Ratio of not more than twenty five percent (25%);(iv) an Aggregate Large Exposures Ratio of not more than four hundred percent (400%);(v) a Related Party Exposure Ratio of not more than fifteen percent (15%), excludingexposure of the Issuer to any wholly owned operating subsidiary of the Bankinvolved in financial services;(vi) an Open Credit Exposures Ratio of not more than twenty five percent (25%);(vii)a Fixed Assets Plus Equity Investments Ratio of not more than thirty five percent(35%);(viii) an Aggregate Foreign Exchange Risk Ratio of not more than twenty percent (20%);(ix) a Single Currency Foreign Exchange Risk Ratio of not more than ten percent (10%);(x) an Interest Rate Risk Ratio of not less than negative ten percent (-10%) and not more thanten percent (10%);(xi) an Aggregate Interest Rate Risk Ratio of not less than negative twenty percent (-20%)and not more than twenty percent (20%);128

(xii) a Foreign Currency Maturity Gap Ratio of not less than (i.e. more negative than)minus one hundred and fifty percent (-150%);(xiii) an Aggregate Negative Maturity Gap Ratio of not be less than (i.e. more negativethan) minus three hundred percent (-300%)The Bank shall also comply with the regulatory requirements of NBR.Definitions of Capitalized Terms can be made available by the Issuer upon request.2- Reporting UndertakingsFor as long as any Bonds are outstanding, in addition to any legal reporting requirements underthe Law, in compliance with the capital market legislation the Issuer shall make available to theBondholders (a) within (120) days after the end of each fiscal year of the Issuer, an auditedconsolidated balance sheet of the Issuer and its subsidiaries and related statements of operations,stockholders' equity and cash flows for such fiscal year; (b) within (60) days after the end of eachof the first three fiscal quarters of the Issuer, an unconsolidated balance sheet of the Issuer andrelated statements of operations, stockholders' equity and cash flows as of the end of and for suchfiscal quarter; (c) upon request ,within 60 days after the end of each fiscal quarter, the positionon each of the Financial Undertakings listed in Clause 1 above and such financial and operatingdata and other information as may from time to time be reasonably requested.3. Indemnification by Issuer in relation to the Bond related DocumentsUnder the Tranche A Subscription Agreement, the Bank makes certain representations andwarranties regarding itself and Tranche A Bonds, and the Bank agrees such representations andwarranties be made in relation to all Bonds and for the benefit of all Bondholders. For theavoidance of doubt, failing to comply with any of these representations and warranties of theBank shall not represent an Event of Default and cannot consequently trigger the earlyrepayment, acceleration or the increase in the initial costs. The Bank also agrees to anindemnification clause which will apply to all Bondholders as follows.129

Provided that these indemnities can be claimed in the bankruptcy procedure of the Issuertogether with the principal claim and subordinated to any other unsubordinated claims, incompliance with the Regulation 18/2006 and any supplementary Tier II Capital legislation; TheIssuer agrees to indemnify the Bondholders for damages arising out of (i) any untrue statementcontained in the Prospectus or any of the Bonds Agreement or any omission to state a materialfact necessary to make the statements therein not misleading; (ii) any misrepresentation orbreach by the Issuer of any of its representations and warranties and/or obligations arising underor relating to the Prospectus, the Bonds Agreement, the Bonds,, the Terms and Conditions of theBonds (iii) any restriction, delay, dilution or other limitation on the exercise of the Bondholders’conversion rights (iv) any cancelation, withdrawal or invalidation of any Authorizationnecessary, required or advisable pursuant to the Issuer’s Articles of Association , Regulation18/2006 and supplementary legislation or the applicable law in connection with the Offer, theissue and sale of the Bonds, including without limitation, any extra ordinary general meeting(EGM) resolution and/or Board of Directors’ decision approving the creation, issue and sale ofthe Bonds and/or execution of any Offer document and/or Bonds Agreement , including failureto convene a new EGM to reinforce the mandate the Board of Administrations to increase theshare capital and issue the Shares to the converting Bondholder, if needed.4. Policy Undertakings(a) Undertakings by the Bank contained in the policy rights annex of the Tranche A BondSubscription Agreement related to environmental and insurance aspects, which can bemade available by the Bank upon request of a Bondholder. These undertakings areeffective for as long as the Bonds are outstanding and continue to be in force afterthe conversion of the Bonds into Shares.(b) undertaking by BT to adopt the above mentioned undertakings as policies of the Bankadopted by the Board of the Bank and presented to the shareholders of the Issuer at the nextExtraordinary General Meeting immediately following the Issue Date with a proposal for theBank to adopt these policies as Bank Policies and to amend the Articles of Association of theBank to reflect them accordingly.5. Other UndertakingThe Bank to undertake that its business, activities and investments, and cause each of itssubsidiaries to undertake their business, activities and investments, in compliance withapplicable law;- The Issuer agrees and undertakes to the Tranche A Purchaser that the Issuer shall ensure that,upon the conveyance of Ordinary General Meeting of the Shareholders of the Issuer to be held ata time following the date of the Tranche A Bond Subscription Agreement and having on the130

agenda the election of the members of the Board of Directors, the Tranche A Purchaser will begranted the right to propose an independent director to be elected as member of the Board ofDirectors, subject to the requirements of, and in accordance with, the applicable law.- EGMS Resolution. The Issuer agrees and undertakes to the Tranche A Purchaser that, not laterthan January 2015, the Issuer shall arrange for a EGMS to be called with a view to reiterate thatthe Bonds will not be admitted to trading and a EGMS to be called anytime needed throughoutthe life of the Bonds to extend the powers of the Board of Administration to increase the sharecapital and issue of shares upon conversion if limited in time, to cover the period until the finalmaturity of the Bonds. .131

Annex 2B - RepresentationsThe Bank makes the following representations in relation to all Bonds and for the benefit of allBondholders. For the avoidance of doubt, failing to comply with any of these representations andwarranties of the Bank shall not represent an Event of Default and cannot consequently triggerthe early repayment, acceleration or the increase in the initial costs.(a) the terms and conditions of the Tranche A Bonds shall be as set forth in the Terms andConditions of the Bonds and will be no less favorable to the Lead Investor as the terms andconditions of any other Bonds offered by the Issuer to any other Person;(b) the Prospectus complies with the Romanian law and the prevailing capital market lawsand regulations of Romania and all other applicable laws, and does not, and will not, contain anyuntrue statement of a material fact or omit to state any material fact necessary in order to makethe statements therein, not misleading; in the light of the circumstances under which they weremade,(c) to the best of its knowledge at the time of issue of the Prospectus, the Bonds issue is fullycompliant with Regulation 18/2006 and the Issuer has undertaken all reasonable efforts to ensuresuch compliance. For clarity, NBR has not issued a confirming opinion on such compliance;(d) the Issuer is duly incorporated and validly existing under the laws of Romania. TheArticles of Association of the Issuer is in full force and effect, and the Issuer possesses allnecessary power and authority to enter into the Tranche A Bonds Subscription Agreement andthe other Bonds Documents, and to offer, issue and sell the Bonds, and to undertake theconversion thereof into share capital of the Issuer, and to perform its obligations under the termsthereof;(e) the execution, delivery and performance of the Tranche A Bond Subscription Agreementhave been duly authorized and approved in accordance with Romanian Law and the Articles ofAssociation of the Issuer, including by the relevant corporate bodies of the Issuer, includingthrough its EGMS held on 27 April 2012 (the “April 2012 EGMS Resolution”) and the EGMSheld on 30 October 2012 the “October 2012 EGMS Resolution”) and subsequently, on basis ofthe mandate given to it pursuant to the April 2012 EGMS Resolution and the October 2012EGMS Resolution, by the Board of Directors meeting held on 26 February 2013 [] (the “2013Board Resolution”) and no other corporate authorization is required except for another EGMSfor which the Issuer undertakes to call no later than January 2015, with a view to approve andreiterate that the Bonds will not be admitted to trading and other EGMS to be called anytime andif needed to extend the powers of the Board of Directors to increase the share capital and issue ofShares upon conversion if the mandate is limited in time, to cover the period until the finalmaturity of the Bonds. The Tranche A Bond Subscription Agreement has been duly executedand delivered by the Issuer and is the valid and binding agreement of the Issuer enforceable inaccordance with its terms;132

(f) the creation, issue, sale, and execution of the Tranche A Bonds have been duly authorizedand approved by the relevant corporate bodies of the Issuer according to applicable law, interalia pursuant to the April 2012 EGMS Resolution and the October 2012 EGMS Resolution, aswell as the Board of Directors Decision of February 26, 2013, and when issued and paid for,the Tranche A Bonds will constitute valid and legally binding obligations of the Issuer inaccordance with their terms; and the issue or sale of the Tranche A Bonds or the taking of anyother action contemplated therein does not now and will not result in a breach by the Issuer ofany terms of, or constitute a default under, or violation of, (i) the Articles of Association of theIssuer (ii) any agreement or undertaking of the Issuer that is material, or (iii) any applicable law;(g) without limitation to paragraph (f), the Tranche A Bonds are convertible into shares ofcommon stock of the Issuer in accordance with the Terms and Conditions of the Bonds and theshares of common stock issued upon conversion of Tranche A Bonds will be validly issued, fullypaid-in and free and clear of any pre-emptive rights or any similar rights arising under theArticles of Association of the Issuer or applicable law. The Board of Directors is authorized toincrease the capital of the Issuer upon the conversion of Bonds, and to issue the shares to theBondholders who have exercised the Conversion Option and the undertaking regarding EGMSResolutions (provided in Annex 2A of the Prospectus) shall be complied with in a timelymanner.(h) the Issuer has obtained all authorizations required or advisable pursuant to the Articles ofAssociation of the Issuer or applicable Romanian law in connection with the offering, issue andsale of the Tranche A Bonds;(i) the audited financial statements of the Issuer as of December 31, 2011 are true andcorrect and fairly present the financial condition of the Issuer as of the dates indicated and itsresults of operations and changes in financial position for the periods therein specified, and havebeen prepared in conformity with the Accounting Principles consistently applied, except asotherwise noted therein;(j) title to the Tranche A Bonds shall vest in the Lead Investor no later than the Issue Date,free and clear of any and all encumbrances; and(k) as of the signing date of the Tranche A Subscription Agreement, there has not been anymaterial adverse effect on the Issuer or any development involving a prospective materialadverse change, in the condition, financial or otherwise, of the Issuer from that set forth in theProspectus.(l) These representations shall be continuous and deemed repeated upon each and everyconversion of the Tranche A Bonds.133

ANNEX 3Audited consolidated financial statements and the Auditors’ reports for 2009, 2010, 2011Individual financial statements for Quarter 3 2012Please see the attached documents.134

ANNEX 4Conversion Notice FormTo:BANCA TRANSILVANIA S.A. CLUJ-NAPOCANOTIFICATIONI, the undersigned________________________________________ holder of (identificationdocuments)__________________________, in my capacity as holder of subordinated unsecuredconvertible Bonds of 2013, due in 2020, issued by Banca Transilvania S.A. (the “Bonds”), inprincipal amount of EUR […..], in accordance with the account statement issued by the CentralDepository,subject to the provisions laid down in the Prospectus for the Public Offering of Bonds,having regard to the publishing by the Bank of the notification regarding the Price-fixingDate/Liquidity Date,I hereby irrevocably and unconditionally express my intention to convert: [choose one of thefollowing options] (i) all [….] Bonds that I hold, with a principal amount of Euro […..]; or (ii) anumber of [……] Bonds with a principal amount of Euro [….] (min. Euro 500,000) from thetotal principal amount of Euro [……] of the Bonds that I hold, and at the same time request theissuance and transfer by the Bank of the Shares that I am entitled to through this conversion.I hereby declare that I acknowledge the fact that the number of Shares I am entitled to, based onthis conversion notice shall be determined by dividing the lei equivalent of the outstandingprincipal amount I have chosen to convert, based on an exchange rate equal to the SpotExchange Rate at the Price-fixing Date or the Liquidity Date, at the Conversion Price.The terms in capital letters, undefined in this notification shall have the meanings allocated tothem in the Prospectus for the Offering of 50,000,000 subordinated unsecured convertible Bondsof [2013].BondholderDateTRANSLATOR’S EXPLANATORY NOTE: The above translation of the prospectus isprovided as a free translation from Romanian which is the official and binding version.135