Thank you for standing by. I'm Poppy, your conference call operator. Welcome, and thank you for joining the Banca Transilvania conference call to present and discuss the first half 2023 financial results conference call. Please note that the conference is being recorded. The presentation will be followed by a question and answer session. You may submit your written questions using the Ask a Question window. At this time, I would like to turn the conference over to Mr. Ömer Tetik, CEO, Mr. George Călinescu, Deputy CEO, CFO, Ms. Luminița Runcan, Deputy CEO, CRO, and Mr. Aurel Bernat, Executive Director, Financial Institutions and Investor Relations. Mr. Tetik, you may now proceed.
Good afternoon or good morning, depending on where you are participating from. We are happy to host you now in our building, actually. I don't know if you were already fed up with the video conferences and Zoom or Team meetings, but we wanted to use the technology in order to have a more interactive meeting. I'm here, as already mentioned, with together with my colleagues, with George Călinescu, Luminița Runcan, and Aurel Bernat, who recently took over the investor relations part as well. We would like to explain you our first six-month results, try to give you some light about what is next, how we see Romanian markets, Romanian financial markets for the next six months and going forward. And we would like...
I would like to start also for you to hear the sound of Aurel with some brief macroeconomic analysis, which Aurel will present to you.
Thank you very much, Ömer, first of all, for having me here, so it's also an honor and a pleasure. Thank you, everybody, for joining us. I will be presenting the macroeconomic landscape of our economy, starting with the Romanian economy, which outperformed the Central and Eastern European countries in the second quarter of this year. The good news is that we had an increase in our GDP of 1.1%. The second good thing is that Romania outperformed its peer group. If we take into account Poland, for instance, Czech Republic and Hungary, which had a contraction in their GDP. We can notice a very positive climate in constructions.
Here we have more than 11.3% year-over-year increase, and this evolution was based on new funds for the development of critical infrastructure, civil engineering having more than 30% increase year-over-year. Furthermore, we can see an increase in the retail sales of 3%, which obviously gave a positive climate across the labor market. On the other hand, we have the economic confidence indicator, which is also higher compared to other countries in the region. And just like for GDP, for instance, we had a better performance and economic confidence than Poland, the Czech Republic, and Hungary in short run. The following information will be about inflation and CDS for Romania.
From the inflation point of view, the consumer prices decelerated. We now have an 8.9% year-over-year increase in prices in July, but it's the minimum since February 2022. And still the same story regarding Romania, we have the lowest inflation from the surrounding countries. Poland, the Czech Republic and Hungary are over us. From the monetary policy point of view, the National Bank of Romania maintained the level of the policy rate at 7%.
Money market, both for three months and six months ROBOR, stood around 6.2% and 6.5%, which is a much lower level than before, compared to before, with more than 150 basis points lower on the three-month tenor and 1.3 percentage points for six months. According to Bloomberg, the five-year CDS in U.S. dollars is on a downward trend starting with November 2022. We are at around 160 points, which means that we are around the lower levels of the CDS regarding Romania.
Another good news is the ten-year bonds, which, in case of Romania, ended in July at 6.5, down with more than 160 basis points compared to the previous period in time. Concerning the loans and deposits, well, the deposits outperformed the loans. Since this information, you will also be seeing them further on in our presentation, I will be skipping the numbers and figures. But we will get back in the short run to them. And my last slide will be related to the return indicator in the banking sector and the non-performing loans ratio. We have an extremely positive climate across the banking sector in Romania at the beginning of this year.
It was well an evolution supported by the continuity of the post-pandemic recovery. The total assets of the banking sector grew. Also, from the financial result point of view, we had an increase of return on asset as well as return on equity among the largest figures ever achieved in the late years. Also from the capital adequacy ratio point of view, the entire sector remains at comfortable 21% and above, which means that all the minimum requirements are met. I will give the floor back to you, Ömer, and thank you.
Thank you very much. I mean, indeed, Romania is outperforming regional peers, and numbers are looking slightly better, although Romania, the country has its own challenges. Still, we see a very stable monetary policy, very predictable monetary policy. And on the political side, with all the debates going on, still, we see a good cooperation in the coalition government, but also good transparent interaction with the private sector. I would like to go ahead with the business performance of the bank. I will let George to present the numbers slightly.
Thank you very much, Ömer. BT, both at the individual level and at the group level, had a very good first half of year in 2023. First of all, at individual level, the performance of the bank is better than our peers and banking average in terms of asset increase, and also in terms of the profitability that we have reported for the first half of the year. If you look at our results that we published, total assets increased by almost 8% at the bank level.
This is driven primarily by the deposit from customers, which increased by 5%, and also by the funding that we have acquired to the issue of the bonds, through the MREL program in the first half of 2023. At the group level, on the other hand, we're reaching almost 9% increase in total assets, and, an increase in deposits of 6.4%, with loans, going up by 2.2%, at group level, and 2.6%, in the first half of the year at the bank level.
When we talk about profitability, net results during the first half of the year was higher than the same period of last year by almost 40% at the individual level, and at the group level by more than 51%. This is also due to the fact that we have full integrated Ţiriac Leasing in the group in the first half of 2023. Whereas in the first half of 2022, the results of Ţiriac Leasing were not reflected in the profitability. This increase in profit is driven primarily by the increase in revenues.
As you see in the reporting, we have very high double-digit numbers for net interest income increase, driven by the increase in the assets themselves, but also the increase in interest rates. As you can see in the reports, net interest margin increased to above 3% at the bank level, and 3.6% at the group level. Fees and commissions are increasing very nicely, as we have reported in the first quarter of the year. When we had the double-digit increase for fees and commissions, this increase is kept in the second quarter of the year, reaching above 13% level increase for the bank and above 10% increase for the group.
The increase is due primarily to the bank acquiring more clients. If you factor in the fact that in the first quarter of last year, we had those one-offs in terms of commissions at the start of the war in Ukraine, you see that the regular business has increased by more than 15%, actually, in the first half of the year, 2023. On the expense side, we also have an increase in expenses. This is due to inflation and to the adjustment of the prices for utilities, which is driving the increase. Of course, we are trying to make the expense side the most effective as possible.
As you can see here, in the slide, we managed to decrease the cost-income ratio of the bank to 47% at the bank level and to 45.5% at the group level in the first half of the year. The capital of the bank is strengthening. I will not get into details because later on, my colleague, Luminița, will have a presentation on both capital and NPL, which will go into much more details than on this slide.
Going into the trend analysis, which is on the next page, you see, as I mentioned, we have this 20% increase in net interest margin, net fees and commission 13%, whereas net trading income is below by of the same period of last year at the bank level by 21%. This is due primarily to evolution of FX, but what I would like to mention that FX related to clients has an increase of of more than 7% in the first half of the year. When you look at the net interest margin, you see, as I mentioned, we reached a level above 3.09%.
This is driven by the evolution of the interest rate, and it's in line with the expectations as we have discussed previously in our conference calls as well. I will stop here and leave the presentation going forward to Ömer.
So, by the way, we have, we have already uploaded the presentation in the, in our website. Now or later, if you would like to just for reference, look at the numbers, you can find it in our investor, relations, site, pages. The first, the ones participating to our previous call for the first quarter, you may recall that we were mentioning the challenges in retail lending due to higher interest rates, and also inflationary pressures. We have seen that in the second quarter, quite strongly, the trend had been reversed so that we managed to reach, how say, a positive loan growth in retail, in retail lending book. And, this was supported also, separately by the corporate lending growth.
In the first quarter of this year, we were mainly with lending to mid corporates and large corporates. In the second quarter, maybe I can tell that we went back to our roots. Retail lending, SME lending picked up, and this shows in our bottom line as well. On the other end, there had been a lot of talk in the markets internationally about deposits and liquidity. We are traditionally a very liquid loan-to-deposit ratio bank. We see also benefit of it in terms of our net fee and commission income, in terms of transactions growth, in terms of credit cards or debit cards growth.
So, we are one of the, let's say, strongest and most active payment institutions in Romania, as well, which helps us to grow our fee and commission income in double-digit percentages year by year, quarter by quarter, giving us a stable income flow. Deposit base of the bank is quite well hedged. I would say, is also, as it is the loan book, mainly in local currency and also mainly in retail deposits, of which over 99% are under the deposit guarantee scheme. The trust of the customers also encourage us to do more, to invest more, to lend more in Romania. Also, the decrease in the cost of risk or NPL ratios is being supported by the continuous saving of the customers.
Meanwhile, our deposits liquidity from the companies had been also growing. We were one of the few banks, or if not the first, big bank in Romania, which started raising interest rates on deposit products last year, on the savings products. The results we have seen with a very strong deposit and liquidity base in the last couple of quarters. Our retail banking loan growth, as I mentioned, has turned positive. We reached RON 29.3 billion loans in retail banking, and retail deposits are at RON 81 billion. Our active customers also grew almost 7% in the first six months of the year, going over 3.5 million, slightly over 3.6 million customers.
With 5.6 million cards, we are the most active issuer, besides the fact that we are being the most active acquirer in cards business and payments business in Romania. In corporates banking or companies banking, if I may say so, SME lending started picking up in the second quarter. Also, thanks to the government support programs, SME Invest, IMM Invest, as you know. But also we see on the manufacturing energy in the service sector, demand has been strong, and our loan book has grown in the first six months of this year, 5% in the company segment, with 3.4% growth in the deposit base.
I would like to leave Luminița to speak a bit more about the risk side, as we are discussing a lot about capital ratios, MREL instruments, EMTN programs. I will let her to give us some insights.
Thank you. Thank you, Ömer. The bank continues to deploy a robust risk strategy designed in view of supporting the ambitions of BT in the long run. The risk strategy is built upon a very good knowledge of the market in which we are acting, and also takes into account the specificity of the credit institution. From the broad range of risk that we are currently managing, we want to draw your attention today on only three of them, which we consider being relevant for this time: credit risk, capital, and also liquidity risk.
When it comes to the credit risk management in the bank, I wanted to emphasize the fact that all the figures you are going to see are based upon an underwriting policy, which has at its base very simple but strong principles, dispersion being one of it. We have tried to have a very good dispersion between business line, products, and also geographical areas, and more than that, we do not want to have high concentrations in terms of values. After saying that, I want you to see the cost of risk these days. Cost of risk these days benefited from very good recoveries in the second quarter of this year, and this complements the underwriting principle I have already mentioned.
This brings us to a negative cost of risk of -0.005%. If we have a look on the right side of this slide, we can make some comments related to the provisioning of the bank. You see that, June 2023 compared to 2021, the provisioning of the bank increased by 15%. But the provisioning of the bank increased in a smaller pace than the loan growth of the bank. What is to be noticed is the fact that the provision related to Stage One increased 42% in the same reference interval, June 2023 compared to 2021, and this is a result of the increased loan book of the bank in this period.
Further on, on the following slide, we are sharing with you a couple of figures related to NPLs, and here, please notice the decrease of NPL to 2.36% in June 2023, which is a figure better than the local market average, and this reflects the constant prudent approach that the bank has towards this aspect. In the meantime, the coverage of this provision remains flat. When it comes to PAR 90 , the figures are presenting on the right side of the slide. We are mirroring the tendency of NPL, and this is being influenced by good recoveries and also by market trends in terms of lending.
The bank also enjoys comfortable solvency levels, and here my comments would be that the bank benefits from a strong and stable capital base, mainly because of profit capitalization, that is an instrument the bank uses over the time. In the last quarter, the bank also benefited from a Tier 2 issuance instrument, which we have been announced to the market, and the details are to be presented further, further on. The surplus of capital we have above the thresholds asked by the regulator leaves the bank a good flexibility in terms of adapting its strategy to the potential negative market movements, or is going to support the ambitious plan of the bank further on.
When it comes to liquidity, it's no surprise for the market that the bank encounters very high liquidity level. Loan-to-deposit ratio stands at 56.6%, immediate liquidity around 49%. LCR and NSFR are recording levels which are well above the regulatory limits. This is showing also the trust that the clients has in Banca Transilvania and also reflects the high quality assets that we have under our management, and more than that, is to be mentioned that this pool of assets are managed in a very equilibrated way. On the right side of this slide, we are presenting to you a summary of the way in which the bank fulfilled the EUR 1 billion MTN program, which has been approved by the shareholder in October 2022.
We have done our debut on the bond market in April 2023, with a EUR 500 million issuance, which was completed by two retaps, one of it in June of EUR 100 million, and another one in August of EUR 190 million euros. On the top of this issuance, we have issued, as I previously mentioned, EUR 200 million Tier 2 instrument with IFC and AIIB as being our partners in this issuance. All of these issuance are listed on the stock exchange, so they are tradable instruments. And when it comes to the Tier 2 instrument, is to be mentioned that these funds are going to be deployed in green mortgages. That would be, I think, in a nutshell, what I wanted to draw your attention upon. Thank you.
Indeed, I mean, it was our debut this year in the international markets with our bond programs. We are both proud and happy that we managed to execute the program in a short period of time. Also managed to establish an improved yield curve. Now, our bonds are being traded 175-180 basis points lower than the initial levels we launched, despite the fact that in Europe we have seen both reference rates and market rates increasing. This gives us courage also for further programs. Some of you might have seen, we have already convoked a general shareholders' meeting asking the approval of shareholders for a new program, which we are willing to, I'll say, use, if approved by the shareholders.
This limit we'll be using in the next year or two, in order to meet MREL criteria, in order to establish a stronger name, in order to give more instruments issued by BT to the market participants. Coming back to sustainability, which is a very hot topic, everybody's discussing about it and trying to present their numbers. I would like to thank Diana and our team for putting in good shape what we have done so far. Because actually, we had been very comfortable mentioning that ESG sustainability was in the DNA of BT. We are... Before we heard the definition of social banking, we were doing social banking with our vast network and going to, let's say, rural areas, remaining in the rural areas of Romania.
But our better communication and perhaps interaction with the stakeholders helped us to obtain a 15.1 low ESG risk rating from Sustainalytics. Our sustainability report for 2022 is already in our website. You can also, if you download the presentation through the link, you can approach it. And we started also learning; we are, we are also doing kind of learning by doing. In 2022, we have started estimating our carbon footprint, giving stronger targets internally and externally. We started investing more in cybersecurity management and data protection.
We are further implementing new initiatives in order to improve our positioning, in order to improve our position as a benchmark in Romania because as a listed bank, as a listed largest bank and one of the most traded shares in Romania, in Romanian Stock Exchange. We are also a benchmark for other market participants or other institutions, not only for banks. However, we are happy that we are ranked 106th among 1,000 banks globally, and we are in top 7% tier of regional banks in terms of sustainability. If we look at the numbers, I mean, besides the report and let's say terminology behind, we are also quite active in green finance.
In the last three years, we have reached over RON 1.6 billion green loans granted, including also companies. One out of five mortgages in BT granted had been a green mortgage, and this we see developing, improving further. One out of four leasing contracted through BT Leasing, the larger BT Leasing, has been for electric or hybrid vehicles. Around 7% of the retail loan portfolio is now represented by green loans. On the digital, it's not actually something that we do maybe much different from the market, but our initiatives are very much customized for the needs of local customers.
local segmentation of the customers, and we are proud that this year we have launched, very recently actually, we have launched BT Go. This is, our mobile app, for the companies, starting from micro and, SME companies. There are already 1,200 customers who did, payments of over RON 15 million and EUR 1.5 million. This is, not a, just a banking app, but it's also kind of a mobile or digital assistant, because you can issue, invoices, you can upload documents, you can make peer-to-peer transfers. There will be also, kind of finance management, part of it.
It will be developed together with the customers, as we did with BT Pay now, which reached over 3 million unique cards and 3.5 million users. 43% growth we have seen in phone payments, and 70% growth in volumes transferred through BT Pay. We are also adding new features. One of the new additions is BT Kiddo, our new card and new wallet dedicated for the kids, for the children of our customers between 14 to 18 years old, and a simpler application in order to start their financial education for 10 to 14 years old. We have also launched a virtual card launched for the largest festival in Romania, Untold Festival.
It had been actually a remarkable success, thanks to the support of also our partners, growing over 20,000 cards in just a few days. When we look at the BT Financial Group, actually, we are happy to see that this semester, all our subsidiaries had been seeing robust growth and also positive contribution to the bottom line of the group, as you have seen in the consolidated figures presented by George. And also we see that we are becoming more known also in terms of pension funds, in terms of micro-lending. We are joining the good successful strong story of BT Leasing, BT Direct, BT Capital Partners, BT Asset Management. And we have also this very ambitious project.
Soon we will be announcing the new brand of Idea Bank, our first digital bank. We will be launching the first viable product, the first set of mobile app either towards the end of the year or early next year, where we want. We have ambitious plans, and we want to be the first, how to say, local neobank of Romania. I wouldn't like to bore you with numbers that you have already through our press release or through our presentations. Again, if you have further questions, if you couldn't post now in online, we will- you can always come back, but I would like to allocate some time for Q&A. You had been posting questions already online.
We will try to take them one by one and answer. In case the time limit will not, the time will not help us, we will try to come back to you on your questions. Thank you very much.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. You may submit your written questions using the Ask a Question window in the webcast. One moment for the first question, please. The first question is from BTAM, and I quote: "We have seen intense activity in terms of bond issuances in international markets. A sizable issuance followed with two supplementation. Has the full EMTN Program been utilized in line with MREL targets? What are your plans in the future, considering that the issued bonds are squeezing your net interest margin? Will you be tapping the markets in the second part of the year in 2024, or what we should expect?
I mean, MREL targets had been also quite dynamic, and as a systemic bank, we are being imposed upon some extra buffers. On the other end, as you have rightfully mentioned, it was a program approved last year by the shareholders, which we executed this year, because at the end of last year, we didn't see favorable conditions in the market. But this year, when we found a window of opportunity, we executed partial transactions. We have seen great demand. The new approval is not for this year; it is for the next period to come. We might be tapping the markets.
Once we have the flexibility from the shareholders, we would like to be able to tap the markets when we see lower cost, higher liquidity, maybe less competition in terms of getting liquidity from the markets. That's why we are asking for a longer-term approval at a slightly higher amount. Next year, most probably, we will need to tap the markets again, but these numbers are not that sizable anymore. What I would like to mention is that they also depend on the growth of our risk-weighted assets. Depends on several other variables. There is also a new banking package being discussed at the European level. It might bring some positive impact to our indicators, which will decrease our need for new issuances.
That's why, it's very difficult to make a very straightforward, very, stable plan. But on the other hand, once we will have the, the approval of the shareholders, hopefully, we will be able to, come to the markets whenever we deem, oppor- how to say, relevant or opportunity. Thank you.
The next question is from Miguel Dias with Wood & Co, and I quote: "Thank you for the presentation, and congratulations on the results. Could you comment on the taxes related to fiscal uncertainties and the turn of RON 100 million? Should we expect similar bookings in the next two or three quarters? In case of favorable decision from the ongoing court dispute regarding Volksbank acquisition, would this be reversed? And how confident are you of a positive outcome? Thank you.
For the question, I will be answering this question. We have updated the financials with the latest information with respect to the evolution of the dispute with the fiscal authorities, with respect to the bargaining gain from the Volksbank transaction. This dispute has several things happening this year, and in order to minimize the potential negative effect, which is considered by our legal consultants to be small but still present, the bank decided to actually pay the RON 264 million to the tax authorities in order to limit the level of the potential penalties in this low probability event of us losing at the final stage the dispute to the tax authorities.
Having paid that amount, due to the uncertainty related to the final outcome, which even in a small probability could be negative for us, we have decided to adopt a prudent approach and to book a level of supplementary tax of RON 100 million, representing this uncertainty in terms of taxation for the bank for the first half of the year of 2023. Of course, should our struggles with proving our point in court with the Minister of Finance be successful, we will be reversing this uncertain tax amount from the financials when we have the ultimate final result.
However, this is not expected to be happening very soon, as, you know very well, that legal challenges in court take a long time, and this is something that we estimate it will take at least 2-3 years until it is finalized from the legal point of view.
The next question comes from Girish Patil with NNIP GSAM, and I quote: "Congratulations to Team BT on the strong results. Given the increased cost of funding, how do you see the SME segment resilience going forward? Where do you expect to see stage two ratio in the coming quarters?
Thank you very much. Thank you very much, Girish. Indeed, 10,000 colleagues have been working hard for these results, but also, it's a story that had been, we had been developing. Also, I skipped answering part of the previous question. Sorry for that. How to say? The high cost of borrowing through the MREL issuances, how we are managing, it's actually kind of making part of our total liquidity portfolio and being, how to say, embedded in our liquidity position. So, while we have zero interest current accounts, quite a sizable amount from customers, be it retail or corporates, this is also adding up. But on the other hand, this, what I can tell is that we don't expect a big impact on the...
significant impact on the bottom line. These are all being budgeted for, and somehow part of the issuances we have managed at slightly better yields than we had been budgeting. On the other hand, this is indeed a high cost that we cannot argue with or fight with. This is decided by the supervisory authorities, internationally and locally... and the market is pricing it according to the risk appetite and market events. Coming back to which, I mean, it's, I'll say SME lending has picked up, as we mentioned, and the trend, as we see, will be strong going ahead. I mean, we have in terms of the... Definitely, we are not trying to reflect all the cost increases just because of one issuance to the customers.
We don't want to also put extra pressure on their cash flows or financial position just because we are, how say, we have one bond issuance at a higher cost. But our SME portfolio's performance had been so far quite strong, as you have also mentioned, within the international limits, even for an emerging market country, for, how say, a very, how say, growing, developing economy, quite strong. We don't expect any big change in our cost of risk, although we are not expecting, or at least we are not willing to budget and prepare ourselves for, how say, a, how, a positive cost of risk or strong changes.
I think we are, for stage two, we are very close to the international benchmarks as well. And so far, the incremental changes, plus or minus in the with cost of risk or stage two, can be well managed, blended within our whole business business model. Thank you.
The next question comes from Simon Nellis with Citibank, and I quote, "Are you expecting to be able to pay a dividend out of 2022 earnings?
As we have indicated in the convocation of the general shareholders meeting that was posted on our website last week, we indeed expect to be able to pay a dividend out of the 2022 results, which is a little bit in excess of RON 900 million. And you have the details in the convocation of the shareholders meeting that was posted last week on our website. Of course, it's pending shareholders' assembly decision.
Yep. I wanted to underline that it's up to shareholders' approval, amount slightly above RON 900 million.
The next question is from Hai Thanh Le Phuong Thank you, Hai. We are indeed again our first six-month results show lower than budgeted, lower than our guidance, cost of risk. Macroeconomic situation of Romania indeed also stays better than regional peers, but it is not how say still, we cannot say that everything is perfect. We have seen also a lot of government-supported programs kicking in in the last couple of years. We want to see how the customers are behaving. We are positive on the fact that the high saving ratio of individuals and also companies high liquidity position is helping them both to invest, but also to pay their loans to financial institutions.
But we wouldn't like to comment now on the end of year before we understand where Romanian government, with the fiscal reforms, will end up, where market participants going out of the programs how or if they will change their payment behaviors, and how fast we will continue channeling the recovery and resilience funds to the economy. That- it is also very important to see the end of how say, harvest season to see how factor in now a very high positive impact as well. And with regard to tax, I will-
I think I answered in the answer to the previous question. Of course, the tax uncertainty is related to the Volksbank gain. And, if additional details are needed, please drop us a line. We will provide them.
... The next question comes from James Bannan with Coeli, and I quote: "Congratulations on the fantastic results. How does the fall in sovereign yields impact NIMs, and how do you see NIMs developing over the next 12 months?
Indeed, the decrease in the sovereign yield had a positive impact, especially on our, the revaluation of the available-for-sale portfolios. That's our capital position. But on the other hand, the increase of the rates had been quite fast. The decrease had been slower, and we see it slowing down. This is our expectation, more or less, because we had been, as I mentioned during the presentation, the first large bank who increased the deposit rates to ensure liquidity position. We have seen the negative impact, but now, when you look back at the presentation, presented numbers presented by George as well, our net interest margin is over 3%, 300 basis points. We don't expect a big spike.
We think that, in the months to come, in the quarters to come, our net interest margin will be more or less around here.
We have a follow-up question from Girish Patil, and I quote: "Also, could you please let us know if you plan to obtain a second credit rating from either Moody's or S&P? Thanks.
Yes, Girish, we are planning to do so, but we had been quite active from M&As to different changes that we did in the operating model of the bank, in the technology investments, and so on. This is in our plans and requested by the investors, institutional investors, quite often. But in the very short time, very near term, we don't have, we will not have news for you.
We have a follow-up question from Hai Thanh Le Phuong , and I quote: "Just a follow-up question. One of your peers put their Romanian unit, and Moldovan operation up for sale. Are you interested in them? Would you consider expansion in Moldova, too?
As you know, we have quite a successful operation, profitable operation in Moldova, in joint venture in partnership together with EBRD. We hold over 70% of Victoriabank. We are very happy with the results. With all the challenges, the economy, the Moldovan economy has, we are very happy with the results produced by our colleagues, by the team there. And we recently announced a small acquisition there, purchasing the subsidiary of Erste Group, BCR Chișinău. For the moment, we are focused on that. We are not part of any official process. We might be interested, but our first focus is about obtaining necessary approvals and starting at least a successful project of integration in Moldova.
We will see if we can replicate our experience and track record also in Moldova. Only after that, our appetite will grow. Other than that, indeed, it's a small economy. Banking sector is very small, so economies of scale will matter a lot, but we are not also willing to grab a big market share very quickly in Moldova.
We have a follow-up question from Simon Nellis, and I quote: "Can you please explain the higher effective tax rate in Q2 2023 versus earlier quarters?
The higher effective tax rate is due to the fact that we have booked this uncertain tax of RON 100 million on the tax line in the P&L. So this is why you see an effective tax rate, which is higher than we reported in the previous half of the year.
Ladies and gentlemen, in the interest of time, please be informed that the conference call is coming to an end. For any questions that might have not been answered, please contact the BT investor relations team. I will now turn the conference over to management for any closing comments. Thank you.
Thank you very much for joining us. We are also a bit out of our comfort zone, maybe, from teleconference switching to video conference. Please do not hesitate if you have observations or recommendations, send us. There might be some other questions we didn't manage to answer. Also, please continue using our investor relations web address or our colleagues' email addresses to address those questions so that we will try to offer more clarity on the questions. On the other hand, view, I would like to thank on behalf of the team also for your trust and for your support, because BT's success story also is partly owed to you. We are learning a lot from your questions, from your guidance as well.
On the other hand, even with the pandemics, war, inflationary period, and interest rate increases, it seems that the measures that we have taken, the steps that we have taken, proved to be right. This gives, this is also coming from the fact that Romania is our geography. We think comfortably that we know Romanian economy, and also we can act quite fast, flexibly to the challenges that we face here. Hopefully, for the third, third quarter results, when we meet, we will be able to give you further good news and continuation of our story. Until then, I wish you all the best on behalf of the team here and all Banca Transilvania employees, thank you very much.
Ladies and gentlemen, following the conference call, we would like to announce you that the investor relations team in Banca Transilvania will send you a short survey about the new format of the conference call. Thank you for your input. The conference is now concluded, and you may disconnect. Thank you for calling, and have a good afternoon.