Corrected: UPDATE 1-EBRD buys stake in Moldova's largest bank to boost transparency

Banca Transilvania

02/10/2018 11:07

(Removes references to three banks' involvement in graft
scandal)
    By Alexander Tanas
    CHISINAU, Oct 2 (Reuters) - A consortium led by the European
Bank for Reconstruction and Development on Tuesday bought a 41
percent stake in Moldova's largest bank, aiming to bring more
transparency to a financial system recovering from a $1 billion
fraud. 
    The EBRD and two private equity firms bought shares in
Moldova Agroindbank (MAIB), which controls 30 percent of the
market and whose shares had been frozen by regulators and put up
for auction to strategic investors. 
    The sale is a further step in meeting the requirements of
Moldova's international backers, including the International
Monetary Fund and the World Bank, to root out corrupt practices
and make the ownership of lenders more transparent.  
    "For Moldova this deal is a very important event. Three
years ago the banking sector was not transparent, but now it is
a completely different situation," Francis Malige, the EBRD's
Managing Director, Financial Institutions, told Reuters. 
    "And now the MAIB will also have transparent shareholders
ready to apply the right principles for its development."
    Along with the EBRD, the consortium is made up of
Vilnius-based Invalda and Horizon Capital, which manages funds
which provide financing to businesses in Ukraine and Moldova.
Together they paid the equivalent of 23 million euros. 
    Moldova plunged into economic and political crisis after the
disappearance of $1 billion from three lenders between
2012-2014, Banca de Economii, Banca Sociala and Unibank.
    Known locally as the "theft of the century", the scandal
triggered street protests, the International Monetary Fund and
the European Union froze aid, the leu currency plunged to record
lows and inflation climbed into double digits.
    With the EBRD's support, earlier this year Romanian lender
Banca Transilvania  ROTLV.BX  bought a minority stake - 39.2
percent - in Victoriabank, the country's third largest bank,
which like MAIB faced scrutiny for its ownership structure. 
    Another, Moldindconbank, has been under the central bank's
control since October 2016 and the authorities also hope to sell
63.89 percent of its shares to a foreign investor.
    Moldova Agroindbank's assets are worth 22 billion lei ($1.3
billion). Its shares have been sold at 1,059 lei per share
($62.7).  
    "First of all, we want to see proper management in these
banks," Malige said. "They will have to achieve such an
institutional strength to prevent the repetition of the
situation that has been in the banking system of Moldova in
recent years."    

 (Editing by Matthias Williams; editing by Louise Heavens)
 ((matthias.williams@thomsonreuters.com;))