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banks for breaking transparency laws, as the first steps to a sector clean-up.
In addition to MAIB, the central bank took over Moldindconbank in April, and put both under the control of the Public Ownership Agency (APP), which will sell the stakes off to investors. Moldinconbank was at the heart of Moldova’s Laundromat system.
“As new owners of MAIB, the EBRD-led consortium will bring new discipline, new technologies and effective incentive structures to continue to make MAIB the leading bank in Moldova, better serving SMEs and supporting the economy more broadly,” Malige explained. “In
a nutshell, we want to ensure that the country’s largest lender is clean, healthy and works for the benefit of people, businesses and the economy – and not
a selected few.”
The EBRD already owns another bank in the country, but goes up a tier with the MAIB deal. In January, together with Romania’s Banca Transilvania, the EBRD bought another 27% in Victoriabank, the third largest bank in the country
and one of the few well respected local banks, taking its share to a controlling stake in what one EBRD banker called a watershed moment.
“This gradual and fundamental clean- up of the Moldovan banking sector, the entrance of robust and transparent shareholders, which abide by highest standards of corporate governance mean that the country’s lenders can no
longer be used for money laundering
or other illegal transactions. As money- laundering concerns grow, Moldova is a ray of light, proving that a turnaround is possible,” Malige said.
Once the MAIB deal goes through, the EBRD will have significant stakes in two out of the three biggest banks in the country and since the state took control of Moldindconbank that too could well be sold to new investors soon.
Exit strategies
For investors the potential exit is as important as finding a good business
to invest into, and there are plenty of options. The funds must have an eye
on the Bank of Georgia, which was
the leading bank in the similarly small country of Georgia, but managed to list on the London stock exchange where its valued soared.
“I’m not sure we can list MAIB in London, but the regional exchanges are attractive, especially the Warsaw Stock Exchange as one possible exit,” Malige told bne.
The other alternative is to sell to a strategic investor. Romania’s Banca Transilvania has already gone with the EBRD into Victoriabank and there are a bevy of other banks with business across the region from Austria and Hungary in particular. Moldova is not a big market but the experience of the Bank of Georgia has shown even small markets can make big profits for their investors.
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Selected headlines from past month:
· Serbia, Romania, Bulgaria and Greece plan joint bid to host 2030 World Cup
· Attitudes to religion and minorities in Eastern Europe remain largely unreformed
after 25 years of democracy
· Star performers: Azerbaijan and Turkey shoot up the Doing Business rankings
· US reportedly agrees outline waivers on Iranian oil embargo
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