The European Bank for Reconstruction and Development (EBRD) is prepared to increase its stake in Victoriabank with the aim of restoring effective corporate governance at the bank and ensuring its continued sound financial performance, IPN reports.
While currently the owner of a 15.06 per cent-stake, the EBRD has applied for and received regulatory approval to acquire up to 50 per cent of the shares of Victoriabank. However, EBRD has not yet determined the exact amount of its proposed increased stake, which will depend on market developments.
According to the EBRD, while the Bank’s actions are taken in view of the suspension of Victoriabank’s Administration Council (Supervisory Board) by court orders which have created a situation where shareholders, including the EBRD, cannot exercise influence over Victoriabank’s corporate governance.
Henry Russell, EBRD Director for Moldova, Belarus, Ukraine and the Western Balkans in the Financial Institutions Group, said they are aiming for a significantly larger stake in Victoriabank which will enable us to restore corporate governance at this systemically important Moldovan bank and to preserve its independent, professional and commercially successful operations.
The EBRD invested in Victoriabank in 1995, alongside the bank’s founders, to support a locally-owned, commercially disciplined private bank with high standards of corporate governance and integrity. This goal was frustrated in 2006 when the control of Victoriabank’s Supervisory Board passed to non-transparent shareholders, unacceptable to the EBRD and to other key shareholders.
“We will continue to work closely with the Moldovan government and regulators to ensure that only transparent, reputable and sound investors can hold shares in Victoriabank and in the country’s banks in general. The banking sector should benefit the Moldovan economy, not the interests of opaque special interest groups,” said Henry Russell.
Last year the Moldovan government initiated steps to reform the business environment and promote good governance, including in the banking sector. Under a Memorandum of Understanding signed with the EBRD, the parties agreed to establish a single, unified, universal and fully transparent registry of shares of Moldovan banks. It will enable investors, creditors, the media and the general public to access information on banks’ beneficial ownership.
The regulations concerning the holding of a substantial shareholding in the bank’s capital provide that without the preliminary written consent of the National Bank of Moldova, none of the potential buyers can acquire a substantial holding in the bank’s registered capital or increase the holding substantially so that the proportion of the voting rights or the participation share in the registered capital reaches or exceeds the ceilings of 20%, 33% or 50%. Any potential buyer must ask for the written consent of the National Bank before transferring the money as payment for the shares or before performing the sale-purchase transaction or transmitting the shares and before performing any other transactions that will lead to the holding by this of a substantial share. The EBRD received the approvals of the National Bank of Moldova for purchasing the shares of Victoriabank.
