02 octomber, 2018

A consortium of foreign investors, headed by the European Bank for Reconstruction and Development (EBRD), purchased 41.09% of shares of Moldova's largest bank MAIB. Apart from the EBRD, the consortium also includes two funds - Invalda INVL (Lithuania) and Horizon Capital (USA).

On behalf of the EBRD, the deal was signed by EBRD's Managing Director, Financial Institutions, Francis Malige. The director of the news agency Infotag, Alexandru Tanas, talked to Mr Francis Malige on the eve of the deal.

Infotag: Mr Malige, what does this deal mean for Moldova as a country?

For Moldova as a country I think it is very important. If you look at the banking sector a few years ago, you had no transparent shareholders in all the large banks of the country. Now the situation is very different. Victoriabank has a group of transparent, identified shareholders and MAIB will from now on also have a group of shareholders which are identified and ready to implement good corporate governance. That is very important because of the role that banks play in the economy. They lend to the private sector. So if you do not have transparent banks you have no idea who is lending money to whom and for what reason. So if you do not have transparent banks you do not have democratic economy.

Infotag: What does this deal mean for the National Bank of Moldova?

It is very important. It is a great success. I think now there is excellent cooperation between the National Bank, the Finance Ministry, the Stock Exchange Commission, the government, the parliament and the development partners of Moldova - the IMF, the World Bank and the EU. Without this cooperation, this would not have had happened. This is a great day for the entire banking sector and it is also a great day for the National Bank.

Infotag: What does this deal mean for the EBRD?

We are very happy. That is something that we have been trying to fix in the banking sector of Moldova for the last decades. I remember my first visit in Moldova in 2010. My first meeting was with the governor of the central bank and I explained to him they should know who the shareholders of the banks are, otherwise, the central bank will not be in control of the banking sector. That was eight years ago. Since then it has been a struggle and now we see great results.

Infotag: But what does this deal mean for MAIB?

It means that MAIB can look into the future without having to worry who is in control. The management of MAIB can work in a way when they have good, clean and transparent corporate governance. MAIB is the leading bank in the country but it does not mean it is perfect. It also needs to develop, to propose new products, to improve its own operations and so on. It is hard to do that if you do not really know who is taking decisions at the level of the supervisory board.

Infotag: Could you please tell what will be the first actions of the new shareholders after they enter the bank?

The consortium purchased 41.09%. The share of the EBRD in the consortium is 37.5%, which means around 15% of shares in MAIB. You see that the EBRD has no control of the bank. Other 25% belong to Horizon Capital and another 37.5% to Invalda INVL. We have decided among ourselves that Horizon Capital has the leading role. It is a respected private entity firm with experience of investment in the banking sector. It will be taking the lead for the consortium.

Infotag: Can we expect that new members of the bank's supervisory board will be elected by the end of 2018?

The intention is to have a functional supervisory board as soon as possible, with good candidates that will get an approval of the central bank also as soon as possible. But everyone has its own process so it could take longer.
Infotag: Can we assume that five out of the seven members of the board will represent the consortium?

F.M.: I don't think this represents the shareholding. I think we have to talk to other shareholders, see the candidates. Then there will be a shareholders' meeting and people will vote.

Infotag: This autumn MAIB shareholders will have to examine the issue of paying dividends for 2017. The issue has already been postponed for half a year. Will the EBRD-led consortium support the proposal to pay dividends for 2017?

We have to have a discussion with the management of the bank about this. A bank which is profitable should pay dividends to its shareholders but it also should keep money to finance its development.

Infotag: Given the fact that this stake is being sold for a rather low price, can we say that this deal is more political or financial?

For us this is an investment. Everyone can have its own opinion whether the price is high or low. What I can see is that MAIB's shares have been put for sale repeatedly and there was no buyer. We do not want to do a political deal. We do business. Banking is business not politics. We also see that when politics gets into banking it finishes bad.

Infotag: Now that the EBRD purchased the stake in MAIB, it will be present in three Moldovan banks: MAIB, Victoriabank, Mobiasbanca. Can you say when EBRD will start withdrawing from these banks?

Yes, of course. In the long-term, I think the EBRD should be out of all of the banks in Moldova. The question is what stage of development these banks have achieved. What we want to see is banks that have good governance, sufficient institutional strength so that the situation of the past few years cannot be repeated. I would expect that this will take from three to seven years to achieve this, but if it takes longer so it takes longer. We are patient investors.

Infotag: Apart from three foreign shareholders, MAIB also has some 3,000 small shareholders. What would you like to tell them?

I would say thank you for holding the shares and not despairing of MAIB when there were non-transparent shareholders. I would also say that we, as shareholders, are going to do our best to help MAIB to create value for its shareholders.

Infotag: Thank you for the interview.

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