Confirm cookie choices
Cookies are pieces of code used to track website usage and give audiences the best possible experience.
Use the buttons to confirm whether you agree with default cookie settings when using

EBRD seeks a larger stake in Moldova’s Victoriabank

By Olga Rosca

The European Bank for Reconstruction and Development (EBRD) is prepared to increase its stake in Victoriabank, Moldova’s third-largest lender, with the aim of restoring effective corporate governance at the bank and ensuring its continued sound financial performance. 


EBRD seeks a larger stake in Moldova's third-largest lender Victoriabank to restore effective corporate governance at the bank and ensure its continued sound financial performance.

More videos

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.  
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: “We 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.
“Transparency and governance problems in the Moldovan banking sector coupled with a weak judicial system have negative implications for investment and financial sector stability,” added Mr Russell.
“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.”
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.
Following a series of non-transparent transactions in bank shares, the EBRD – previously a major lender to the Moldovan banking system – has refrained from any new business with banks owned by non-transparent shareholders. The EBRD finance for the sector has decreased fourfold from over €40 million in 2010 to just over €10 million in 2014. Other international financial institutions – which together with the EBRD represent the most important source of long-term funding for the Moldovan banking system – also halted financing to financial institutions with non-transparent ownership.
GDPR Cookie Status