EBRD and Banca Transilvania voice concern over Moldova’s indictment of Victoriabank

The European Bank for Reconstruction and Development (EBRD) and Romania’s Banca Transilvania, shareholders in Moldova’s Victoriabank, have said that they are “seriously concerned” by an indictment issued by Moldovan anti-corruption prosecutors in connection with fraudulent activities in the Moldovan banking sector in 2014, and the freezing of some of Victoriabank’s assets.


The EBRD and Banca Transilvania said that they will resort to all legal means to protect Victoriabank, according to a statement issued shortly after local media published a document saying that a Moldovan court had granted a request to seize around 118 million euros of Victoriabank’s assets.

Victoriabank is Moldova’s third-largest lender and has a 17 per cent market share with around 540,000 customers and almost 100 branches across the country. At the end of 2019, Victoriabank’s total assets amounted to 730 million euros, and accounted for 3.8 per cent of Banca Transilvania’s total book value.

“The EBRD as a shareholder in Victoriabank welcomes the bank’s cooperation with the Moldovan authorities in their investigation of activities which occurred before Banca Transilvania became a shareholder in January 2018 and the transparency of Victoriabank’s shareholding was restored,” the London-based EBRD said in a statement.

“The EBRD trusts that the investigation will respect clients and customers of Victoriabank as well as its current shareholders, and be carried out in accordance with due process and due consideration of potential consequences for the Moldovan banking system. Failure to do so risks destabilising the entire financial sector with grave consequences for Moldova’s economy.”

Banca Transilvania, Romania’s second-largest bank, purchased a 39 per cent stake in Victoriabank in 2018. It was the first time since 2007 that a foreign bank had entered the Moldovan retail market as an investor. The deal made Banca Transilvania the single largest largest shareholder in Victoriabank. Together with the EBRD, it holds a controlling stake of 66.7 per cent in the Moldovan bank.

Moldova’s banking crisis of 2014, when more than one billion US dollars disappeared from three commercial banks (Banca de Economii, Unibank and Banca Socială) led to the collapse of the three banks and created a hole amounting to more than 25 per cent of the country’s total banking assets, or around 12 per cent of GDP.

Three other banks, Victoriabank, Moldova Agroindbank (MAIB) and Moldindconbank were later placed under special supervisory measures by the country’s national bank. While the three were not directly involved in the 2014 scandal, the measures were deemed necessary to protect retail clients. Between them, MAIB, Victoriabank and Moldindconbank account for more than two-thirds of the Moldovan retail banking market.

A consortium led by the EBRD has also since bought a 41 per cent stake in MAIB. Along with the EBRD, the consortium includes Vilnius-based Invalda and Horizon Capital, which manages funds which provide financing to businesses in Ukraine and Moldova.

The EBRD claims that Victoriabank is now a strong financial institution, “managed according to high corporate governance standards and working to the benefit of the Moldovan people, businesses and the economy”.

Victoriabank has said that it is open to collaborating with authorities in the investigation. “We move forward with optimism, we have the support of our international investors, and will continue to provide a normal service to all our clients,” the bank said in statement.

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