London-based European Bank for Reconstruction and Development (EBRD) has expressed serious concerns regarding the indictment issued by Moldova’s Anticorruption Prosecutor's Office against Victoriabank, which it controls in partnership with Banca Transilvania, Romania's largest lender by assets.
Established in 1989 in Chisinau, 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. In 2018, Banca Transilvania purchased a 39 per cent stake in Victoriabank. Together with the EBRD, the Romanian lender holds a controlling stake of 66.7 per cent in the Moldovan bank.
“It is with serious concern that the European Bank for Reconstruction and Development (EBRD) has learned about the recent court warrant authorising the Anticorruption Prosecutor's Office to seize assets of Victoriabank in connection with the investigation of fraudulent activities in the Moldovan banking sector in 2014”
the development bank said in a statement issued on Aug.12 , 2020 shortly after local media published a document saying that a Moldovan court had granted a request to seize around MDL1.9bn (€117mn) of Victoriabank’s assets.
In 2014, $1 billion disappeared from three Moldovan banks (Banca de Economii, Unibank and Banca Sociala). The total loss amounted to more than 25 per cent of Moldova's total banking assets or equivalent to 12 percent of the country's GDP.
Three other banks, Victoriabank, Moldova Agroindbank (MAIB) and Moldindconbank were later placed under special supervisory measures by the National Bank of Moldova (BNM). Although they were not directly involved in the 2014 banking scandal, the measures were deemed necessary to protect retail clients.
A consortium led by the EBRD has also since acquired a 41.09 per cent stake in MAIB for 451.533 million Moldovan lei (23.07 million euro)
The EBRD states 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”.
A press release dated Aug. 11, 2020 posted on Moldova's Office of the Prosecutor General website read:
“By applying the seizure, the prosecutors pursue the purpose of repairing the damage caused by committing money laundering offences in the interest of an organised criminal group and abuse of office, with their possible special confiscation, for the benefit of the state.”
EBRD said it 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 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. As the largest institutional investor in Moldova, the EBRD regards a strong and stable banking sector a prerequisite of financial stability and as one of the pillars of sustained economic development and growth”
Victoriabank has said that it is open to provide to authorities all the necessary details because it is also in the bank's interest for these things to be clarified definitively.
“Victoriabank is moving forward, on the road it started 30 years ago and with the new momentum we have, especially since 2018, thanks to the new international shareholders” Moldova's Jurnal citied Bogdan Plesuvescu Victoriabank President as saying.