bne IntelliNews – Moldova’s largest bank MAIB plans overseas IPO
Moldova Agroindbank (MAIB), Moldova’s largest bank with around 30% of total banking system assets, aims to launch an IPO around 2023-24 in London, Amsterdam, Warsaw or Bucharest, according to the board member of administration Vasile Tofan quoted by Mold- Street.com.
Commenting on attempts to find a strategic investor, Tofan said that “unfortunately we have to understand that the reputation of the Moldovan banking system is still not very good”.
The bank is 41% controlled by the European Bank for Reconstruction and Development (EBRD) in partnership with two investment funds.
The bank is already listed on the Moldovan stock exchange, however, the local stock exchange is lacking in liquidity.
Fugitive businessman Veaceslav Plato, one of the bank’s former owners, warns the move would be risky as long as he still seeks to reclaim his shares in court.
Plato was stripped of his actions in 2016, as part of a program to make bank ownership more transparent after the $ 1 billion bank frauds in Moldova. No bidder has come forward for his shares, which are being offered for sale by the state, apparently due to the risk of legal complications.
Finally, in 2018, the EBRD and two investment funds, Horizon Capital of the United States and Invalda INVL of Lithuania, sealed the purchase contract via a London-based limited liability company with a capitalization of â¬ 1,000 ( HEIM Partners).
The three investors paid 450 million MDL (22.9 million euros) in October 2018 for a 41% stake in MAIB.
They will soon be in a good position to come out – and Plato has suggested that is what they are considering – and escape the risks of unfinished or new legal actions initiated by the former owners of the bank, including Plato.
Expert-Grup analyst Stanislas Madan said he also believes investors are considering an exit via the IPO.
However, given the expected improvement of the judicial system under the new pro-EU regime in Moldova, risks such as those mentioned by Plato are rather diminishing.
MAIB has not yet distributed dividends for fiscal years 2019 and 2020, due to the pandemic, but in the summer of 2021, it confirmed its payout ratio policy of 30 to 50%. Depending on the payout ratio, the three investors would cash between MDL 474 million and MDL 791 million for fiscal year 2020-21 plus the first seven months of 2021, i.e. between 22.3 and 37.1 million euros per compared to the MDL 450 million invested in 2018. For 2018, investors have already received â¬ 4.7 million, judging by the dividend per share of MDL213 announced by MAIB in April 2019.
MAIB’s return on equity (ROE) is between 10% and 15%, but board member Tofan said in an interview with Infotag.md in August that the target was 20%. He argues that the cost of capital in Moldova is around 15%.
âThis is the current level of banks in Romania,â he says.
In fact, the greatest ROE ratio of the last decade was achieved in 2018 before the recession, during the exuberant lending period, and it was 17%. In 2019, before the crisis, the ROE of the Romanian banking system was 14.6%.
âEven the Russian giant Sber has an ROE of around 16%. Tinkoff Bank (Russia), of which we were shareholders, 40%, and Kaspi Bank (Kazakhstan) 80%. Currently, MAIB earns less than the cost of capital for Moldova, which is around 15%, âVasile Tofan said.
|Oct-18||2018||2019||2020||Jul-21||total of which 2018||2019-2021|
|Price @ 41%||MDL mn||450.0|
|100% net profit||MDL mn||531.5||703.7||523.8||353.4||2 112.4||1,580.9|
|Net profit @ 41%||MDL mn||217.9||288.5||214.8||144.9||866.1||648.2|
|Dividends from investors at 50% distribution||MDL mn||90.8||351.9||261.9||176.7||881.3||790.5|
|Investor dividends @ 30% payout||MDL mn||90.8||211.1||157.1||106.0||565.1||474.3|
|Price @ 41%||millions of euros||22.9|
|100% net profit||millions of euros||27.2||36.5||24.8||16.6||105.2||77.9|
|Net profit @ 41%||millions of euros||11.2||15.0||10.2||6.8||43.1||32.0|
|Dividends from investors at 50% distribution||millions of euros||4.7||18.3||12.4||8.3||43.6||39.0|
|Investor dividends @ 30% payout||millions of euros||4.7||11.0||7.4||5.0||28.0||23.4|
|Source: BNM, IntelliNews BNE|