Major stakes in top two banks and three major insurers have been confiscated after illegal coordination by shareholders detected, but no buyers have come forward, leaving Moldova’s financial sector in limbo.
Majority stakes in three Moldovan insurance firms, including market leader Moldasig, are still for sale two years after the financial market regulator CNPF found undeclared groups of coordinated shareholders, Mold Street reported on April 18.
The situation resembles that on the banking market, where the country's largest two banks have no majority shareholders. Large stakes in Moldindconbank (MICB) and Agroindbank (MAIB) are for sale as well, after the central bank spotted undeclared groups of coordinated shareholders.
Moldova's banking and insurance markets were until recently controlled in a hidden manner by local oligarchs and they served as instruments for laundering Russian money. Tighter ownership transparency regulations resulted in a large number of shareholders, suspected of being intermediaries for local oligarchs, selling their stakes.
The three insurance firms reportedly belong to Veaceslav Platon, who is currently indicted for banking frauds. The target prices for the three insurers have been gradually cut down to as low as one-third of the initial asked price, though the buyer would need CNPF’s consent, though.
Three stakes amounting to nearly 80% in insurer Moldasig are for sale at a price of MDL63.2mn (€3mn), one-third of the price asked initially, Mold Street reported. Moldasig is the market leader of the Moldovan insurance market, with a market share of 14.3% in 2017.
The overall market expanded by 4.8% y/y to MDL1.5bn in 2017, out of which Moldasig contributed MDL206mn, according to xprimm.md. Moldovan insurance companies reported MDL67mn gross profit on aggregate basis in 2017 (down from MDL108mn in 2016). Moldasig managed to increase its gross profit to MDL20mn in 2017, up from MDL13mn in 2016, though.
The other two insurance firms for sale are Alliance Insurance Group (87% of its shares for MDL14.45mn) and Asito (83% of its shares for MDL3.8mn). Asito is the smallest of the Moldovan insurers and it sold most of its assets already. The gross premiums collected by Alliance Insurance Group plunged to MDL20.5mn (1.4% market share) from MDL139mn (10% market share) in 2016. Its gross profit decreased to MDL6.5mn in 2017 from MDL10.7mn in 2016. The company was warned by the CNPF in October 2017 in regard to its insufficient capitalisation and urged to increase its capital.
Earlier in the week Moldova’s government was reported to have instructed its Public Ownership Agency (APP) to take over major stakes in the country’s largest banks, Moldova-Agroindbank and Moldindconbank, that were previously confiscated by the central bank.
The APP is supposed to sell the stakes to investors under the law regulating the state’s intervention in systemic banks, endorsed by the parliament last December. The APP should put the stakes up for sale within seven days of taking them over, at a price no lower than the price paid by APP for the shares, Mold Street reported, quoting the provisions of the law.