EBRD President Suma Chakrabarti has hailed the recent breakthrough in Moldova’s banking sector, on a visit to the capital, Chisinau, and called on the authorities to build on this momentum, according to a EBRD statement.

“We are pleased that the National Bank of Moldova is successfully tackling vulnerabilities in the banking sector,” President Chakrabarti said. “This has enabled the EBRD to encourage Banca Transilvania to become a majority shareholder in Victoriabank.”

“After financial scandals tarnished Moldova’s reputation, the arrival of a strong strategic foreign investor can now become a turning point and an opportunity to take decisive steps,” President Chakrabarti emphasised.

Following Banca Transilvania’s investment, the EBRD and the Romanian lender now jointly hold a controlling stake of 66.7 per cent in Victoriabank. Last week, in line with legal requirements, the partners offered to buy the remaining shares.

At the same time, President Chakrabarti urged the regulator to maintain close scrutiny and strict transparency rules. “Non-transparent shareholders still present in the ownership structure of the largest banks must be replaced with fit and proper investors,” he said.

The country’s two largest banks, Moldova Agroindbank and Moldinconbank, representing more than half of the country’s banking sector, are currently under the special management of the National Bank of Moldova.

The EBRD, together with the International Monetary Fund, the European Union (EU) and other key partners, will continue efforts aimed at enhancing the resilience of the banking sector, President Chakrabarti stressed. But the country’s commitment is key: “The authorities must create an enabling environment to attract the right kind of investors,” he said.

The EBRD will now be able to expand its lending programme for small and medium-sized enterprises and energy efficiency in Moldova as an increased number of lenders comply with standards of transparency and good governance. But the President warned: “The restructuring of the banking sector has to be completed.”

The visit took place as the Bank’s annual investment in Moldova hit an all-time record in 2017: the EBRD provided €130 million of financing to support the private sector and develop infrastructure.

The increase in financing came despite a low level of domestic and foreign investment, bottlenecks in implementing infrastructure projects, and remaining issues in the banking sector.

“The EBRD has proved time and time again its commitment to Moldova,” President Chakrabarti told Moldovan Prime Minister Pavel Filip, Economy and Infrastructure Minister Chiril Gaburici, and Speaker of Parliament Andrian Candu.

“As we expect the economy to grow 3.5 per cent in 2018, it is paramount to keep reforms on track.”

President Chakrabarti welcomed the authorities’ decision to rethink a set of business environment laws, the so-called “business package”, which could have led to the decriminalisation of offences in the financial sector. “Reforms achieved must not be undone,” he said.

The EBRD President also discussed with the authorities the urgent need to step up the implementation of key infrastructure projects. Delays in road building and railway modernisation hold back economic growth and affect the quality of life in the country.

The visit marked the appointment of senior banker Angela Sax as new head of the EBRD’s Chisinau office. Mrs Sax will take up her new post in April 2018.

The EBRD is the largest institutional investor in Moldova. Since the start of its operations there, the Bank has invested over €1.2 billion in almost 120 projects. In Moldova its work focuses on restructuring the banking sector, enhancing energy security, supporting private firms and promoting more efficient public utilities and better infrastructure.