Romanian Nextebank buys 55% of competitor Banca Carpatica
Romanian lender Nextebank has bought a majority stake in local competitor Banca Carpatica after a two-phase deal finalized on Friday, January 29.
Nextebank paid EUR 5.1 million to buy 20% of Carpatica’s shares from the existing majority shareholders and brought another EUR 22 million to the bank’s capital, reaching a 55% majority stake.
The deal has already been approved by Romania’s National Bank (BNR) and the Financial Supervisory Authority (ASF).
“Nextebank’s acquisition of the majority stake in Banca Carpatica marks a very important first step in the two lenders’ growth plans. We will also start a merger process between Banca Carpatica and Nextebank,” said Horia Manda, President of Nextebank’s Board of Directors.
Nextebank should increase its assets fourfold after this deal as Carpatica’s assets were triple compared to its own at the end of 2014. Together, the two banks should reach a market share of about 1.2%, similar to those of Credit Europe Bank, Intesa Sanpaolo, and state-owned Eximbank, based on December 2014 data.
In 2015, Banca Carpatica had losses of EUR 19 million, down from EUR 38 million in 2014. The bank’s assets were some EUR 690 million, at end-December 2015, down by 5% compared to December 2014. However, its net loan portfolio was only EUR 171 million, down by 26%. The bank’s solvency ratio was some 7%, under the minimum level required by the BNR.
Banca Carpatica has had big financial issues in the past two years due to the losses related to non-performing loans granted before the financial crisis and the majority shareholder’s justice problems.
Romanian investor Ilie Carabulea, Carpatica’s founder and main shareholder, has been involved in several corruption cases, one of them related to his insurance company Carpatica Asig. Romania’s National Bank (BNR) decided in early-2014 to block his voting rights at Banca Carpatica and asked the bank’s management to find an investor to take control.
Banca Carpatica has had talks with several investors in the past two years. The bank initially had merger talks with Nextebank, which were abandoned. Then, it almost reached an agreement with American fund JC Flowers, but the deal fell through at the end of last year, as the fund also wanted to take over Piraeus Bank, but failed.
Nextebank is controlled by the Emerging Europe Accession Fund (EEAF), a private equity fund backed by the EBRD, EIF, DEG, and BSTDB and managed by local private equity firm Axxess Capital Partners.
Andrei Chirileasa, andrei@romania-insider.com
