The planned initial public offering (IPO) of Moldova’s largest bank Moldova Agroindbank (maib) remains its priority, but the timing is still unclear, the bank’s CEO Giorgi Shagidze told bne IntelliNews in an interview in Yerevan last week. 

maib had previously announced plans for an IPO on the Bucharest Stock Exchange, but it is currently on hold as changes need to be made to the law on the strictly regulated banking sector. When the offering goes ahead, maib will become the second Moldovan company after Purcari Winery to list on the bourse in neighbouring Romania. 

“The IPO remains our priority, but the timing is not yet determined. We need the change to the law in Moldova, which will make IPO feasible, so when this change happens we can disclose our plans,” says Shagidze, speaking on the sidelines of the European Bank for Reconstruction and Development (EBRD) annual meeting. 

“The good news is we have started to operate like a public company already,” he adds. 

Banking sector overhaul 

Shagidze took the helm of maib in 2021, after heading TBC Bank in Georgia for 10 years, during which time it became Georgia’s largest bank. TBC went on to launch an IPO on the London Stock Exchange (LSE) in 2014. 

At the time Shagidze took over at maib, the overhaul of Moldova’s banking sector was underway after the country was shocked by the revelation that around $1bn had been siphoned off from three (now defunct) local banks. 

“The problem was in 2015, it’s the past. [The banking sector] been cleaned up very well. Now we have a totally different banking sector. We should look to the future,” he says. 

The changes at maib were no less dramatic than those in the broader sector. In 2018, the European Bank for Reconstruction and Development (EBRD) and private equity firms AB Invalda INVL and Horizon Capital took a substantial minority stake in the bank, previously confiscated from “non-transparent shareholders” by the central bank.

After that, says Shagidze, “the transformation started”, when the bank was made “more digital, more modern, more agile”. The biggest achievement, according to its CEO, “is the culture of putting the customer at the centre of everything”. 

Meanwhile, maib rebranded and streamlined its branch network. It decreased the number of branches by 30%, while at the same time increasing the number of transactions by 30%.

The other change has been going digital. Today, according to Shagidze, 50% of maib’s loans and 60% of its deposit accounts are granted via mobile banking. The growth in mobile banking is around 50% each year. 

“The features, the user focus, the intuitiveness of the platform are something we are really proud of,” Shagidze tells bne IntelliNews, referencing in particular the introduction of a biometric service based on facial recognition technology. 

This contributed to maib being picked as the best digital bank 2023 in the Central and Eastern Europe (CEE) and Commonwealth of Independent States (CIS) region by EMEA Finance. 

Return to growth 

maib serves almost a third of the country’s population. As of end-2023, it had a market share of 34.3% of deposits and 37.4% of loans. Since Shagidze took over, the bank has increased its share of the retail market by 5 percentage points (pp) to 33.7%, and the SME share by 15 pp to 37.0%. 

The bank’s latest figures (for Q1 2024) show its net profit increased by 50% q/q and 2.3% y/y to MDL349mn (€18.1mn) in Q1. Return on equity (ROE) stood at 17.6% in 1Q 2024, down from 19.8% in 1Q23, but still above the average ROE in 2023, reflecting a falling net interest margin due to rapid declines in the monetary policy interest rate. 

When it comes to the Moldovan market, Shagidze is very positive about the growth prospects, as it emerges from several difficult years due to multiple crises caused by the pandemic, the war in neighbouring Ukraine and the poor 2022 harvest. 

The recovery has been gradual; the economy grew by 0.7% in 2023, while growth is set to accelerate in 2024, but key forecasters have lowered their projections for the year to around 2.5%. 

Still, Shagidze describes the start of this year as “quite promising”, and also points to strong macro fundamentals such as the country’s low public debt. On top of this, Moldova currently has what the banker describes as a “once in 100 year opportunity”, namely the chance to become a member of EU. The country was given candidate status along with Ukraine in 2022, and in December 2023, the European Council decided to open accession negotiations. 

Even ahead of accession, Moldova is already highly integrated with the EU. “Integration with the EU on the ground is happening every day,” Shagidze tells bne IntelliNews. Specifically, he points out that around 60% of Moldova’s exports are to the EU, which also accounts for 60% of imports, while one third of the Moldovan population has an EU passport. 

Honing in on the banking sector, Shagidze also believes the fundamentals are strong. “The Moldovan banking sector is very well capitalised, with strong liquidity, strong asset quality and low penetration of the banking product, creating a good opportunity for the banks,” he says. 

Asked whether maib is eyeing opportunities outside of Moldova, Shagidze says there are no specific plans at present, although he notes the upcoming international listing and does not rule out expansion beyond Moldova’s borders. 

“As we are evolving and Moldova is getting even closer to becoming part of the EU, of course we may have other additions,” he says. For now, however, the focus is on the Moldovan market, where maib plans to build on its current leading position.