Indian billionaire buys Romanian small-sized bank

Indian billionaire Sanjeev Gupta, who indirectly owns the biggest steel plant in Romania - the former ArcelorMittal Galati, has bought the Romanian Credit and Investment Bank (BRCI) from Romanian businessman Dorinel Umbrarescu, Profit.ro reported.

Gupta also wants to operate a capital increase, by converting the subordinated claims against the bank he took over from Umbrarescu as part of the transaction.

Sanjeev Gupta bought BRCI on his own name and owns 99.35% of the bank's capital.

Gupta took over the subordinated loans of RON 35 million (EUR 7.3 mln) extended to the bank by Dorinel Umbrarescu and his family, who founded the bank in 2015. The loans will be capitalised, which will result in the bank’s capital rising from RON 63 mln (EUR 13.5 mln) to just over RON 98 mln (EUR 20.8 mln). The bank's share capital was cut by RON 31.4 mln in 2017 and by RON 31.5 mln in 2018 to cover the losses.

Dorinel Umbrarescu, known as the owner of UMB Spedition and Tehnostrade motorway construction companies, bought ATE Bank in 2013 and in 2014 he changed his name to BRCI with the ambition to turn it into a universal bank. Instead, the bank has constantly posted losses and the balance sheet has decreased from one year to another. BRCI had assets of RON 120.3 mln at the end of 2018, of which the loans accounted for only RON 10 mln (just over EUR 2 mln), compared to total assets of RON 393 mln (RON 167 mln loans).

Gupta already controls Wyelands Bank, a British bank founded three years ago and focused on small and medium-sized businesses. Last summer, Gupta’s Liberty Steel Group completed the acquisition of several assets of the ArcelorMittal group, including Romania’s biggest integrated steel mill in Galati.