Romanian Banca Carpatica asks shareholders’ approval for merger with Nextebank

Romanian private bank Banca Carpatica, headquartered in Sibiu, convened its shareholders to approve the banks merger with competitor Nextebank, the bank announced on Monday, November 17, 2014. Banca Carpatica has already received a final binding merger offer from Nextebank. Carpatica will absorb Nextebank and probably that Nextebank’s shareholders will get new shares in Carpatica, which is a listed company. Carpatica’s shareholders will also be asked to delegate to the management board the authority to increase the bank’s capital with up to EUR 35 million, within a one-year period. The general shareholders meeting will take place on December 19. Banca Carpatica currently has a market capitalization of EUR 58 million. Banca Carpatica, which was founded by Romanian businessman Ilie Carabulea, has been trying to get a new investor or to set up a merger, in order to strengthen its financial position, which was affected by Carabulea’s legal problems. Ilie Carabulea, one of the richest Romanian businessmen, had his voting rights suspended by Romania’s National Bank (BNR), in February, after he was arrested in January for alleged bribery and influence peddling related to his insurance business, Carpatica Asig. He owned 45% of the bank’s shares and together with his associate, Corneliu Tanase, he controlled 55% of the bank. Tanase also had his voting rights suspended by BNR. The bank’s other shareholders, in March, decided to let the management look for investors to take over the bank and help it recover. In recent months Romanian media wrote that four investors are interested in taking over the bank. Carpatica’s total assets declined by 19% in the first nine months of this year, to EUR 745 million, as the bank sold an important part of its financial assets portfolio. The value of Carpatica’s performing loans portfolio declined by 2.8% compared to December 31, 2013, to EUR 270 million. The volume of deposits also declined by 2.9%, to EUR 619 million. The bank recorded EUR 4.9 million losses in the first nine months of this year due to higher provisions for non-performing loans (NPLs). Nextebank is the former MKB Romexterra Bank, which used to be part of Hungarian group MKB. In April 2014, the bank was taken over by Emerging Europe Accession Fund (EEAF), a private equity fund managed by Axxess Capital. Nextebank had EUR 194 million in assets and a net loan portfolio of some EUR 62 million, at the end of 2013. The bank had more than EUR 20 million in losses last year, as MKB removed the largest part of its non-performing loans portfolio and sold it separately to a Czech debt recovery firm.