Volksbank Romania has EUR 250 mln capital injection planned by year-end

Volksbank Romania is set to receive a capital injection worth EUR 250 million from its shareholders by year-end, as Austrian group Volksbank seeks to strengthen the subsidiary and restructure its loan book in preparation for its sale by the end of next year.

Following this move the share capital of Volksbank Romania will reach around EUR 576 million, according to Mediafax newswire.

Volksbank Romania currently has a share capital of EUR 326 million and is controlled through Austria-based investment vehicle VBI Beteiligungs. Volksbank Group holds a 51 percent stake in this VBI, while Germany’s DZ Bank AG / WGZ Bank AG and France’s BPCE have 24.5 percent each.

“Volksbank Romania plans to roll out in 2014 several measures regarding the restructuring of the loan book and the growth of the portfolio of deposits, which requires additional capital. The planned measures designed to improve the capitalization of Volksbank Romania in the second half of 2014 lead to the creation of provisions amounting to EUR 128 million at 30 June 2014, related to the groups’ participation in the capital increase,” said the lender in its first half report.

The bank has sold at the end of July a package of mortgage non-performing loans (NPLs) worth EUR 495 million to a consortium comprising Deutsche Bank, AnaCap Financial Partners, H.I.G Capital International Advisers and APS Holding. Following this move, the bank’s NPL rate fell from 22 percent to below 8 percent.

Volksbank Romania had to reimburse EUR 600 million of a financing line from the parent bank by June, down from EUR 800 million at the end of 2013.

The Austrian group has sold in the first semester its leasing operations in Romania and Poland to Polish group Getin Holding, which entered into Romania last year after it acquired Romanian International Bank. The bank deal should be concluded by the end of this year, pending approvals from authorities.

Volksbank Romania registered a loss of EUR 103.6 million last year, down 38.5 percent year-on-year, due to higher provisioning. Its revenues lost 8 percent to EUR 119.9 million, while the assets shrank from EUR 4.7 billion in 2012 to EUR 3 billion last year.

Ovidiu Posirca