"Axxess Capital" wants Nextebank to absorb Patria Credit

Investment manager "Axxess Capital" wants Nextebank, which it intends to acquire, to take over the activity of Patria Credit, a financial institution which it owns, bank sources told us. According to them, Nextebank, the former MKB Romexterra Bank, has notified the Territorial Labor Inspectorates and the County Labor Agencies on the plans to eliminate all the positions on the current organization chart, with the exception of a few, and to set up new ones, which would represent 40% of the ones that would be removed. The new positions would be held following a recruitment process, assisted by an outside consultant.

The reorganization is said to have been requested by "Axxess Capital", who wants the current employees of Patria Credit to be transferred to Nextebank, after it takes over the lender, according to the quoted sources. The representatives of "Axxess Capital" and those of Patria Credit could not be contacted, while the officials of Nextebank did not give us a response, by the time the newspaper went to print.

In 2009, Patria Credit requested a bank license, but the National Bank of Romania refused to grant it. The refusal of the Central Bank, which came one year after the application was submitted, was caused by the nature of the two investors in Patria Credit, Romanian American Enterprise Fund (RAEF) and Balkan Accession Fund (BAF), more specifically that they are investment funds, which by their own definition have a limited duration. Horia Manda, managing partner "Axxess Capital", was saying at the time, that in the long term, the possibility existed for a foreign bank becoming a shareholder of Patria Credit, in order to help the latter secure a banking license.

Meanwhile, the NBR seems to have changed its attitude on the presence of investment funds in the shareholder structure of local banks, as it seems to look more kindly on their presence in the shareholder structure of domestic banks, as it looks kindly upon the interest of the Brits of "AnaCap" to acquire a Romanian lender. After its bid for Banca Comercială Carpatica fell, due to the fact that the shareholders of the latter turned down the price they were offered, "AnaCap" turned to buying Marfin Bank România, according to information appearing in the press.

The interest of "Axxess" in Nextebank comes from the fact that the latter has a good balance sheet, compared to other lenders of similar sizes, the sources told us. "Nextebank has a very good liquidity, due to a solid base of customer deposits. The loan portfolio has also been < cleaned up >, and the situation of non-performing loans has improved significantly.

Patria Credit also has a very good loan portfolio, which would make the entity created through the merger of the two to look good", they said.

At the end of last year, Nextebank had 1.064 billion lei in assets, representing approximately 0.3% of the total assets of Romanian banks.

• Information about the interest of "Axxess Capital" in Nextebank has appeared in April

In April, in an exclusive piece of news, BURSA wrote that "Axxess Capital" may be interested in buying Nextebank. Last week, sources from the bank market told us that the investment fund reached an agreement with Hungarian group MKB Bank, the majority shareholder of Nextebank, concerning the acquisition of the lender. The representatives of the Hungarian bank told us at the time, that there was nothing new to announce, but that they would be ready to share the information concerning the process for the sale of the shares held in Nextebank, at the right time. On the other hand, the officials of "Axxess Capital" told us that they do not comment on information "obtained through various channels", as the company's policy is to directly inform the public when it reaches an agreement on a deal. People close to the situation have confirmed, however, that the investment fund verbally announced its acquisition intention, which is subject to the reorganization.

This would be the second attempt to sell Nextebank, after the deal with American company "PineBridge investments" fell through, apparently due to the fact that the NBR would not accept the bank being owned by a non-European entity. "PineBridge Investments" is an asset management company, owned by a private Asian investment group, registered in Hong Kong.

If "Axxess Capital" did acquire Nextebank, this would be its third investment in the Romanian banking sector. The funds under its management have, in the past, held stakes in Banca Românească, which has since then been sold to National Bank of Greece, and of "Banca Agricolă", which has since then become Raiffeisen Bank România. Other investments in the financial sector were those in Domenia Credit, acquired by Garanti Bank and renamed Garanti Credite Ipotecare (Garanti Mortgage loans), and Estima Finance, sold to GE Money.

Patria Credit is a non-financial banking institution which specializes in microlending. The company's line of business is the granting of business loans to microenterprises and small companies, individual entrepreneurs, agricultural producers and individuals. The volume of loans granted last year represents the equivalent of approximately 31 million Euros.

Patria Credit is financed by the European Bank for Reconstruction and Development (EBRD), the European Investment Fund (FEI), the European Fund for South-Eastern Europe (FEES), International Finance Corporation (IFC), the investment division of the World Bank, American agency Overseas Private Investment Corporation (OPIC), investment managers Developing World Markets (DWM) and credit cooperative OIKO Credit.

RAEF and BAF acquired Patria Credit in 2007, when it was called Capa Finance, following a deal (which also involved a share capital increase) of approximately 15 million Euros.