Business Opportunities in Moldova Banking sector Business opportunities

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1 Business Opportunities in Moldova Banking sector Business opportunities May 15th, 2015 Ridha Tekaia, president of CB MOBIASBANCĂ Groupe Société Générale S.A. and Foreign Investors Association

2 Financial System Structure, Moldova P.2

3 Banking sector and Investment Climate perception M E D I A I S S U E S POOR JUSTICE SYSTEM CORRUPTION GEOPOLITICAL TENSIONS M A C R O 2015 GDP -1% in 2015 Inflation +7.4% in 2015 Prices Foreign Direct Investments Remittances Import/Export

4 Banking system evolution, Well managed banking sector is growing ~ 10% ROE Good banking sector reflects a dynamic in Real Economy! GDP growth expectations: Moldova -1%(IMF); - 2% (WB) Ukraine -5,5% (IMF); - 7,5 (WB) Export CIS 20%/Total when export to EU +6.7% in Q1/2015 Russia Romania -3,5% (IMF); - 5,0 (EBRD) +2,7% (IMF) Le financement de l activité commerciale et des investissements 12/02/2013 P.4

5 Moldova: Investment opportunities 2014 Foreign Trade ($ mln) A platform for access to both EU and CIS area CIS CIS (Commonwealth of Independent States) 736 ( 20% vs. 2013) 1449 ( 13% vs. 2013) EU (European Union) 1246 ( 10% vs. 2013) 2568 ( 4% vs. 2013) Moldova Imports: gas, food products Exports: wine, fruits and vegetables, cereals Imports: oil products, energy Exports: equipment, electrical devices, cables, textiles, furniture, fruits and vegetables Exports Imports Source: National Bureau of Statistics P.5

6 Moldova: Investment opportunities Key sectors of the economy Agriculture and food industry: An open and diversified economy Trade; 16% Added-value (GDP structure) Agriculture; 15% Manufacturing industry; 14% Construction and Infrastructure: Trade: Hotels and restaurants; 1% Energy; 2% Other; 7% Construction; 4% Health and social work; 5% Financial intermediation; 6% Education; 7% Real estate; 11% Transport and communication s; 12% Telecommunications and IT: Industry: Gas, energy: Widespread sectors of activity in process of consolidation Textiles, leather and footwear: Public sector: Source: National Bureau of Statistics P.6

7 Foreign Investors Association (FIA) About FIA Association of the leading foreign investors in Moldova Founded in 2003 Members- multinational companies AIM To support and improve investment climate and business environment, providing advocacy and representation services for its members

8 Moldova: Investment opportunities Reasons to invest Cheap labor force: Average salary: 224 EUR (China 187 EUR); Social contributions: 26.5% in Moldova (including 6% which are compensated by the Government in the rural sector); 27.75% in Romania, 32-37% in China; Skilled and multilingual workforce; Professional formation to improve, negative migration flows Favorable tax system Income tax: 12%; 50% discount on income taxes, 0% VAT in the Free Economic Zones; Access to the EU and CIS markets; Autonomous Trade Preferences (ATP) for commercial exchanges with the EU; bilateral free exchange agreements with the CIS countries Income tax was 0% until 2012; complex mechanism of recovery of VAT Improving business environment: Strong commitment for the European Integration (funding programs of IFIs); Regular reforms (justice, financial sector, health, education, etc.). No visas for EU and CIS citizens; Access to the property; Central geographical area: An exchange bridge between two zones (EU million people / CIS million people); Maritime access (Danube Delta - Port Giurgiulesti); Renovation program for roads and railways (IFI funding) Still heavy administration, intellectual property protection to improve Road and rail infrastructure still failing, high cost of utilities P.8

9 MOBIASBANCA GROUPE SOCIÉTÉ GÉNÉRALE Shareholders International shareholders: Société Générale 67.85%; BRD Groupe Société Générale 20%; European Bank for Reconstruction and Development 8.84%; Minor shareholders 3.31%. Established in 1990; 6 years of integration to Groupe Société Générale; Internal standards corresponding to International Standards (IFRS, Basel II and Basel III - ongoing); Strong internal synergies inside the Groupe Société Générale (Romania/Russia); Close cooperation with IFI s (EBRD, IFC, EIB) ISO certification in Trade Finance P.9

10 MOBIASBANCA GROUPE SOCIÉTÉ GÉNÉRALE Full range of products and services CASH MANAGEMENT EXCHANGE TRANSACTIONS FX SPOT, FX FORWARD, direct access to the dealing room MOBIASBANCA DOCUMENTARY TRANSACTIONS Letters of credit, bank guarantees, collection / processing of documents (import and export), transferable letters of credit and back-to-back, etc.. FINANCING Trade Finance: - financing of export-import transactions (LCs, international guaranties, financing of pre-export and post-import transactions); - discounting of letters of credit; Financing of working capital: - revolving lines of credit, financing of permanent working capital; - factoring (in progress); Specialized financing of investments: - traditional loans; - leasing, forfeiting (Moldtelecom forfeting deal); - cross-border financing (Transoil Club Deal USD 200 mln); Brokerage services: T-bonds, corporate bonds (1000 values listed / Stock exchange, quite reduced liquidity). P.10

11 Building together team spirit Our values Ridha Tekaïa Président BC "Mobiasbanca - Groupe Société Générale" S.A. Tel: ridha.tekaia@mobiasbanca.md P.11