The European Bank for Reconstruction and Development (EBRD) and Raiffeisen International Bank-Holding AG, a member of the RZB Group headed by Raiffeisen Zentralbank Osterreich AG (RZB), are teaming up to help strengthen Raiffeisen subsidiary banks in Ukraine, Romania and Russia and address the impact of the international financial crisis on the real economies of these three countries.
The EBRD's Board of Directors approved a ˆ150 million financing package for three subsidiaries of Raiffeisen International, complementing the group's own continued provision of capital and funding of its banks in Central and Eastern Europe (CEE).
Under the package, subordinated loans attributable to Tier-2 capital will be provided as follows: ˆ100 million equivalent to Raiffeisen Bank Aval in Ukraine, ˆ25 million to Raiffeisen Bank in Romania, and ˆ25 million equivalent to Raiffeisenbank in Russia. The loans to the Ukrainian and Russian subsidiaries will be supplied in US-dollars.
Through this project the EBRD is supporting an important international group with a strong commitment to the region. The aim of the subordinated credits is to strengthen the capitalisation of Raiffeisen International’s network banks in order to support their lending to enterprises.
«This transaction is a continuation of our successful partnership with Raiffeisen International. It reinforces the commitment of the EBRD and of Raiffeisen International to the region during this challenging period. Maintaining the stability of the banking sector is a crucial component of the response to the international crisis,» said EBRD President Thomas Mirow.
«The decisive actions taken by the EBRD were very supportive for the region. They contributed significantly to stabilizing Central and Eastern Europe and to cushioning the impact of the financial crisis on the transformation process. In addition to our own operational alignment, the financing package will strengthen our subsidiaries, which is also for the benefit of the local economies», said Herbert Stepic, CEO of Raiffeisen International.
The funding offered by the EBRD is part of a coordinated package for Raiffeisen International, alongside the European Investment Bank and the World Bank Group, amounting to a total of up to ˆ1 billion.
The investment is part of the joint pledge by the three international financing institutions to provide over ˆ24.5 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.
So far this year, the EBRD has committed over ˆ2.2 billion to the financial sector in the countries where it invests. As a result of increased demand for the Bank's assistance, the EBRD is raising the level of its overall investments to up to ˆ8 billion this year.
The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. For further information, visit: www.ebrd.com
Raiffeisen International operates one of the largest banking networks in CEE, covering 17 markets across the region through subsidiary banks, leasing companies and a range of other financial service providers. The group’s nearly 60,000 employees service around 15 million customers via more than 3,100 business outlets. Raiffeisen International is a fully-consolidated subsidiary of Raiffeisen Zentralbank Osterreich AG (RZB), which owns about 70 per cent of the common stock. The remainder is in free float, with the shares listed on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group.