Bank equity projects

Project Summary Documents

Project Summary Documents (PSDs) are disclosed for each project prior to Board consideration. They contain project descriptions, financial details, client information, environmental issues, tender guidelines, and contact details. PSDs for private sector projects are disclosed at least 30 days prior to Board consideration and for state sector projects, at least 60 days.

Project Summary Documents

Signed projects

Board approval is the final stage in the project approval process. After Board approval, the EBRD and the client sign the deal and it becomes legally binding. Signed project lists reflect year-end data.

Signed projects  (0.1Mb)

Case studies

Strengthening commercial practices in Komercijalna Banka

The EBRD is showing its growing confidence in Serbia’s economic development by helping the country’s largest majority state-owned bank, Komercijalna Banka, develop into a modern, efficient institution that is able to build on its strong market position and take full advantage of Serbia’s biggest branch network.

The EBRD bought a 25 per cent stake in Komercijalna Banka in March 2006. The immediate impact of this investment is to help the bank develop its business now. Longer term, it will also help to prepare Komercijalna Banka for full privatisation through a planned initial public offering (IPO) in three to five years’ time.

With this goal in mind, the EBRD has put special emphasis on the implementation of a comprehensive institution-building plan developed in cooperation with Komercijalna Banka’s management. This programme, financially supported with donor funds from Canada, aims to raise corporate governance to international levels, strengthen credit and risk management procedures, upgrade customer service standards and introduce new IT systems.

Through this project, the EBRD will serve as a catalyst for the restructuring of Komercijalna Banka. The EBRD will work with the Serbian government, the other minority shareholders and the management of the bank towards full privatisation. The EBRD’s investment signals growing confidence in Serbia’s economic development, and is expected to encourage further investment.

Komercijalna Banka is Serbia’s fourth-largest bank and the largest with majority state ownership. While other state-owned banks have been sold to strategic investors, Komercijalna Banka’s aim is to achieve a successful listing on the Belgrade Stock Exchange.

“We aim to become a strong publicly listed alternative to the foreign-owned banks in our country,” said Ivica Smolic, President of Komercijalna Banka’s Executive Board. “We are grateful to the EBRD for acting as a forceful independent partner helping us to realise this vision.”

In Serbia, a fast-growing economy is prompting swift developments in the financial sector so that banks can keep up with the wealth being generated by Serbian business success, offering products that are sophisticated and flexible enough to satisfy the domestic market and reaching out to global markets too.

The EBRD paid €70 million for its stake in Komercijalna Banka, evidence of the Bank’s continuing strong commitment to the development of the Serbian financial sector. The investment should also facilitate Komercijalna Banka’s access to long-term funding in the international commercial markets.

Helping entrepreneurs in Azerbaijan

Fakhraddin Bakhishev and Mahir Mishiyev form the FM Partnership, a brick-making business in the city of Sumgait in Azerbaijan. The company supplies bricks and other materials to the local construction industry.

As orders increased over the years, the company realised it needed new investment to meet this demand. Turning to Unibank for help, they received a €238,000 three-year loan, allowing them to increase production capacity and improve the range of their products.

Helping small and medium-sized enterprises (SMEs), such as FM Partnership, is the main activity of Unibank, one of the biggest private banks in Azerbaijan and the first private sector merger in the country’s banking sector. Since 2002, Unibank has provided small businesses with access to longer term loans through a €1 million credit line provided jointly by the EBRD and the International Co-operation and Development Fund of Taipei China.

In 2003 the EBRD increased our support by acquiring a 20 per cent stake in Unibank, our first in a local bank in Azerbaijan. Our financing will strengthen Unibank’s capital base and help the bank to develop new products. As a result, the bank will improve its services to SMEs and be able to pursue its long-term aim of becoming the leading full-service bank in the country – providing a full range of services to retail and business customers. Training and other assistance is being supported through funding from the EU’s Tacis programme.

Better services for customers of Slovenia's largest bank

The privatisation of Nova Ljubljanska Banka (NLB), the country’s largest banking group with over 45 per cent consolidated market share, will enhance competition in Slovenia’s banking sector. It is also expected to raise service standards and improve efficiency.

The EBRD has acquired 5 per cent of NLB, with provision to acquire up to a further 9 per cent. Our investment as part of NLB’s privatisation represents one of our largest investments in a privatisation process in central and eastern Europe. It provides support for NLB and its strategic investors to establish NLB as a leading regional bank in central Europe.

NLB has an important strategic investor in KBC Bank of Belgium, which has acquired 34 per cent of the bank’s shares. The EBRD’s investment, together with that of KBC, will enable NLB to extend its banking operations, develop new products, such as mortgage lending, and expand its branch network in the region and internationally.

The privatisation will encourage high standards of corporate governance by fostering transparency and accountability among NLB’s shareholders. The EBRD and KBC will have representation on the bank’s supervisory board, allowing us to participate in management decisions.

The potential listing of NLB on the Ljubljana Stock Exchange by the end of 2003 will support the development of Slovenia’s capital markets. The project will also assist Slovenia’s accession to the European Union, as privatisation of NLB is one of the EU’s recommendations.

In parallel with the EBRD financing, the Council of Europe’s Development Bank (CEB) has provided a loan to NLB without a sovereign guarantee. This will enable the bank to meet the demand for borrowing in the local health sector. This form of cooperation between the EBRD and CEB increases the project’s impact on the transition process by combining economic and social benefits. It could also act as a model for further cooperation.

VUB Pre-privatisation

The second-largest bank in the Slovak Republic, Všeobecná Úverová Banka (VÚB), has been given new momentum with the help of an EBRD equity investment and the bank's subsequent privatisation. Substantial state ownership of the banking sector in the Slovak Republic had significantly hampered its potential for growth, and a number of banks had accumulated high levels of non-performing loans. Following a major restructuring in 1999 that radically improved its balance sheet, VÚB attracted equity investments from the EBRD and the IFC, helping to raise the confidence of potential strategic investors.

The IFC and the EBRD each bought 12.5% of the shares of VÚB. Following the share purchase, the privatisation tender went ahead successfully. In November 2001 VÚB was finally purchased by the Italian bank IntesaBCI, with the EBRD and IFC exiting at this point. However, the EBRD continues to support VÚB through a €20 million credit line for on-lending to small and medium-sized enterprises (SMEs). This was provided under the EU/EBRD SME finance facility and includes assistance to help the bank train its staff and improve its systems.