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EBRD makes first major equity investment in leading Russian bank
A US$ 35 million equity investment agreement was signed today between the European Bank for Reconstruction and Development (EBRD) and Tokobank, marking the first major equity investment by an international financial institution in a Russian bank.
At the signing in Moscow, Ron Freeman, First Vice President of the EBRD, said: "This is an important step for Russia's domestic banking industry. Through its investment, the EBRD is facilitating Tokobank's ability to meet the needs of its Russian corporate customers for working capital and term finance, as Russian privatisation continues to grow."
Tokobank's President, Victor Yakunin, stated: "The EBRD's investment will allow us to pursue our objectives of becoming a benchmark Russian bank and of expanding our products and markets, especially in project financing which requires longer term credits. This investment lays the groundwork for further cooperation between us and the EBRD".
Tokobank is the fourth-largest Russian commercial bank and the EBRD's investment will give it 14 per cent of the US$ common voting stock. It will also be represented on the Russian bank's Council.
Operating through a network of 16 branches throughout Russia, Tokobank has rapidly built a focused and well-managed operation since its inception as a joint-stock company in early 1991. It currently provides corporate banking services in roubles and hard currencies to large and medium-sized enterprises, mainly in the oil and gas sector, to finance spare parts and materials. It has over 400 corporate shareholders, with a strong representation from the natural resources sector. Tokobank is one of Russia's largest hard currency lenders and is widely regarded as one of the leading Russian commercial banks.
Technical cooperation funds will also be made available under the Financial Institutions Development Programme (FIDP), undertaken jointly by the EBRD and the World Bank. Tokobank is to be twinned with a foreign bank to assist it with its internal development programme.
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