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EBRD extends a credit line to support Lithuanian bank
The Lithuanian private sector and privatisation process will be boosted through an ECU 6 million credit line from the European Bank for Reconstruction and Development (EBRD). The credit line, signed in Vilnius yesterday, will go to Bankas Hermis (BH), a joint-stock company incorporated in Lithuania.
David Hexter, Deputy Vice President of the EBRD, said: “The credit line will be essential in the development of the Lithuanian private sector. It will be used for on-lending to small and medium-sized enterprises. It will also contribute to the institutional strengthening of BH by providing technical assistance to sustain the bank as a major player in the Lithuanian financial sector”.
Denominated in US dollars, the credit line will fund BH’s medium and long-term investment projects for SMEs that are privately owned, or state-owned in the process of privatisation. BH has a healthy pipeline of sub-projects covering a wide range of economic sectors.
The project will be accompanied by a comprehensive institutional strengthening programme carried out by a consortium of Norwegian banks.
The EBRD is also finalising the legal documentation for an equity investment in BH, which is expected to materialise before the end of the year.
Founded in December 1991 in Vilnius, BH has aimed to serve the emerging private sector and evolve into a genuine private bank. It has grown substantially and has developed a wide range of products and services throughout Lithuania. BH is one of the country's largest banks, with very good growth prospects and the highest capital adequacy ratio. Its shareholding is widely spread through 1,700 shareholders, of which 93 per cent are private individuals and companies. In mid-1995 the bank had total assets of Litas 230 million (ECU 46 million).
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