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Kyrgyzstan's first foreign-owned commercial bank receives EBRD financing
To help ensure the success of the first foreign-owned commercial bank in Kyrgyzstan, the European Bank for Reconstruction and Development (EBRD) is subscribing an initial equity investment of US$ 300,000 (ECU 240,000) to the newly established DemirKyrgyz International Bank (DIB). The new bank will provide a full range of banking services, with a focus on international payments and trade financing services.
At the signing ceremony, the EBRD's Co-Director of Financial Institutions, Pierre Mellinger, remarked: "Boosting confidence in the banking sector in Kyrgyzstan at this moment is a priority. The EBRD sees the establishment of DIB as a catalyst for the development of the sector. It will help introduce an enhanced level of professionalism into the local market and thus increase both competition among existing financial intermediaries and resource mobilisation for the private sector."
The principal shareholder and sponsor of DIB is Demirbank (DMB), a commercial bank established under Turkish law, which will hold an initial 60 per cent of the new bank's authorised ordinary shares.
Ali Ayanlar, a board member of DMB, noted: "We are very pleased to put our signatures on these documents and establish this joint-venture bank in Kyrgyzstan with the EBRD, the International Finance Corporation and FMO, the Netherlands Development Bank. We are confident that this bank will represent an important milestone in the development of commercial banking in Kyrgyzstan. Our investment represents the first step in Demirbank's future network in the Asian republics of the former Soviet Union."
As the first foreign-owned commercial bank in Kyrgyzstan, DIB will bring international management experience to the country and set new standards of expertise and customer service. It intends to introduce previously unavailable products and services, and to work with the National Bank of Kyrgyzstan in the reform of the interbank market.
Alongside DMB and the EBRD, the International Finance Corporation is taking 15 per cent and FMO will own the remaining 10 per cent. DMB will seek to reduce its holding to 51 per cent by involving local investors at the earliest appropriate time. The EBRD will own 15 per cent of DIB's shares.
The EBRD will provide a US$ 2 million (ECU 1.6 million) credit line to provide short to medium-term finance to the private sector in Kyrgyzstan once DIB is well established and operating in the local market place.
DMB, founded in 1953, is one of the few privately owned banks in Turkey which is not part of an industrial group. It provides trade finance and other related commercial services. DMB has a subsidiary in Holland and is also participating in a Romanian leasing company. DIB is its first investment in Central Asia.
FMO was established in 1970 and specialises in long-term financing enterprises in Asia, Africa and Latin America. Since 1991, it has also been operating in eastern Europe and Central Asia.
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