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EBRD invests in new Croatian bank
As part of its strategy to support Croatia's financial sector, the European Bank for Reconstruction and Development (EBRD) is to invest HRK 18.5 million (ECU 2.8 million), in Hypo Banka Croatia (HBC), a recently established bank focusing on the Alpe-Adria region, to finance the development of the bank's activities.
"By supporting Hypo Banka Croatia, the EBRD is contributing to the economic integration of Croatia within the Alpe-Adria region and in the wider European Union market," said Kurt Geiger, Co-Director of the EBRD's Financial Institutions Team. "The EBRD's equity investment is instrumental in promoting the development of a healthy local banking sector offering competitive services and innovative products to local corporations and individuals."
HBC was established in May 1996 by the Austrian bank Kärntner Landes-und Hypothekenbank AG (KH) in response to the rapidly increasing volume of business with Croatia and the demand for high-quality customised banking services from a growing number of local and international clients. It is due to this demand that HBC is increasing its capital base to provide it with the appropriate levels of funds. The EBRD will subscribe to 4,612 newly issued registered shares or 24.99 per cent of the new capital. KH will hold the remaining 75.01 per cent.
HBC will capitalise on KH's 100 years of experience in asset-based and project financing, and its know-how in mortgage lending, as well as its network of clients involved in regional trade and investment operations. HBC will become a new local partner for the EBRD, with which it will develop co-financing opportunities and other product lines, such as trade finance and mortgage financing lines.
As of the end of December 1996 the volume of KH's business relating to and generated from Croatia amounted to ECU 108 million of financial services, representing about 3.8 per cent of KH's total consolidated assets.
KH is the successor to Kärntner Landeshypothekenanstalt, which was founded in 1894 as a special institution focusing on the development of regional business to finance mortgage lending to individuals and medium to long-term lending to both private and government-owned entities. KH has since diversified its activities outside Austria to become a specialised institution for the Alpe-Adria region, including Carinthia, northern Italy, Slovenia and Croatia.
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