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New EBRD financing for Lithuanian bank
To continue the expansion of one of Lithuania's leading banks and to stimulate the growth of local small and medium-sized enterprises, the European Bank for Reconstruction and Development (EBRD) has extended to Bankas Hermis (BH) a DM 18 million (ECU 9.5 million) subordinated loan which may be converted into equity at a later stage. The EBRD already has a 14 per cent equity investment in BH which it undertook in 1995 alongside a ECU 6 million revolving credit facility.
David Hexter, Deputy Vice President of the EBRD, said: "This loan will reinforce the close relationship between our two institutions. Bankas Hermis has successfully overcome the banking crisis in Lithuania at the end of 1995, emerging as one of the leading banks in the country. The additional capital resources will support its continuing growth." He continued: "Strengthening the financial sector, improving capitalisation and developing the role of privately owned financial intermediaries are important aspects of the EBRD's strategy for Lithuania."
Nadiezda Novickiene, Chairperson and Chief Executive Officer of BH, said: "Today's signing is a significant event for Bankas Hermis, allowing the bank to increase its capital base and promoting further development of the Lithuanian economy. We are delighted by the success of our cooperation with the EBRD dating back to 1995 and we hope to continue to work together in the future."
The six-year loan will be used to increase longer-term lending to private businesses and to strengthen the new financial services recently introduced by BH.
Founded in December 1991 in Vilnius by 14 private and public companies, Bankas Hermis initially served the emerging private sector and has evolved into a purely private bank. Today it is over 98 per cent owned by private individuals and companies, 70 per cent of which are foreign. With 827 employees, BH has developed a wide range of products and services and has expanded its activities to other regions in Lithuania.
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