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EBRD signs €20 million credit line to VUB
The European Bank for Reconstruction and Development today signed a €20 million credit line to Všeobecná úverová banka (VUB) to support small and medium-sized enterprises in the Slovak Republic. It is the first credit line for a Slovak bank provided under a SME Finance Facility funded jointly between the EBRD and the European Community. Similar credit lines have already been extended to banks in Bulgaria, Czech Republic, Latvia, Lithuania, Poland, Romania and Slovenia.
VUB is the second-largest bank in the Slovak Republic and an effective partner for the EBRD to reach out to the country's small business sector. The project includes an additional EC-grant of €1.4 million for technical cooperation aimed at developing a sustainable SME lending programme for VUB, and a further grant to help cover the costs of developing this programme.
The EBRD has made the development of SMEs in the region one of its key priorities. The Bank's Business Group Director for Financial Institutions, Kurt Geiger, said that SMEs help diversify economies and provide new job opportunities. He said this credit line to VUB would increase lending to small and medium-sized businesses, encouraging the growth of SMEs and entrepreneurs in the Slovak Republic.
The credit line has a five-year maturity and will allow VUB to build a portfolio of good quality loans. Individual loans will not exceed €125,000. The technical cooperation funding will support lending procedures for SMEs designed to speed up the credit-approval process.
VUB has a committed agenda to increase small loans within its ongoing business strategy, said Ladislav Vaskovic, Chairman of the Board and President of VUB. This EBRD credit line will enhance our expertise in small-business finance, increase the pace of lending and, ultimately, help fuel economic growth in the Slovak Republic, he added.
VUB was established in 1990 as a state bank comprising part of the corporate banking business and assets of the former State Bank of Czechoslovakia. It is the leading corporate bank in the Slovak Republic, with 28 per cent and 20 per cent market shares in loans and deposits, respectively. It has developed a strong retail banking franchise and commands a 21 per cent share of retail deposits. The bank has 230 branches and sub-branches and 6,050 employees. In support of the Slovak government's privatisation of VUB, the EBRD earlier this year purchased a 12.5 per cent shareholding in the bank. Full privatisation of VUB is expected to take place by the end of the third quarter of 2001.
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