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Investors led by EBRD in support of Yugoslav bank
€4.5 million capital increase in Eksimbanka highlights confidence in bank sector reform
A group of international investors led by the European Bank for Reconstruction and Development has purchased €4.5 million of new shares in local Yugoslav bank Eksimbanka, effectively doubling its capital base. The capital increase will allow Eksimbanka to strengthen its core business of providing medium-term loans and trade finance products to local small and medium-sized enterprises.
The EBRD's investment will be €1.3 million, giving it a 14.4 per cent shareholding, and reflects the Bank's confidence that banking sector reforms in Yugoslavia are progressing. Other investors include the Southeast Europe Equity Fund Ltd, a private equity fund managed by Soros Private Funds Management, which is providing €1.1 million; Deutsche Investitions-und Entwicklungsgesellschaft mbH, providing €1 million; and Futura Investment, €1.1 million.
It is the first time a group of international investors has bought equity in a local Yugoslav bank in more than a decade, said Victor Pastor, the EBRD's Director for Bank Equity. Eksimbanka, he explained, is uniquely positioned to support small and medium-sized businesses and is in fact one of the few banks offering competitive loans to local entrepreneurs. "It is a local bank for local businesses, but with international support," Mr Pastor said.
Currently operating from one main office and two small subsidiaries, Eksimbanka aims to open further offices across the country over the next year. It will support SMEs through loans ranging between €150,000 and €250,000. Eksimbanka recently became the first Yugoslav bank to join a programme backed by the EBRD to facilitate trade in the region through the provision of guarantees on imports and exports. It is also developing an institution-building programme for which the EBRD is helping mobilise support from donors.
Eksimbanka was established in 1991 as a subsidiary of Investbanka a.d. Beograd. At that time the bank mostly served large state and socially owned companies - the clients of Investbanka. Four years later Eksimbanka started operating independently and, after the lifting of sanctions in 1996, offered regular banking services for corporate customers. The principal business focus has since shifted to serving private SMEs. The shareholder structure of the bank was reformed in 1998, when SMEs became the dominating shareholder group of the bank, collectively owning 60 per cent.
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