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EBRD leads first syndications loan in Bosnia and Herzegovina
€45 million to help leading bank give clients access to long-term loans
Bosnia and Herzegovina is today receiving its first syndicated loan, which will introduce international commercial banks to the country’s banking sector, an area they have previously been reluctant to consider for investment.
The EBRD-led syndication, which was oversubscribed, will lend €45 million to Raiffeisen Bank d.d. Bosna i Hercegovina (RB) Sarajevo, the largest bank in the country, which will enable it to provide private-sector clients – including small and medium-sized businesses – with medium- to long-term financing that is otherwise scarce.
Rogers LeBaron, Director of Bank Lending at the EBRD, said the project is important because it will introduce new lenders to the Bosnian banking sector and will open a new avenue of opportunities for clients looking for longer term loans. By attracting commercial financing, RB will be in a position to expand its current lending opportunities that will benefit its many clients, added Mr LeBaron.
The EBRD will directly lend €15 million, and the remaining €30 million will be syndicated to nine banks from five countries. Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden is taking €10 million and Portugal’s Caixa Geral de Depositos, Germany’s Bayerische Hypo- und Vereinsbank and Austria’s Österreichische Volksbanken are each taking €3.5 million as co-arrangers. Acting as lead managers, State Bank of India is taking €2.5 million, while American Express Bank, Raiffeisen Zentralbank (RZB-Austria) and WGZ-Bank are taking €2 million each. Austria’s Adria Bank AG is taking €1 million as a manager.
Established in 1992 as Market Banka d.d., the bank was renamed in 2000 when it was acquired by RZB-Austria, which currently holds a 99.97 per cent stake in the bank. The EBRD has supported RB’s operations since 1997 through various facilities, including credit lines - to support the bank’s small business lending and consumer loans, through the trade facilitation programme - under which the EBRD can fully guarantee the political and commercial risk of trade-finance instruments, and until recently, through an equity investment in the bank.
Edin Muftic, Chief Executive Officer at RB, said that for Raiffeisen Bank, the syndication of this loan represents the continuing successful cooperation with the EBRD. Mr Muftic added that the facility will further improve RB’s product range for large corporate customers and small and medium-sized enterprises.
The EBRD is the largest investor in Bosnia and Herzegovina with €241 million invested in 32 projects. Raiffeisen Bank Bosna i Hercegovina provides its services through 56 branches in all parts of the country. As of 30 June 2003 the bank´s total assets amounted to €582.9 million.
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