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EBRD and IFC invest EUR100 million each in Raiffeisen International
Increase of equity to support Raiffeisen International’s dynamic growth in Central and Eastern Europe
The International Finance Corporation (IFC), the private sector arm of the
World Bank Group, and the European Bank for Reconstruction and Development
(EBRD) signed agreements with Raiffeisen Zentralbank Österreich AG (RZB), each
to subscribe €100 million to a capital increase of RZB’s subsidiary Raiffeisen
International Bank-Holding AG (Raiffeisen International). The IFC and EBRD
investments correspond to a share of 4 per cent each in Raiffeisen
International’s equity. The €200 million in new capital will support the
growth of Raiffeisen International’s business in Central and Eastern Europe.
As previously announced, Raiffeisen International is continuing preparations
for an IPO, which are expected to be completed within the first six month of
2005 in order to be ready to respond flexibly should market conditions prove
favourable for an IPO.
IFC Executive Vice President Peter Woicke commented, “Raiffeisen International
contributed significantly to the development of the banking industry in
Central and Eastern Europe and continues to do so. There is a strong strategic
fit between Raiffeisen’s and IFC’s priorities in the region. Our investment
will support Raiffeisen’s expansion in markets that continue to be
underserved. It will help Raiffeisen scale up financing activities for small
and medium enterprises and the housing sector, which are key to promoting
sustainable economic growth in Central and Eastern Europe.”
Noreen Doyle, First Vice President of the EBRD, said, “The investments will
support Raiffeisen International’s ability to invest in early transition
markets and to introduce new products, particularly in SME and retail banking,
mortgage lending, and leasing. The EBRD’s mission is to help attract such
investment – and ultimately provide the people of the region better access to
finance.”
Walter Rothensteiner, Chairman of the Board of Management of RZB and Chairman
of the Supervisory Board of Raiffeisen International, stated, “This
partnership is a milestone for RZB. So far, we have achieved dynamic growth in
Central and Eastern Europe with internally generated funds. With the
involvement of IFC and the EBRD, we take an important step in our strategy of
opening Raiffeisen International to other investors.”
“We welcome and appreciate the equity participations of IFC and the EBRD, our
long-time partners in earlier projects. Their support is a valuable
contribution to further dynamic growth of Raiffeisen International in the
region,” said Herbert Stepic, Deputy Chairman of RZB’s Board of Management and
CEO of Raiffeisen International.
Raiffeisen International is the holding company for RZB's subsidiaries in
Central and Eastern Europe and was owned 100 percent by RZB prior to the
capital increase. RZB is the central institution of the Austrian Raiffeisen
Banking Group, the country's most powerful banking group. A leading corporate
and investment bank in Austria, RZB considers Central and Eastern Europe as
its home market. Through Raiffeisen International, it operates a network of 15
subsidiary banks with more than 800 banking outlets, as well as two
representative offices in 16 markets of the region.
IFC’s strategy in Europe’s emerging financial markets is threefold. First,
IFC supports the development of mortgage and small business finance through
banks and leasing companies. Second, IFC works to strengthen local financial
institutions, including institutions to be privatized, to develop banking
services, and to increase financing available to local businesses. And
finally, in the more developed markets, IFC actively promotes the growth of
efficient capital markets. By supporting RZB’s network in the region, IFC is
making considerable contributions in all of these areas.
The mission of IFC (www.ifc.org) is to
promote sustainable private sector investment in developing countries, helping
to reduce poverty and improve people’s lives. IFC finances private sector
investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY04, IFC has committed more
than $44 billion of its own funds and arranged $23 billion in syndications for
3,143 companies in 140 developing countries. IFC’s worldwide committed
portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion
held for participants in loan syndications.
The EBRD, owned by 60 governments and two intergovernmental institutions,
aims to foster the transition from centrally planned to market economies in
Central and Eastern Europe and the Commonwealth of Independent States.
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