Project description
and objectives:
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The proposed project is an equity investment in TTK Bank AD Skopje, a
universal bank to be formed as a result of the merger between Teteks Kreditna
Banka AD Skopje (TKB) and Tetovska Banka AD Tetovo (TEB). EBRD’s investment
will be in a form of subscription of newly issued ordinary voting shares
resulting in the EBRD acquiring a minority stake up to 25% in TTK with
corresponding voting rights. EBRD’s investment will strengthen TTK’s capital
base and support the bank’s restructuring and transformation into a strong
niche player in the SME and retail sectors in particular.
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Transition impact:
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While dominated by three large banks, the Macedonian banking sector is not
sufficiently competitive, resulting in generally limited interest in deeper
market penetration and expansion of services. The sector continues to include
a large number of small and weak institutions unwilling to merge and unlikely
to be able to grow on a sustainable basis. In this context, the transition
impact potential of the project can be summarised as follows:
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Facilitation of a merger that will provide strong demonstration effect and
contribute to the much needed consolidation of the banking sector;
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Promotion of healthy competition in the market;
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Promotion of high corporate governance standards; and
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Promotion of financial intermediation by supporting the growth of a bank
committed to change and targeting sectors that currently have limited access
to financial services such as the SME and retail segments.
Further, the transaction is expected to have a positive impact on the
provision of the banking services in the Tetovo region, in North West of FYR
Macedonia in particular. This region has traditionally been TEB’s stronghold,
and still relatively poorly serviced by other financial institutions.
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The client:
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TTK Bank AD Skopje (“TTK”), a new bank to be formed as a result of a merger
between Tetovska Banka AD Tetovo (“TEB”) and Teteks-Kreditna Banka Skopje
(“TKB”). The merger is expected to take place in April 2006. TEB and TKB are
both small locally owned banks with a combined market share of approximately
2% of total banking sector assets. Both banks have the same key shareholder,
the textile group Teteks AD, Tetovo. As of end October 2005, on a
consolidated basis, TEB and TKB had total assets of EUR 47 million.
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EBRD finance:
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Equity investment up to EUR 4.0 million.
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Total project cost:
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Up to EUR 4.0 million.
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Environmental impact:
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Screened FI. Environmental risk rating: medium/low.
Environmental opportunities rating: medium/low.
TKK bank will be required to apply EBRD’s Environmental Procedures for Small
and Micro Loans to all commercial lending activities including sub-loans
financed through the Credit Line, and to submit annual environmental reports
to EBRD.
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Technical
cooperation:
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1) Pre-investment TC was provided to the two merging banks to support the
integration process planning. The TC budget was EUR 49,500 and was funded by
the Dutch Government.
2) A comprehensive Institution Building Programme (IBP) supported by TC will
be an integral part of EBRD’s equity investment. The TC programme providing
assistance to TTK in the implementation of the IBP will have duration of up to
24 months. The final budget is still to be determined.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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Mr Nikolce Petkoski
TKB General Manager and the nominee for TTK Deputy
General Manager
Naroden front - 19A
1000 Skopje
FYR
Macedonia
Telephone: + 389 (0) 2 3236400
Fax: + 389 (0) 2 3236444
E-mail:
petkon@tkb.com.mk
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EBRD contact:
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Leonie See, Operation Leader: seel@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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