The EBRD is increasing the availability of financing in Poland with a €100 million medium term credit line to Bank Millennium for on lending to small and medium enterprises (SMEs).
Although Poland has been less affected by the financial crisis compared with other countries in the region, access to finance by enterprises, in particular SMEs, has been severely reduced.
Responding to the new market conditions, Bank Millennium, majority-owned by Banco Comercial Português, aims to increase its business in the SME segment in Poland.
The EBRD funds will support Bank Millennium’s strategy to rebalance its loan portfolio by strengthening the corporate lending side of its business. In addition, the EBRD loan will support Bank Millennium’s efforts to raise medium term funding.
The loan complements Bank Millennium’s plans to prepare for future growth by raising additional capital of 1 billion Polish Zloty through a rights issue, expected to be launched in the first quarter of 2010.
The proceeds of the credit line will be used to provide working capital and capital investment for small and medium-sized businesses in Poland.
“The EBRD is pleased to support Bank Millennium both in its drive to develop a more balanced business model in the current difficult market conditions and in its efforts to prepare for growth in lending as economic recovery gathers strength. This transaction will provide a boost to the financial sector in Poland, to the benefit of local businesses currently facing limited access to credits”, said Jean Marc Peterschmitt, Director, Financial Institutions Department of the EBRD.
“We are pleased with the beginning of our cooperation with EBRD. The loan that we are taking will be used to support the development of our lending to small and medium sized companies in Poland, which is in line with the Bank’s strategy to enhance its activity in this area, as recently announced”, said Bogusław Kott, Chairman of the Bank Millennium Management Board.
Bank Millennium is a universal bank in Poland with a nationwide presence of 490 branches, ranking fifth in the country by lending assets.
Since the beginning of 2009 the EBRD has committed over €2.24 billion to support the financial sector in countries of its operations.
To date the EBRD has invested €3.8 billion in Poland