EBRD: Record Q1 investments and earnings as Mediterranean expansion gathers pace

By Anthony Williams
@ebrdtony

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The EBRD invested a record amount in the first quarter of 2012 while also advancing preparations to extend its activities to the southern and eastern Mediterranean (SEMED) region.

Strong earnings in the same period will provide the EBRD with additional capital resources to meet future challenges in both its existing and future areas of operations.

The Bank continued its support to central and eastern Europe as it committed an unprecedented €1.9 billion in 73 individual transactions in the first quarter, compared with €1.1 billion in 67 transactions in the same period in 2011.

Net profits in the first quarter rose sharply to €637 million from €330 million in the first quarter of 2011. The new figure was a record quarterly result for the Bank, on the back of strong net interest income and a recovery in the value of the Bank’s equity investments.

Commenting on the latest figures, EBRD President Thomas Mirow said: “This has been a strong first quarter. At a time when credit remains restricted in many markets, these figures show that the EBRD has an important role to play in supporting growth. With record volumes and sound profitability and capital position, the Bank is in excellent shape going into its annual meeting.”

First quarter 2012 financing in the EBRD’s Early Transition Countries (*) nearly doubled to €214 million from €108 million, while financing in the Western Balkans rose to €161 million from a previous €133 million.

At the same time, the EBRD continued to roll out its response to the political changes in the Middle East and North Africa with its plans to invest in the SEMED region.

Ahead of the start of fully fledged investments in the region and pending ratification by its 65 shareholders of a decision to extend the Bank’s geographic remit, temporary offices were opened in Cairo, Casablanca and Tunis. Another temporary office is due to be opened later in April in Amman, Jordan.

Mrs Hildegard Gacek was appointed as Managing Director for the SEMED region in early April.

Since late 2011, the EBRD has been actively working with donors to support technical cooperation projects enabling an effective start to EBRD activities in the SEMED region. Furthermore, at the Annual Meeting in London in May, EBRD management will propose to shareholders the creation of a special fund worth €1 billion out of net income to enable financing of projects in the SEMED region before the changes to the EBRD Treaty have been fully ratified.

Ultimately, the EBRD expects to be able to invest around €2.5 billion a year in the new region without detracting from financing in its existing countries of operations.

*The EBRD’s Early Transition Countries Initiative aims to stimulate economic activity in the Bank's countries which still face the most significant transition challenges: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan, Turkmenistan and Uzbekistan.

 
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