UAH 43 million financing package for an eastern Ukrainian bank
The European Bank for Reconstruction and Development (EBRD), KfW, the German development bank on behalf of the German Ministry for Economic Cooperation and Development, and the International Finance Corporation (IFC) are participating in a UAH 43 million (€1.8 million) equity deal with Ukraine’s MEGABANK - one of the key regional banks in the eastern Ukraine.
The international financial institutions, which already hold stakes in MEGABANK, have decided to participate in a pro rata capital increase thus keeping their collective stake in the bank at a level of 36 per cent.
The project shows that international financiers remain committed to Ukraine and are ready to support good businesses, like MEGABANK, in extremely adverse geopolitical and macroeconomic situation. It is expected that the agreed capital increase will help MEGABANK to boost its capital base and strengthen stakeholders’ confidence. Additional resources will also help the bank remain an important provider of SME finance in the region.
As a part of a broader support package to MEGABANK, KfW has recently provided it with a US$ 4.75 million subordinated debt facility and the EBRD correspondingly increased its Trade Facilitation Programme limit for MEGABANK by US$ 4 million in December 2014.
By making this equity investment, the EBRD is continuing to support Ukraine’s banking sector, which attracted over €300 million from the Bank in 2014 alone.
KfW was founded in 1948 as a corporation under public law with its headquarter in Frankfurt am Main. KfW is Germany’s leading promotional bank for the domestic economy as well as for developing and transition countries. KfW's capital is held 80% by the Federal Republic of Germany and 20% by the German federal states (Länder). With a balance sheet total of EUR 465 billion (30.09.2014) KfW is one of Europe's largest banks. KfW has been operating in Ukraine under the TRANSFORM Programme since 1992 and has also been implementing Financial Cooperation with Ukraine on behalf of the German federal government since 2003. So far around EUR 300 million has been committed mainly in the areas of energy efficiency, the financial sector (first of all promotion of SME lending), social and municipal infrastructure. Visit KfW’s website: www.kfw.de
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. For more information, visit www.ifc.org.
MEGABANK, PJSC has been operating in the banking market since 1990. Among the shareholders of MEGABANK there are the European Bank for Reconstruction and Development (EBRD), German Development Bank KfW and International Finance Corporation (IFC). The regional network of MEGABANK, PJSC includes 158 units in 18 regions of Ukraine. MEGABANK provides a full range of classical banking services used by 549,000 customers. A specific feature of MEGABANK is its unique banking product - Integrated Clearing Center (ICC) for payment for housing and utility services, which has been developed and implemented in 11 regions of Ukraine. The National Bank of Ukraine moved MEGABANK, PJSC from a group of medium-sized banks up to the group of big banks for the year 2015. For more information, please, visit www.megabank.net