EBRD invests in Bank Zachodni WBK subordinated bonds

By Axel  Reiserer

EBRD invests in Bank Zachodni WBK subordinated bonds

Polish lender will invest EBRD funds in environmentally friendly commercial and residential construction

  • EBRD invests equivalent of €36 million in zloty-denominated subordinated bonds from Bank Zachodni WBK S.A.
  • BZ WBK commits to on-lending EBRD proceeds plus extra funds for environmentally friendly construction of commercial and residential projects in Poland.
  • EBRD dedicated to increasing climate finance across its regions.

The EBRD has invested PLN 150 million (€36 million equivalent) in zloty-denominated subordinated bonds issued by Polish lender Bank Zachodni WBK S.A. (BZ WBK) as part of its PLN 1 billion (€240 million equivalent) issue of subordinated bonds.

The Tier II capital eligible bonds have a 10-year maturity, are callable after five years and will be listed on the Warsaw Stock Exchange. The bonds are compliant with the European Union’s Capital Requirements Regulation and Capital Requirements Directive IV (commonly referred to as CRR/CRD IV or Basel III).

BZ WBK has committed to allocate the equivalent of 140 per cent of the proceeds from EBRD investments in the subordinated bonds to finance the construction of certified commercial and residential greenfield projects, in line with the EBRD’s Green Economy Transition approach.

The EBRD’s Green Economy Transition approach is a flagship initiative which promotes sustainable energy and resource use. The Bank is a leader in working with private sector financial institutions across its regions of operations, providing regional banks with finance for sustainability projects. Bank Zachodni WBK is one of the largest financial institutions in Poland. BZ WBK is listed on the Warsaw Stock Exchange, with a market capitalisation of PLN 35.3 billion (€8.4 billion equivalent) at the end of March 2018. BZ WBK had a 10.1 per cent market share by loan portfolio and 10 per cent by deposits as of the end of September 2017. Banco Santander is BZ WBK’s single largest shareholder, with 68.13 per cent of total capital.

Since the beginning of its operations in Poland in 1991, the EBRD has invested €8.8 billion in more than 390 projects in the country. In addition to its wide range of products for banks and companies, in recent years the EBRD has built a growing portfolio of investments (both equity and debt) in the Polish financial sector, for which demand remains high.