The EBRD is increasing the availability of financing to the real economy in Hungary, with a €50 million credit line to CIB Bank, including at least €10 million equivalent denominated in Hungarian Forint.
Majority-owned by the Intesa Sanpaolo Group, CIB Bank is the second largest bank in Hungary in terms of customer loan placements with a market share exceeding 11% and a major player in the corporate segment, with a growing SME portfolio.
The proceeds of the EBRD loan will be used to finance SMEs operating in Hungary in the form of short and medium term investment and working capital loans as well as leasing, factoring and other financing instruments.
The €10 million equivalent denominated in Hungarian Forints will enable CIB Bank to provide its clients with local currency financing, helping them to reduce exposure to foreign currency risks.
“The EBRD is pleased to contribute to the support of the real economy in Hungary at a time when businesses continue to face limited access to financing. This credit line will help to diversify CIB Bank’s funding base and will facilitate its lending in local currency, matching the needs of its clients and lowering risk both for the clients and the bank,” said Jean-Marc Peterschmitt, EBRD Director, Financial Institutions.
The credit line to CIB Bank is part of the €100 million financing package provided by the EBRD to three of Intesa Sanpaolo Group’s subsidiaries in central and eastern Europe, which also includes a €20 million credit line to Intesa Sanpaolo Bank in Bosnia and Herzegovina and a €30 million to Banca Intesa Beograd in Serbia.
The investment is part of a joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide €25 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.
Since the beginning of its operation in Hungary, the EBRD has invested over €2.6 billion across more than 150 projects in the infrastructure, corporate, energy and financial sectors.