The project consists of a mortgage finance facility (MFF) of DM 200 million, comprising an A loan of DM 100 million for the EBRD's account and a B loan of DM 100 million to be syndicated among participating banks.
The facility will enable ZB to make long-term housing loans to private customers for purchasing (or renovating) their residences in Croatia. The proposed facility will also allow ZB to expand its mortgage finance operations and to improve its existing maturity mismatch of its assets and liabilities by providing long-term funding.
The two key areas of transition impact are:
making long-term funds available to private individuals to purchase a private residence in Croatia. Home ownership is one of the hallmarks of a market-oriented economy, and the project will contribute to extending this opportunity to an increasing number of Croatians;
to continue to support private sector banks to enable them to offer a full range of banking services.
Zagrebacka Banka (ZB) is the largest Croatian bank, providing a full range of wholesale, investment and retail banking services. ZB employs some 4,300 people and serves over 1,800 corporate borrowers, 60,000 corporate depositors, over 1 million retail depositors and a rapidly expanding number of retail borrowers.
As of September 1997, ZB had total assets of DM 6,423 million equivalent and shareholders' equity of DM 650 million equivalent. ZB operates from its headquarters in Zagreb and has a network of 127 branches.
The EBRD will provide an A loan of DM 100 million for its account and a refinancing guarantee after seven years to the participants of the B loan. The total amount of the refinancing guarantee will not exceed DM 50 million.
DM 200 million (ECU 113.6 million).
ZB will take measures to ensure that any property financed through this facility is not or will not be constructed on contaminated land or using materials hazardous to the environment, health and safety. ZB will also ensure that properties are in compliance, at a minimum, with national and municipal planning controls and building standards.
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Text of the PIP