The EBRD subscribed EUR 40 million to the EUR 500 million covered bond issued by Piraeus Bank S.A (Piraeus). The project signals the return of Greek banks to the international debt capital markets. The bond matures in October 2022.
The bond proceeds will be used to reduce the bank's dependence on Eurosytem's Emergency Liquidity Assistance Funding thus contributing towards the improvement of Piraeus' liquidity position.
ETI score: 60
The project will allow Piraeus to i) access medium-term funding, ii) diversify funding sources by facilitating re-entry to debt capital markets, and iii) address balance sheet mismatches.
PIRAEUS BANK SA COVERED BONDS
Piraeus is the largest bank in Greece out of the four systemic banks by total assets comprising EUR 68 billion on a consolidated basis as of September 2017. PB has a market share of around 30% in terms of gross loans and 29% in terms of deposits domestically, benefiting from the largest banking network in Greece.
EBRD Finance Summary
EUR 200 million envelope for EBRD's investments in covered bonds issued under Piraeus' Global Covered Bond Programme, whereby outstanding balance of investments would not exceed EUR 100 million at any point in time. The investment in the five-year benchmark covered bond issued by Piraeus in October 2017 was made in the amount of EUR 40 million.
Total Project Cost
Environmental and Social Summary
Categorised FI (ESP 2014): Piraeus is required to comply with the EBRD's Performance Requirements 2, 4 and 9, adopt and implement EBRD's Environmental and Social ("E&S") Procedures for Financial Institutions and submit Annual E&S reports to the EBRD.
Technical Cooperation and Grant Financing
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The project supportedthe broadening of Piraeus Bank's financing options by re-introducing covered bonds as a valuable funding tool. Since the onset of the Greek financial crisis in 2009, Greek banks were essentially left out of debt capital markets; in this context, this was also Piraeus Bank's first debt capital market transaction since the imposition of capital controls in 2015 and its first covered bond issuance to be subscribed by external investors. This transaction was successfully launched in October 2017 with the participation of two other IFIs and one commercial private investor. As a part of EBRD's transition impact objectives, the project has successfully contributed to the diversification of PB's funding base and the reduction of the bank's dependence on ELA funding.
PSD last updated
11 Nov 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to email@example.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.