Ceska sporitelna (Bail-in-able programme)

Location:

Czech Republic

Project number:

53686

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

22 Jun 2022

Status:

Signed

PSD disclosed:

19 Jul 2022

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The EBRD invested CZK 1.323 billion (EUR 53.5 million equivalent or 22% of the issuance amount) in a Senior Non-Preferred bond (the "Bond") issued by Ceska sporitelna, as part of a local issuance of CZK 6 billion, which will be listed on the Prague Stock Exchange. This Bond is eligible to meet the regulatory minimum requirements for own funds and eligible liabilities (MREL). The Bond has a maturity of 5 years, with a call option after 4 years.

Project Objectives

The Project supports a green economic recovery in the Czech Republic and the resilience of a systemically important bank in Czech Republic, and contributes to the local capital market development. The Project also aims to support strong Green-impact targets with at least 120% of the EBRD's investment to be allocated to finance green projects in line with EBRD's Green Economy Transition ("GET") eligibility criteria.

Transition Impact

ETI score: 57

The expected transition impact stems from its contribution to the Resilient and Green qualities:

Resilient: The Bond will contribute to (i) the resilience of the local banking sector and of a systemic financial institution - by building up its loss absorption capacity to meet regulatory requirements; and (ii) capital market development - by facilitating the introduction of a new debt instrument, the first bail-in-able instrument (SNP bond) - on the local capital market, and in local currency.

Green: The Project will support EBRD's Green Economy Transition (GET) approach in the Czech Republic, through Ceska sporitelna allocating 120% of EBRD's investments to GET-eligible projects further promoting the green agenda in Czech Republic.

Client Information

CESKA SPORITELNA AS

Ceska sporitelna is the second largest bank in the Czech Republic with 19% market share by total assets as of end 2021, and is classified as other systematically important institution (O-SII) in the Czech Republic. Ceska sporitelna is a wholly owned subsidiary of Erste Group Bank AG. It is rated A (stable) by Fitch, A1 (stable) by Moody's, and A (positive) by S&P.

EBRD Finance Summary

CZK 1,323,000,000.00

Total Project Cost

CZK 6,000,000,000.00

Additionality

The Project depicts strong additionality by supporting Ceska sporitelna to issue its first CZK-denominated SNP bond on the local market, with EBRD's participation facilitating further mobilisation of stable, long-hold institutional investors.

The Project also involves standard-setting in the request to allocate 120% of EBRD participation proceeds to GET-eligible projects meeting certain demanding standards and certification requirements. This helps Ceska sporitelna to promote green projects and enhance awareness and deployment of funds in this area and sets a market example for sustainable finance.

Environmental and Social Summary

Requirements 2, 4 and 9, comply with the EBRD's Environmental and Social Risk Management Procedures as appropriate for the type of investment they undertake and submit annual environmental and social reports to the Bank. Renewable energy projects financed with EBRD's use of proceeds will need to follow the E&S Eligibility Criteria for such projects and Ceska sporitelna will be expected to report on compliance with these annually. The GET share for this project is 100%.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

nullhttp://www.csas.cz
Ceská sporitelna, a.s. Budejovická 1518/13a,b Praha 4, 140 00 Czech Republic

Implementation summary

N/A

PSD last updated

19 Jul 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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 compliance@ebrd.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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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