BANC POST MORTGAGE LOAN II

Location:

Romania

Project number:

35426

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

16 Nov 2004

Status:

Complete

PSD disclosed:

08 Oct 2004

Project Description

The proposed project is a credit line for up to €20 million in two tranches to BP to be on-lent by BP to private individuals in Romania as mortgage loans. The proceeds of the credit line will be used by BP to continue providing long-term financing to individuals for buying/constructing and/or repairing real estate properties (houses, flats, etc.). The sub-loans would be denominated in various currencies depending on customers' demand.

Transition Impact

Transition impact potential derives from the demonstration effect associated with supporting the growth of mortgage lending which is relatively new and currently rapidly growing in Romania. Development of a mortgage portfolio may also contribute to the development of financial markets by providing a source for possible long-term tradable securities (mortgage backed bonds, securitisation) in the future. Finally, further supporting the growth of BP and the diversification of its funding base will strengthen the banking sector by providing much needed long-term financing for individuals and thus increasing competition.

The Client

BP is one of the largest Romanian banks, with a 4 to 5% market share of total banking assets at end-2003. Total assets represented € 861.3 million, total equity € 115.9 million and net profit € 9.8 million (IAS) as of end-June 2004. BP is currently owned by Eurobank EFG (Greece) - 58.6% and GE Capital - 8.75%. At the same time, BP's employees and 5 Romanian private investment funds (SIFs) hold in total 33.6% of ownership.

EBRD Finance

A multi-currency loan for up to €20 million extended by the Bank to BP.

Project Cost

€20 million.

Environmental Impact

The environmental risks associated with the operation and the potential portfolio are low. BP is already implementing EBRD's environmental policy for local banks and EBRD’s environmental policy for mortgage loans. BP will need to ensure that property survey to be conducted for each loan as part of its due diligence. The survey should include consideration of potential site contamination, use/presence of hazardous materials in construction, risk of flooding, or seismic activity and compliance with the applicable national environmental, health and safety standards and regulations.

Technical Cooperation

None.

Company Contact

Ms. Maria Sultanoiu, Advisor to the President
Banc Post SA
Bucharest, Romania
Phone: +40 21 336 11 25
Fax: +40 21 336 11 25
E-mail: Maria.Sultanoiu@bancpost.com  
 

Business opportunities

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