BANCA COMERCIALA ROMANA MORTGAGE LOAN

Location:

Romania

Project number:

29023

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

05 Nov 2002

Status:

Completed

PSD disclosed:

16 Sep 2002

Project Description

A proposed senior loan to Banca Comerciala Romana (BCR), the largest commercial bank of Romania, to support enhancement of long-term lending to individuals and domestic private companies for real estate investment purposes. This project is additional to BCR SME Facility, which has been implemented by BCR since January 2001.
The proceeds of the credit line would be used by BCR to provide long-term financing to individuals or legal entities, for buying/ constructing and/or repairing real estate properties (houses, offices, flats and the like). The sub-loans would be in Lei and/or other type of lending.
 

Transition Impact

Transition impact potential derives from the demonstration effect associated with supporting the growth of mortgage lending which is relatively new and currently underdeveloped in Romania. Development of a mortgage market would also contribute to the development of financial markets by providing possible long-term tradable securities in the future. Supporting the growth of BCR and the diversification of its funding base will strengthen the banking sector by providing much-needed long-term financing for individual and private domestic legal entities and increasing competition.

The Client

BCR is the largest Romanian bank, with a 31% market share of total banking assets at end-2001, total assets of some USD 3.7 billion, total equity of some USD 709 million and net profit of some USD 130 million (IAS). BCR is currently owned by the Romanian state (represented through APAPS) for 70% and by 5 Romanian private investment funds (SIFs) with a total shareholding of 30%. BCR is currently under privatisation with a deadline of July 2003.

EBRD Finance

Up to €50 million credit line in three tranches to BCR to be on-lent by BCR to private individuals and legal entities as mortgage loans.

Project Cost

€50 million.

Environmental Impact

The environmental impact from the project will be low as the borrower is committed to comply with the financing restrictions stated on EBRD’s Environmental Exclusion List for Financial Institutions as well as with EBRD’s Environmental procedures for Intermediate Financing through Local Banks.

Technical Cooperation

None.

Company Contact

 

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