The original project was the acquisition by the Bank of an equity stake of 10% plus one share in Banca Romaneasca (“BROM”) alongside National Bank of Greece (“NBG”), the strategic investor.
The proposed project is for the subscription of newly issued shares of BROM as part of a capital increase to take place in December 2005, to allow the EBRD to retain its 10% stake. Such capital increase will strengthen BROM’s capital base allowing further growth of the bank’s business and compliance with National Bank of Romania (“NBR”) regulations.
The transition impact of the partnership with NBG in the acquisition of BROM come from:
Institution building through the transfer of EBRD’s experience in transforming banks together with strategic investors into modern, efficient and well governed banks;
Enhancement of competition in the SME and retail segments of the banking market by facilitating BROM’s access to long-term financing; and
Assistance with the development of the SME strategy and business plan as an important element for improving BROM’s market position.
BROM is a medium size Romanian bank, with a 1.5% share of total banking assets as at end of June 2005. Total assets represented €507 million, total equity €58 million and net profit €2.1 million (IFRS) as at end of June 2005. BROM is owned by NBG – 87.1%, EBRD – 10.0%, and approximately 170 Romanian private shareholders – 2.9%.
NBG (Moody’s: A2; S&P: BBB+) is the largest Greek bank with total assets of €48 billion and equity of €2.7 billion as at year-end 2004.
Subscription of newly issued shares of BROM for an aggregate amount of up €7 million as part of a capital increase to take place in December 2005.
To be confirmed following the closing of the transaction.
BROM will be required to adopt and implement EBRD’s “Environmental Procedures for Intermediated Lending through Local Banks” across all of its operations. BROM will also be required to adhere to the Bank’s Environmental Exclusion List and clients of BROM should comply, at a minimum, with national requirements for environmental health and safety. On an annual basis BROM will provide the Bank with an annual environmental report on environment, health and safety issues associated with its operations and portfolio.
Banca Romaneasca S.A.
35, Unirii Blvd, sector 3
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