US$ 20 million subordinated facility to Citibank Kazakhstan to strengthen capitalisation of the bank and to allow it to extend its lending operations without exposure to foreign exchange risk.
The project aims to:
- increase supplementary (Tier II) capital of CK through subordination in order to maintain capital adequacy requirements;
- support further private sector credit operations and finance anticipated loan growth; and
- improve the range of products and services offered to clients in order to expand the deposit base of the bank.
By implementing the facility, the EBRD will enhance the supply of much-needed finance to the local private sector. A secondary benefit is that it will increase competitiveness in the country’s banking system.
Citibank Kazakhstan (CK) has been based in Kazakhstan since 1994 and was fully incorporated in 1998. The bank is 100 per cent owned by Citibank Overseas Investment Corporation (COIC) of the United States. CK is a fully licensed commercial bank. It has right to offer to its resident and non-resident clients a complete range of banking products for domestic and cross-border operations in both tenge and foreign currencies.
The loan will be subordinated to other creditors of CK and will have a maturity of six years. In accordance with the Basle Accord, the loan will be qualified as Tier 2 capital of CK.
US$ 20 million (€21 million).
CK will carry out its operations in accordance with the EBRD's Environmental Procedures for Local Banks. In implementing these procedures, CK will require its borrowers to comply, at a minimum, with national /local health, safety, environmental and public consultation requirements.
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