Ukraine Subordinated Credit Facility to JSCB OTP Bank



Project number:


Business sector:

Financial institutions

Notice type:


Environmental category:


Approval date:

30 Nov 1999



PSD disclosed:

24 Jan 2000

Project Description

US$ 10 million subordinated facility to Raiffeisen Bank Ukraine will strengthen capitalisation of the Ukrainian bank and allow it to extend its lending operations without exposure to foreign exchange risk.

The project aims to:

  • increase supplementary (Tier II) capital of RBU 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 the clients in order to expand the deposit base of the bank.

Transition Impact

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.

The Client

Raiffeisen Bank Ukraine (RBU) is a 100 per cent owned subsidiary of Raiffeisen Group (Vienna). The bank is initially concentrating on short-term structured trade finance and payment services for its international and regional clientele. The bank is also strengthening its presence by acquiring wider local clientele and increasing the proportion of finance to premier local businesses. As part of the extensive regional network of the parent bank, RBU is positioned to benefit from the growth in interregional trade as many central European companies start to resume old links with Ukraine disrupted over the past few years.

EBRD Finance

The loan will be subordinated to other creditors of RBU and will have a maturity of seven years. In accordance with the Basle Accord, part of the loan (around US$ 5 million) will be qualified as Tier 2 capital of RBU. The remaining part will be disbursed against credit applications to finance sub-projects selected in accordance with standard EBRD criteria.

Project Cost

US$ 10 million (EUR 9.9 million).

Environmental Impact

RBU will carry out its operations in accordance with the EBRD's Environmental Procedures for Local Banks. In implementing these procedures, RBU will require its borrowers to comply, at a minimum, with national /local health, safety, environmental and public consultation requirements.

Technical Cooperation



Business opportunities

For business opportunities or procurement, contact the client company.

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