IFC Supports Croatian Home Buyers with Euro 20 Million Loan to Leading Mortgage Finance Company
Afshin Molavi
Phone:(202) 458-5674
Fax:(202) 974-4384
E-mail: amolavi@ifc.org
Washington, DC, September 3, 2002—The
International Finance Corporation (IFC), the private sector development
arm of the World Bank Group, will support Croatian home buyers with a EUR
20 million loan to Erste & Steiermarkische Bank d. d. (ESB), a leader
in Croatian mortgage finance.
As part of the agreement signed on September 3, IFC will provide a ten-year
line of credit to ESB which will enable the company to originate residential
mortgage loans, thus deepening the mortgage market and offering new opportunities
for home buyers. This new financing represents IFC’s entry into
the Croatian mortgage finance market, a crucial building block of the Croatian
financial sector.
IFC Director of Southern Europe and Central Asia, Khosrow Zamani, who is
currently visiting Zagreb, said: “We are delighted to deepen our cooperation
with Erste & Steiermarkische Bank through this new financing. We
feel ESB’s expertise in the Croatian mortgage market combined with IFC’s
broad experience in this sector in emerging markets will hasten the development
of the Croatian mortgage finance market, making finance more readily available
to individuals.”
The financing follows IFC’s EUR 16 million credit line in 1999 to support
ESB’s lending to small-and medium-sized enterprises.
Erste & Steiermarkische Bank d.d. was formed in September 2000 through
the merger of three highly successful Croatian regional banks with a long
track record and experience in the local market. The bank has already
established itself as one of the leading foreign banks in the market and
has ambitious growth plans. Erste & Steiermarkische Bank d.d.
combines in-depth knowledge of the Croatian market with the financial strength
and expertise of its strategic shareholders and two of the leading banks
in Austria and Central Europe: Erste Bank der Oesterreichischen Sparkassen
AG and the Steiermarkische Bank und Sparkassen AG who jointly hold 83 percent
of the share capital of Erste & Steiermarkische Bank d.d.
After signing the Agreement, Tomislav Vuic, the president of the ESB management
board, said: “We are pleased by the vote of confidence IFC has displayed
in our company through this investment. Erste & Steiermarkische
Bank has created significant business growth in the field of housing credit
lines. Therefore, the approved financial support will help us further
expand our growth in this market while providing new opportunities for
young people to become homeowners. As part of our strategy, we continue
to seek out new products and services that will attract Croatia’s considerable
youth demand for banking services, while continuing to effectively serve
our present clients.”
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, and provides technical assistance
and advice to governments and businesses. Since its founding in 1956
through the close of the last fiscal year on June 30, 2002, IFC committed
more than $34 billion of its own funds and arranged $21 billion in syndications
for 2,825 companies in 140 developing countries. IFC’s committed
portfolio at the end of FY02 was $15.1 billion for our own account and
$6.5 billion held for participants in loan syndications.
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