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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 10519 |
| Project name | Vseobecna uverova banca, a.s. |
| Country | Slovakia |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Vseobecna uverova banka, a.s. |
| Environmental category | FI |
| Date SPI disclosed | October 20, 2000 |
| Projected board date | November 30, 2000 |
| Status | Completed |
| Previous Events | Invested: May 8, 2001
Signed: February 9, 2001
Approved: December 21, 2000 |
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| Project sponsor and major shareholders of project company |
The subject of a possible IFC equity investment is Vseobecna Uverova Banka ("VUB", "the Bank") which with assets of approximately SKK 160 billion (approximately US$3.5 billion) as of June 2000, is the second largest Slovak bank. VUB is currently 84.6% owned by the Slovak Republic. Although listed on the Bratislava exchange, less than 2% of the Bank's shares are currently owned by individual investors and the balance of shares are owned by private and state-owned corporates. The Slovak Ministry of Finance is preparing to privatize the bank by divesting the Slovak Republic's shareholding in VUB to a strategic investor. The precursor stage is expected to include the sale of a minority interest to one or two multilateral development banks, possibly to include IFC, in order to facilitate its privatization.
VUB was created in 1990 as a state-owned, commercial bank successor to the State Bank, operating in the Slovak Republic of the former Czechoslovak Federative Republic (CSFR). A small tranche of VUB shares was included in the CSFR's voucher privatization scheme as a result of which shares were sold in both its constituent republics. |
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| Total project cost and proposed IFC investment |
| The size of the proposed IFC investment in VUB is under discussion with the Government of the Slovak Republic. |
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| Location of project and description of site |
| VUB's headquarters are located at Mlynske nivy 1 in Bratislava, Slovak Republic. However, the bank operates across the country and serves approximately 1.1 million retail and 85,000 corporate customers via 236 branches and sub-branches as well as 313 ATMs across Slovakia, and also has one branch in Prague, one sub-branch in Brno, Czech Republic, and a representative office in Moscow, London, and Shanghai (figures as of June 30, 2000). Substantially, all of VUB's portfolio, other assets, and on-going operations are located in the Slovak Republic. |
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| Description of company and purpose of project |
The Government of Slovakia seeks to improve VUB's performance and secure its future through its sale to an experienced and well capitalized international bank ("Strategic Investor"), thereby indirectly helping the overall development of the financial sector, which must be strengthened to support the country's continuing transition to a market economy.
The Government of Slovakia and its advisors consider that a pre-privatization investment by a multilateral development bank (MDB) will contribute to a speedier and more successful sale of VUB to a Strategic Investor. An IFC investment in VUB would support the Bank's efforts to improve transparency and corporate governance.
Support for VUB would be consistent with both IFC's and the World Bank's strategy for the Slovak Republic. IFC's objectives in the Slovak Republic include catalyzing foreign investment that will contribute institutional know-how and strengthen the financial sector. IFC's assistance in the state's divestment of VUB to a Strategic Investor also complements the World Bank's activities in Slovakia. The central operation of the World Bank's envisaged lending program for Slovakia is an Enterprise and Financial Sector Adjustment Loan which, if approved, would support the Government's financial sector restructuring and privatization program. |
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| Environmental and social issues - Category FI |
This is a category FI Type 1 project according to IFC’s environmental and social review procedure. VUB will be required to establish an environmental management system for its corporate lending operations to ensure that the activities and enterprises it finances comply with Slovak environmental and occupational health & safety requirements. VUB must appoint a senior officer with overall responsibility for environmental issues and a second person to act as Environmental Coordinator, and both persons should attend IFC’s environmental training course for financial intermediaries. VUB must submit a written description of its environmental management system for review and comment, and thereafter must submit environmental performance reports to IFC on an annual basis.
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| To contact the project company, please write to: |
Privatization Advisor to the Slovak Republic:
J.P. Morgan
PO Box 161
60 Victoria Embankment
London EC4Y 0JP
United Kingdom
Attention of: Alexander Fraser, Vice President |
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