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| Seker Bank |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. Board dates are estimates only. |
| Project number | 23938 |
| Company name | Sekerbank T.A.S. |
| Country | Turkey |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | May 18, 2007 |
| Projected board date | June 18, 2007 |
| Previous Events | Invested: November 19, 2007
Signed: November 14, 2007
Approved: October 24, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed investment consists of:
- EUR18 million subordinated loan to support microfinance downscaling which would qualify as Tier II capital for 10 years (5 year grace) and
- EUR18 million senior loan to support Sekerbank’s SME lending operations for up to 7 years (2 year grace). |
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| Project sponsor and major shareholders of project company |
The Bank was founded as the “Sugar Beet Cooperative Bank” in 1953, pooling the modest savings of the sugar beet growers who belonged to the cooperatives. Currently, Sekerbank is a public company (approximately 30% free float on the Istanbul exchange) with the remainder owned 50/50 by the employee pension fund and Kazakhstan's Turan Alem Securities JSC, a wholly owned subsidiary of Bank Turan Alem (BTA). The Bank has 214 branches in Turkey including rural areas in the central and eastern part of Turkey.
The current shareholder structure is Seker Bank Personnel Social Security Foundation (33.98%), Turan Alem Securities JSC (33.98%), beetroot cooperatives (2.01%) and the public (30.03%).
Turan Alem Securities JSC is owned by Bank Turan Alem (or “BTA”). BTA is the second largest bank in Kazakhstan in terms of assets and equity. BTA’s assets represent about 22% of the total assets of the Kazakh banking sector. Privatized and merged from 2 state-owned banks in 1998, BTA is now about 11% owned by a group of international financial institutions, including IFC, EBRD, FMO, and East Capital, an international equity fund, which has recently bought its stake from RZB. BTA issued issued the first RMBS in Kazakhstan in February 2007 with an amount of $153.6 million. |
| Total project cost and amount and nature of IFC's investment |
The total project cost is estimated at Euro 36 million. The proposed investment consists of:
- EUR18 million subordinated loan which would qualify as Tier II capital for 10 years (5 year grace) and
- EUR18 million senior loan for up to 7 years (2 year grace) |
| Location of project and description of site |
| Sekerbank is headquartered in Istanbul, Turkey and has 214 branches. |
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| Anticipated development impact of the project |
| The developmental impact of Sekerbank’s down-scaling program is expected to be high and far reaching in terms of its economic support for productive micro enterprises, stimulus for employment generation and confidence building for the Turkish financial sector. Microfinance in Turkey is in its early stages and there is significant opportunity for portfolio growth in this underserved sector. In Turkey, there are about 3.2 million informal micro and small businesses operating in sectors that represent about 40% of the workforce and about 15% of the country’s GDP. This project is expected to reach an estimated 150,000 micro entrepreneurs during the tenor of the Financing Package through Sekerbank’s 214 branch office network located throughout Turkey. |
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| IFC's expected development contribution |
| IFC’s subordinated loan will strengthen the capital base of the Bank and enable the Bank to launch its microfinance lending program. Also, IFC’s A-loan will enable the Bank to fund its expansion in the growing SME sector of the Turkish economy through increasing its lending capacity. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC will analyze the FI portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:
- The IFC FI and/or Microfinance Exclusion List(s) and/or
- The applicable National Social and Environmental Laws and regulations and/or
- The IFC Performance Standards
IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.
Based on the review, the project will be required to:
- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC
- Identify responsible, qualified persons to manage and implement the SEMS
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements
- Submit a periodic report to IFC as per a format to be provided by IFC |
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| For inquiries about the project, contact: |
Mr. Zeki Onder, EVP, Sekerbank International Division
Buyukdere Cad. No:171 Metrocity K:12
Levent 34330
Istanbul, Turkey
Tel:+90-212-344 0737
Fax: +90-212-319 7162
Email: zeki.onder@sekerbank.com.tr
www.sekerbank.com.tr
Environmental documents will be located at the following location:
Sekerbank T.A.S. Headquarters in Levent-Istanbul, Turkey. |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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