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| BCC DPR/SME |
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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 | 26672 |
| Company name | Bank CenterCredit |
| Country | Kazakhstan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Approval |
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| Date SPI disclosed | June 13, 2008 |
| Projected board date | September 18, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project comprises financing of up to $115 million to support BCC’s SME lending business and its inaugural Diversified Payment Rights (DPR) securitization (together known as the project).
The financing will include:
- a senior loan of up to $40 million (the Loan) to be onlent to SMEs, and
- a participation of up to US$75 million in the Bank’s proposed DPR securitization.
IFC’s role and additionality in the proposed project is to provide long-term support which will enhance the stability of a well-managed Kazakh client at a time when the international markets are closed to Kazakhstan. |
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| Project sponsor and major shareholders of project company |
BCC is the sixth largest bank of Kazakhstan in terms of total assets, holding 7.2% of total banking system assets, and it is one of the oldest private banks to emerge from the former Soviet Union. BCC was founded by Mr. B.Bayseitov in 1988 as Almaty Central Cooperative Bank, “Center Bank” in 1997 it was re-registered into Bank CenterCredit.
BCC is a universal bank with a countrywide network of 20 full-service and 187 retail branches. Its extensive branch network enables a greater reach compared to other medium-sized Kazakh banks whose networks are generally concentrated in large cities. BCC provides a full range of banking services, including corporate banking, retail banking and trade finance. The primary focus of the Bank is SME and retail banking. BCC has a market share of approximately 11% in retail lending, 13% in SME lending and is the market leader in mortgage finance.
Currently BCC has a broad base of shareholders, including its founding directors and management who collectively have a controlling ownership of the Bank. The majority shareholder is Bakhytbek Bayseitov with a 51.1% stake. Other shareholders include the senior management of the Bank and domestic pension funds. In March 2008, Korean Kookmin Bank agreed to buy 30% of BCC’s shares with further increase of its stake to 50.1% or more in 2.5 years. |
| Total project cost and amount and nature of IFC's investment |
The total project cost is estimated at $115 million. The financing will include:
- a senior loan of up to $40 million for up to 7 years (2 year grace), and
- a participation of up to $75 million in the Bank’s proposed DPR securitization. |
| Location of project and description of site |
| BCC is headquartered in Almaty, Kazakhstan and has 20 full-service and 187 retail branches. |
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| Anticipated development impact of the project |
The successful implementation of this project will
- promote SME lending in the economy;
- develop financial intermediation by increasing the kind of products and services available in the market; and
- underpin the overall growth in the economy, as higher loan volumes will benefit customers, suppliers and new entrants. |
| IFC's expected development contribution |
| IFC financing will strengthen BCC’s balance sheet with term funding and liquidity and demonstrate market access through DPR securitization. |
| 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. While BCC is an existing client as this project will follow IFC's revised Environmental and Social Review Procedure IFC will analyze the bank's 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 Exclusion List 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 bank to manage social and environmental risks and to maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest supplemental actions to address any gaps in the bank's SEMS. Based on the review, the project will be required to:
- Upgrade if necessary, its existing 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
- Continue to 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: |
Ms. Dilyara Yermakova, Director, Financial Institutions
98 Panfilov Street, Almaty, 050000, Kazakhstan
+7 (727) 2 598 549
Email: dilyara.yermakova@centercredit.kz |
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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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