Uniastrum

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	24780
Company name	Uniastrum Bank
Country	Russian Federation
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Pending Signing

Date SPI disclosed	November 13, 2007
Projected board date	December 13, 2007
Previous Events	Approved: December 20, 2007

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The project is to provide an approximately $60 million financing package to Uniastrum Bank (the Bank), a medium-sized Moscow-based bank with retail, including mortgages, and SME lending being its core business. The institution has a well-developed and still growing regional retail network, strong position in the SME lending market, and a rapidly developing mortgages business, particularly in the Russian regions. Uniastrum Bank is ranked 46th (as of end-June 2007) in the Russian banking sector by total assets - according to RBC rating. The proposed IFC financing would support the Bank’s strategy and assist in its expansion, as well as strengthen the Bank’s capabilities in certain product areas.

Anticipated development impact of the project

IFC’s investment in Uniastrum Bank will have a strong developmental impact as it will support the strategy of a medium-sized independent private Russian bank with a strong presence outside Moscow. With IFC’s assistance, the Bank will be able to expand its lending operations and further develop its SME, retail and mortgage products, including in the Russian regions, thereby making these products available to a broader segment of the Russian population.

IFC's expected development contribution

IFC’s involvement will improve the Bank’s funding profile and strengthen its capital base, thereby enabling it to further develop and expand its loan products, particularly in the area of mortgage lending. Furthermore, IFC’s involvement will support important corporate initiatives (e.g., in the areas of governance and risk management) which will result in strengthened operational profile.

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 Bank's portfolio, 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 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 Bank will be required to:

- Develop an, or upgrade, if necessary, any 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 are in compliance with the Applicable Performance Requirements; and
- Submit a periodic report to IFC as per a format to be provided by IFC.

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