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| Description of company and purpose of project |
| Privredna banka Zagreb (PBZ) is Croatia’s second largest commercial bank. PBZ used to be a state-owned bank and was privatized in 2000 when Gruppo Intesa of Italy acquired a controlling stake of 66.3%. Subsequently, in the second round of privatization in 2002, Gruppo Intesa increased its stake to 76.3% and the European Bank for Reconstruction and Development (EBRD) acquired an equity stake of 20.79%. PBZ is a full-fledged commercial bank and offers the full range of banking products to corporate and retail customers in Croatia. The proposed project aims to provide a long term loan facility to PBZ to enable it to enhance long term lending to its customers, particularly to retail mortgage customers and small enterprises. |
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| Project sponsor and major shareholders of project company |
| PBZ’s main sponsor is Gruppo Intesa of Italy which owns an equity stake of 76.3% in PBZ. Gruppo Intesa, a private sector corporation, is one of the largest European banks and has a strong multinational presence. It has total assets of EUR 260 billion and for the year ended December 31, 2003, it reported a Net Income of EUR 1.2 billion. The bank is a very strong and well-established one. The European Bank for Reconstruction and Development (EBRD) owns an equity stake of 20.79% in PBZ. |
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| Total project cost and proposed IFC investment |
| Total project size and IFC loan amount is expected to be EUR 50 million to EUR 100 million for IFC’s own account. |
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| Location of project and description of site |
| PBZ is headquartered in Zagreb and has branches across Croatia. Lending under this project could be made through out the country. |
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| Project Development Impact and IFC's Role |
This project will have the following developmental impacts:
- It will enhance the availability of long term credit to small enterprises in Croatia. Although they comprise a large segment of Croatia’s economy and employ a large proportion of its labor force, small enterprises still lack access to credit from the banking system in adequate amounts and maturities.
- It will enhance the availability of long term mortgages to the residential market, a segment which could be a key driver for economic growth.
- It will further strengthen the balance sheet of a strong and credible Croatian bank.
IFC’s role in this project is to
- provide long term credit that is otherwise not adequately available domestically, and
- strengthen its relationship with PBZ/Gruppo Intesa as part of a broader developmental role that IFC seeks to play in the region. |
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| Environmental and social issues - Category FI-1 |
This is a category FI, type 1 project according to IFC's environmental and social project review procedure. As a result of an earlier EBRD investment, PBZ has developed and is implementing an acceptable Environmental Management System (EMS). The EMS requires PBZ and their clients to comply with Croatian environmental, health and safety requirements. PBZ has also committed to send two of their environment staff to IFC's new 5 day Competitive Business Advantage (CBA) Workshop to upgrade their skills. Finally PBZ will provide Annual Monitoring Reports (AMR) to IFC (in the same format as used to report to EBRD) to ensure their is ongoing compliance to the approved EMS.
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| To contact the project company, please write to: |
rraman@ifc.org
Investment Officer
International Finance Corporation |
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