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| DYCCB |
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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 | 28135 |
| Company name | Deyang City Commercial Bank |
| Country | China |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | May 7, 2009 |
| Projected board date | June 8, 2009 |
| Previous Events | Signed: September 30, 2009
Approved: September 17, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project is an equity investment in Deyang City Commercial Bank (“DYCCB”, the “Bank”) to acquire 10% - 20% stake. The objectives are to strengthen the Bank’s capital base, introduce international best practice to the Bank and support the Bank in implementing its strategy. Moreover, IFC’s investment will support SMEs in Deyang area directly hit by or adversely affected by the earthquake in Sichuan Province.
DYCCB was founded in 1998 through the consolidation of 8 credit cooperatives. The Bank positions itself as an SME bank rooted in local economy and has achieved sound development in the past several years. As of December 31, 2008, total assets amount to $1.9 billion equivalent with a gross loan portfolio of $970 million equivalent. Loans to SMEs account for over 80% of the Bank’s portfolio. |
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| Project sponsor and major shareholders of project company |
| The current shareholders consist of local government background entities (56.82%), private sector (33.66%) and individual shareholders (9.52%). As the largest shareholder, Deyang State-owned Asset Management Co. holds 51.16% stake. A number of prominent local private enterprises or SOEs own about 5% stake each. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is an equity investment for IFC’s own account to acquire 10% to 20% stake in DYCCB. |
| Location of project and description of site |
| DYCCB is located in Deyang, a second-tier city in Sichuan Province. Deyang is 50 kilometers north to Chengdu, the capital city of Sichuan Province. Several cities and counties in Deyang were among the hardest hit cities during last year’s earthquake. |
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| Anticipated development impact of the project |
| The project will have a strong development impact by demonstrating IFC’s commitment in supporting the reform and restructuring of China’s banking system as well as post-disaster reconstruction. IFC’s investment will assist the Bank to expand its SME loan portfolio to reach clients in disaster-affected area, thus supporting employment generation, livelihood improvement and private sector growth. |
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| IFC's expected development contribution |
| In addition to the proposed equity investment, IFC will also provide advisory services to DYCCB to help improve its institutional capability. |
| 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 Exclusion List
- 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. Xu Zuoxun
No. 14, Mengshan Street
Deyang, 618000, China
Telephone: 86-838-6821182
Fax: 86-838-2376183
E-mail: xzx_58@163.com
Website: http://www.dyccb.com |
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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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