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| Summary of Project Information (SPI) |
| This Summary of Project Information 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. |
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| Project number | 23939 |
| Project name | Raiffeisenbank Bosnia |
| Country | Bosnia and Herzegovina |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Raiffeisen Bank d.d. Bosnia and Herzegovina |
| Environmental category | FI-2 |
| Date SPI disclosed | February 25, 2005 |
| Projected board date | March 30, 2005 |
| Status | Active |
| Previous Events | Invested: August 9, 2005
Signed: May 26, 2005
Approved: May 19, 2005 |
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| Description of company and purpose of project |
| The proposed project consists of a long term loan of up to EUR12 million to Raiffeisen Bank D.D. Bosnia and Herzegovina (“RBBH” or the “Bank”). RBBH is the largest bank in Bosnia and Herzegovina (“BiH”), with total equity of EUR67 million and total assets of EUR1billion, representing (21% of the market share) as at end-2004. RBBH is considered the leading bank in BiH offering a wide range of financial services, including corporate, personal and investment banking. The Bank’s main strategic goal is to consolidate its leading position in the market by establishing long-term, mutual beneficial cooperation with its corporate and retail customers and by providing high quality comprehensive client services based on advanced banking technology and professional management. The proposed project aims at providing much needed long term financing to support the growth of RBBH’s housing lending program. RBBH started its housing lending program in June 1998 and is now the leading provider of mortgage loans in BiH. |
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| Project sponsor and major shareholders of project company |
| 96.7% of the Bank is currently owned by Raiffeisen Zentralbank Austria (“RZB”) through its holding subsidiary Raiffeisen International Bank-Holding (“RI”). RZB was created in 1898 as the central bank to Austria’s Raiffeisen banks (rural credit co-operatives), but it also acts as a commercial bank and in some countries as an investment bank. With assets of close to EUR63 billion and 25% of market share in Austrian retail deposits, it is currently Austria’s 3rd largest banking group (after Erste Bank and Bank of Austria/ Credit Anstalt). RZB is 87% owned by nine regional Raiffeisen Banks. These regional banks are owned by 586 local Raiffesen Banks, which in turn are owned by 1.7 million co-operative members or clients. Currently, RZB owns and operates 15 Network Banks (“NWBs”) in Central and Eastern Europe. RZB is A1 rated by Moody’s. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment consists of a long term loan for up to EUR12 million for its own account. |
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| Location of project and description of site |
| RBBH is headquartered in Sarajevo. |
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| Project Development Impact and IFC's Role |
Development Impact:
The project is expected to have a significant development impact in Bosnia and Herzegovina in the following ways:
- Supporting the nascent housing market: IFC funding will boost the Bank's capacity to provide term loans to the housing sector and will thus support the development of this sector in BiH.
- Improving financial infrastructure/strengthening of a financial institution: In the proposed transaction, IFC will play an important role in reconfirming RBBH’s dominant position in the market by providing it with a long-term loan and strengthening its competitive advantage in the Bosnian banking sector.
- Extending finance to underserved individual borrowers: By directing the proceeds of the IFC Loan to individual borrowers, the project will meet the growing demand for housing finance in BiH.
IFC Role:
IFC role in this project is summarized below:
- Accessing long term financing: The project will help a local intermediary to develop and strengthen its lending operations. Currently RBBH would be unable to obtain a loan of comparable tenor from the market. IFC’s provision of such long-term credit line will further stabilize, diversify and extend the maturity of the Bank’s funding base, which would allow RBBH to extend the tenor of the housing loans, an area of much needed attention in BiH.
- Demonstration effect: By continuing to support RBBH, IFC will signal its strong support for BiH’s private banking sector. |
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| Environmental and social issues - Category FI-2 |
This is an FI Type 2 project to IFC’s environmental and social review procedure. As part of a previous investment by IFC and EBRD, RBBH established an environmental management system (EMS) that covers relevant operations. For the proposed new investment by IFC, RBBH will be required to confirm that it will maintain its EMS for the duration of the new investment to ensure that its relevant operations meet BiH and applicable IFC environmental and social requirements.
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| To contact the project company, please write to: |
Mrs. Snjezana Tolic
Head of Treasury and Financial Markets Division
Raiffeisen Bank dd Bosna i Hercegovina
Danijela Ozma 3, 71000 Sarajevo, BiH
Tel: +387 33 277 108
Fax: +387 33 213 851 |
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