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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 | 24559 |
| Project name | BCR |
| Country | Romania |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Banca Comerciala Romana S. A. |
| Environmental category | FI-1 |
| Date SPI disclosed | September 19, 2005 |
| Projected board date | October 18, 2005 |
| Status | Active |
| Previous Events | Invested: December 22, 2005
Signed: December 7, 2005
Approved: November 17, 2005 |
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| Description of company and purpose of project |
The project consists of a senior loan of up to EUR75 million to Banca Comerciala Romana SA (BCR or the bank). The Loan will be used to support the Bank’s long-term funding activities and prudently manage its balance sheet by enabling it to address maturity mismatches between long-term currency assets and short-term currency liabilities, and release the necessary funding to support the growth and expansion of Romanian private sector entities.
The proposed loan is being processed in parallel with BCR’s on-going privatization which is expected to be completed by the end of FY 2005.
BCR was incorporated in 1990 as a spin-off of the National Bank of Romania, which carried out the majority of banking activities in Romania during the former communist regime. Five newly-established state-owned banks were created according to customer profile, similar to other bank restructurings in former communist regime countries. The clients transferred to BCR comprised mainly the country’s largest state-owned industrial companies. Over the last decade, however, the Bank’s customer base has moved away from the state-owned corporate sector to private enterprises and individuals.
BCR is the largest bank in Romania in terms of assets (US$9.2 billion as of June 30, 2005) and customer base (5 million clients). It operates as a full-fledged commercial bank, with a focus on expanding its business with small and medium-sized enterprises. As at the end of March 2005, the Bank’s market share accounted for 26% of banking assets. |
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| Project sponsor and major shareholders of project company |
| The bank is 36.88%-owned by the Government via the Assets Recovery Agency (AVAS). Five financial investment companies (SIFs), previously called Private Ownership Funds, were created as tools for assisting the mass privatization process following the breakdown of the former communist regime. They control another 30.12%. The SIFs are organized on a regional basis, each fund receiving the state enterprises located in its area as well as some specific industries (financial institutions were evenly distributed among the five funds). Individuals were given privatization vouchers which they exchanged for shares in the SIFs, which are listed on the Bucharest Stock Exchange. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment is a EUR 75 million A loan for IFC’s account. |
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| Location of project and description of site |
| BCR is headquartered in Bucharest, Romania. The bank has a comprehensive nationwide branch network of 339 outlets, employing more than 12,000 individuals. |
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| Project Development Impact and IFC's Role |
By providing the proposed loan, IFC will help expand a reputable bank in Romania and as a result participate in a concerted effort to strengthen the local banking sector through balance sheet strengthening and institution-building. It will also augment the positive impact of increased access to term lending by the growing base of local entrepreneurs through a Romanian bank that is strongly oriented to corporate and retail businesses. Environmental standards, quality assurance, and efficiency should also improve as these companies seek to become competitive prior to EU accession.
Moreover, IFC will play a potentially important strategic role in strengthening and adding value to the Bank before the planned sale to a strategic investor. |
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| Environmental and social issues - Category FI-1 |
This is an FI Type 1 project according to IFC's environmental and social review procedure. Under previous investments by IFC, the Bank has implemented an Environmental Management System (EMS), which mandates compliance by corporate and SME borrowers with Romanian environmental, health and safety standards. The EMS was elaborated taking into consideration IFC's social and environmental standards and the relevant IFC exclusion list. A technical assistance program to enhance BCR's capacity to manage environmental and social issues is being funded by IFC's Sustainable Financial Markets Facility. The bank has been submitting Annual Environmental Performance Reports (AEPRs). BCR will be required to maintain its EMS and continue providing AEPRs for the duration of this new investment.
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| To contact the project company, please write to: |
Banca Comerciala Romana
B-dul Elisabeta, No. 5
Bucarest 030016
Romania |
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