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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 | 20585 |
| Project name | ETF -Citibank |
| Country | Egypt |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | CITIBANK |
| Environmental category | C |
| Date SPI disclosed | March 31, 2003 |
| Projected board date | April 30, 2003 |
| Status | Completed |
| Previous Events | Signed: June 4, 2003
Approved: May 8, 2003 |
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| Description of company and purpose of project |
The project involves the establishment of a two year $60 million revolving trade facility in Egypt with Citibank N.A, Egypt (Citibank Egypt) to guarantee documentary letters of credit (L/Cs) originated by selected public and private sector commercial banks in Egypt. This facility will allow Citibank Egypt to increase the amount of trade lines offered to the participating banks and enhance the level of cross border exposure Citibank can maintain in Egypt. The facility will be structured as 50-50 risk guarantee between IFC and Citibank Egypt whereby IFC would guarantee 50% of the exposure up to a maximum of $30 million, of the confirming bank (Citibank Egypt). The five banks selected for participating in this facility are; Banque Misr, Misr International Bank, National Bank of Egypt, Export Development Bank of Egypt and Egyptian American Bank.
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| Project sponsor and major shareholders of project company |
In FY 2002, Citigroup N.A. recorded a net income of over $15 billion, with a return on common equity of over 18%. Over the same period Citigroup’s net income from its Global Retail banking operations was over $3.2 billion. Citigroup is assigned a “AA-” rating by Standard & Poors, “Aa1” by Moodys and “AA+” by Fitch.
Citibank’s presence in North Africa spans Egypt, Algeria, Tunisia and Morocco. The branch in Egypt, which will administer this facility, falls under the regional umbrella of Central Eastern Europe, Middle East and Africa (CEEMEA) and is managed out of Citibank’s offices in London.
Citibank’s branch in Egypt (opened in 1955) was the first branch office of a U.S. Commercial bank in the Middle East. Today the bank offers its clients a full range of banking services including Corporate Finance, Treasury, Custody, Cash Management and Trade for large corporations.
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| Total project cost and proposed IFC investment |
The total facility size will be $60 million of which IFC’s share will be 50% of the guarantees provided by Citibank to the participating banks. At no time will IFC’s combined exposure to these banks exceed $30 million.
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| Location of project and description of site |
| The proposed trade facility, which will be managed by Citibank Egypt, will be headquartered in Cairo. |
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| Project Development Impact and IFC's Role |
Foreign investment in Egypt has declined over the past few years due to the slow introduction of measures for economic restructuring. Through the facility, IFC will play a catalytic role in supporting local private sector businesses by broadening the availability of short-term trade finance, by making additional finance available from its own resources as well as from the resources of the Citibank. In particular, the facility will help Egyptian exporters to import much needed raw materials and other inputs.
IFC will play a catalytic role through risk mitigation and credit enhancement. IFC also has a role in increasing the availability and tenor of trade finance to private sector Egyptian businesses, while helping to leverage Citibank’s existing country limits to Egypt.
Through its participation in the project, IFC will continue to promote confidence in Egypt’s commercial banking sector.
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| Environmental and social issues - Category C |
This is a category C project according to IFC’s environmental review procedure. No further environmental review is required.
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| To contact the project company, please write to: |
Iman T. Ismail
Vice President, Global Corporate Investment Banking
Citibank N.A. Egypt
8 Ahmed Pasha Street
Garden City
Cairo, Egypt
Phone: (20-2) 791-3553, (20-2) 795-1873/77
Fax: (20-2) 795-8056 |
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