Bucharest, Romania, November 8, 2021—A new investment will help expand green housing finance in Romania while bolstering the country's banking system and capital markets, with IFC investing Romanian Leu 95 million (approximately $22 million) in senior preferred green bonds issued by Banca Comercială Romana S.A. (BCR).
This placement is the first-ever senior preferred bond issuance by BCR, Romania's second-largest bank. The bonds qualify for the European Union's Minimum Requirement for own funds and Eligible Liabilities (MREL) one of the key tools to enhance banks' resolvability. This is also BCR's first issuance of green bonds under the Erste Group's Sustainability Framework. An umbrella framework, it will allow Erste Group to issue sustainable finance instruments to finance or refinance projects with environmental and/or social benefits. The proceeds from IFC's investment will support green mortgages, helping improve housing conditions in Romania.
In May, IFC invested Romanian Leu 99.5 million (approximately $25 million) in BCR's senior non-preferred bonds to finance mortgages, with 40 percent of its proceeds allocated to green housing.
"While we are committed to an integrated responsible business approach in offering solutions to our clients, we also engage in constant dialogue with Romanian entrepreneurs. This is where the sustainable transformation of the economy starts and we are here to support a conducive business environment with all necessary information for sustainable development, offering them suitable structures and fitting financing sources," said Sergiu Manea, CEO of Banca Comercială Română.
The bonds count as part of the bank's MREL-eligible liabilities under the Bank Recovery and Resolution Directive framework—introduced by the European Commission in 2016 and enforced by the National Bank of Romania—to ensure a well-planned, orderly recovery and resolution of systematically important banks in case of a bail-in.
"We are expanding our collaboration with BCR to increase access to finance for green mortgages in Romania, helping tackle climate change," said Vittorio Di Bello, IFC's Regional Head of Industry for Financial Institutions in Europe. "In alignment with our investment in BCR's bonds last May, this current investment is also aimed at further strengthening the bank's resilience while supporting Romania's climate targets."
An IFC client since 2003, BCR is a member of the Erste Group. In the past, IFC has partnered with BCR to support on-lending to SMEs and agribusiness financing.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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About Banca Comercială Romana
Banca Comercială Romana (BCR), a member of Erste Group, is the most important financial group in Romania, including operations of universal bank (retail, corporate & investment banking, treasury and capital markets), as well as specialized companies on the leasing market, private pensions, housing banks, and banking services. BCR provides a full range of financial products and services through a network of 18 business centers and 16 mobile offices dedicated to companies, and 370 retail units located in most cities across the country with over 10,000 inhabitants. For more information, visit www.bcr.ro
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