Bucharest, Romania, May 24, 2021—A new investment will help expand housing finance—with a focus on green housing—for the underserved in Romania, while strengthening the country's banking system and capital markets.
IFC is investing approximately $25 million equivalent in Romanian leu in senior non-preferred bonds placed by Banca Comercială Romana S.A. (BCR), a systemic bank in Romania. This is IFC's first investment in senior non-preferred bonds that are expected to qualify for the European Union's Minimum Requirement for own funds and Eligible Liabilities (MREL). It is also the largest ever local currency issuance in Romania. The proceeds from IFC's investment will go towards mortgages—with 40 percent allocated to green housing loans to help improve housing conditions in Romania.
"This successful bond issue is an example of our commitment to have recurrent actions that enhance the development of the Romanian capital market. We will continue this journey in the following years. I thank IFC for the commitment in supporting this bond issuance and for encouraging green housing loans, a valuable solution for building a sustainable residential future," said Sergiu Manea, CEO of Banca Comercială Romana. "Erste Group is aligned with the UN global set of commitments in the areas of environment, social engagement, and corporate governance (ESG), and through our green, sustainable financing activities, we are directing our efforts towards mitigating the negative impact of ESG risk factors."
The bonds will have features expected to ensure MREL-eligibility under the National Bank of Romania's application of the European Bank Recovery and Resolution Directive (BRRD) framework. As such, they will support BCR in achieving the targeted cushion for own funds and eligible liabilities and enhance the bank's stability as a systemic financial institution in Romania. The concept of MREL was introduced to increase banks' resilience and to ensure that banks have enough loss-absorbing and recapitalization capacity in case of a bail-in.
"Building on our past collaborations with BCR, we are aiming to improve access to finance in the underserved housing finance segment, with a particular emphasis on green mortgages," said Vittorio Di Bello, IFC's Regional Head of Industry for Financial Institutions in Europe and Central Asia. "Moreover, we are focused on bolstering the financial system and the broader economy as banks with these instruments in their balance sheet will be able to withstand a crisis without undermining their operations and role in the economy."
An IFC client since 2003, BCR is Romania's second-largest bank and a member of the ERSTE Group. In the past, IFC 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 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. 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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