TOKYO, JAPAN, March 3, 1999 --- Mr. James D. Wolfensohn, President of the World Bank Group, used the occasion of signing an IFC loan to emphasize the importance of IFC's financing at a time when the Asian crisis has limited the Philippine banking sector's access to the international capital markets.
IFC has responded to new priorities created by the financial crisis with help for Asian companies that will give them new standards of corporate governance as well as balance sheet assistance to help them restructure.
The signing of the US$45 million loan to Far East Bank & Trust Company (FEB) of the Philippines was held on March 2 at the Tokyo headquarters of Sakura Bank, which is FEB's largest shareholder with a 26 percent stake. FEB is the fourth largest private commercial bank in the Philippines and was represented at the signing by Mr. Octavio V. Espiritu, President.
IFC's financing will assist FEB to strengthen its balance sheet and adopt best banking practices, providing a model for other Philippine banks. In addition, IFC is helping FEB to improve corporate governance by appointing an international advisor to its board of directors.
IFC's relationship with FEB began in September 1997 through the commitment of a $75 million credit line – comprising a $25 million loan for IFC's own account and a $50 million loan for the account of participants, both of which are now fully disbursed. In 1998, IFC invested $15 million equity in FEB, making IFC one of the 10 largest shareholders in the bank.
Since March 1998, FEB has been involved in a two-year technical assistance program with Asia Commercial Bank (ACB) in Vietnam. The program is managed by IFC and funded by the Government of Japan through its trust fund with IFC. Under the program, FEB is training ACB staff and this partnership has already created one of Vietnam's first banking training manuals.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
