WASHINGTON, D.C., June 19, 1998 --- The International Finance Corporation and Deutsche Investitions-und Entwicklungsgesellschaft (DEG) will each invest US$6.5 million for a 10 percent stake each in the First Ukrainian International Bank (FUIB). IFC is also negotiating with FUIB to provide a loan of up to US$10 million to the bank. The financing will support FUIB’s development and growth, including expansion of its operations and lending.
This investment is IFC’s first in a Ukrainian enterprise, and part of IFC’s strategy of strengthening the Ukrainian financial sector by fostering the development of well-managed financial institutions. To date, IFC has approved four investments totaling US$27.3 million in Ukraine’s financial market infrastructure, including three banks and one venture capital fund.
According to Ms. Mary Ellen Iskenderian, IFC’s Manager of Capital Markets for the region, this investment is a signal of IFC confidence in the management of one of Ukraine’s important banks. The investment should stimulate economic activity in key sectors, including metallurgy, agriculture, transport, communications and wholesale trade, which will provide significant employment in Ukraine.
First Ukrainian International Bank, established in 1991, is ranked among the top ten Ukrainian banks by the Ukrainian Commercial Bankers Association. Assets of FUIB totaled US$301 million at year-end 1997 and its total equity was US$52 million. The bank, which provides a full range of banking services, has a particularly strong track record in international banking services and corporate lending.
DEG is the German government company that promotes private enterprise in Africa, Asia, Latin America and in Central and Eastern Europe. It finances private investment on a long-term basis in all industries and supports financial sector development in its partner countries. Dr. Volker Neuschütz, the representative of DEG, said DEG considers this equity investment as a further contribution to support the development of the bank.
IFC, a member of the World Bank Group, fosters economic growth in the developing countries by financing private sector investments, mobilizing capital in the international finance markets, and providing technical assistance and advice to governments and businesses.
