Washington, DC, September 3, 2002
—The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, will support Croatian home buyers with a EUR 20 million loan to Erste & Steiermarkische Bank d. d. (ESB), a leader in Croatian mortgage finance.
As part of the agreement signed on September 3, IFC will provide a ten-year line of credit to ESB which will enable the company to originate residential mortgage loans, thus deepening the mortgage market and offering new opportunities for home buyers. This new financing represents IFC’s entry into the Croatian mortgage finance market, a crucial building block of the Croatian financial sector.
IFC Director of Southern Europe and Central Asia, Khosrow Zamani, who is currently visiting Zagreb, said: “We are delighted to deepen our cooperation with Erste & Steiermarkische Bank through this new financing. We feel ESB’s expertise in the Croatian mortgage market combined with IFC’s broad experience in this sector in emerging markets will hasten the development of the Croatian mortgage finance market, making finance more readily available to individuals.”
The financing follows IFC’s EUR 16 million credit line in 1999 to support ESB’s lending to small-and medium-sized enterprises.
Erste & Steiermarkische Bank d.d. was formed in September 2000 through the merger of three highly successful Croatian regional banks with a long track record and experience in the local market. The bank has already established itself as one of the leading foreign banks in the market and has ambitious growth plans. Erste & Steiermarkische Bank d.d. combines in-depth knowledge of the Croatian market with the financial strength and expertise of its strategic shareholders and two of the leading banks in Austria and Central Europe: Erste Bank der Oesterreichischen Sparkassen AG and the Steiermarkische Bank und Sparkassen AG who jointly hold 83 percent of the share capital of Erste & Steiermarkische Bank d.d.
After signing the Agreement, Tomislav Vuic, the president of the ESB management board, said: “We are pleased by the vote of confidence IFC has displayed in our company through this investment. Erste & Steiermarkische Bank has created significant business growth in the field of housing credit lines. Therefore, the approved financial support will help us further expand our growth in this market while providing new opportunities for young people to become homeowners. As part of our strategy, we continue to seek out new products and services that will attract Croatia’s considerable youth demand for banking services, while continuing to effectively serve our present clients.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2002, IFC committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s committed portfolio at the end of FY02 was $15.1 billion for our own account and $6.5 billion held for participants in loan syndications.
