WASHINGTON, D.C./BUCHAREST, June 8, 2004 —
The International Finance Corporation, the private sector arm of the World Bank Group, will provide a 20 million Euro loan to Banca Transilvania to help expand the emerging housing finance market in Romania. The agreement was signed today in Bucharest by Peter Woicke, executive vice president of IFC, and Robert C. Rekkers, chief executive officer, of Banca Transilvania
IFC’s funding will give further momentum to Banca Transilvania’s mortgage lending operations, which currently exceed $60 million and account for 10 percent of the Romanian mortgage market. The new line of credit will enable the bank to add over 2,000 residential mortgages with a maturity of up to 15 years to its current portfolio of 7,000 mortgages. The project will promote competition and strengthen mortgage finance in Romania. The loan is part of IFC's wider strategy to develop housing finance through increased mortgage origination.
Mr. Woicke said at the signing ceremony in Bucharest, "Financial market development plays a central role in IFC’s strategy for Romania. We are pleased to be involved in the introduction of new products such as mortgage finance. In providing funding for the primary mortgage system, IFC will not only make home purchasing more affordable, but also help increase the depth and liquidity of Romania’s financial markets. In addition, the investment will spur growth in the construction industry and related sectors.”
Mr. Rekkers noted, "We are very honored that IFC has become a strategic partner for Banca Transilvania in providing financing for our mortgage lending. Banca Transilvania is very optimistic about the future development of Romania’s mortgage market. This is why we decided to be a major player in this market segment. The new facility will help BT expand even further."
Khosrow Zamani, IFC's director for Southern Europe and Central Asia, added, “In Romania, especially in areas outside urban centers, there is a great demand for better quality housing. IFC’s mortgage loan addresses this need directly and will help improve living standards. We hope that the loan agreement marks the beginning of a long-term relationship with Banca Transilvania.”
Established in 1993 by a group of entrepreneurs, Banca Transilvania is the 12th-largest bank in Romania and the leading regional bank in the country, offering a wide range of banking services to its more than 260,000 retail and 50,000 corporate clients. As of December 2003, Banca Transilvania held 2.0 percent of the deposits and 2.5 percent of the loans of all Romanian banks. It has a rapidly expanding network of over 80 branches and the nation’s fourth-largest ATM system. Banca Transilvania is currently strengthening its position through new mortgage and retail banking franchises.
The mission of IFC (
www.ifc.org
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
