Paris, June 24, 2003
.- The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement today to provide a five-year $100 million loan to Banque Commerciale pour l’Europe du Nord-EUROBANK (BCEN-EUROBANK), Paris.
The loan will provide BCEN-EUROBANK additional opportunities to do business in Russia and will help Russian companies to access medium-term financing. In addition, by providing term resources at a time when the bank is going through a transition from state to private ownership, IFC will strengthen the revenue base, financial standing and reputation of BCEN-EUROBANK.
“We believe that the loan will help BCEN-EUROBANK to further develop its core specialization in structured trade finance. The loan will give BCEN-EUROBANK the ability to extend longer-term funding available to Russian companies that are currently constrained by the lack of term financing. IFC’s strategy is to stimulate growth in the financial sector to support the country’s economic development”, commented Mr. Edward Nassim, IFC’s Moscow-based Director for Central and Eastern Europe.
BCEN-EUROBANK, incorporated in 1921 in France, is 87% majority owned by the Central Bank of Russia (CBR). BCEN-EUROBANK was established primarily to facilitate trade between France and USSR and later between the Russian Federation and the rest of the world. Following the break up of the Soviet Union in 1991, the bank became part of a network of Russian banking subsidiaries abroad owned by the Central Bank of Russia. This network included also Moscow Narodny Bank, Donau Bank AG, Russian Commercial Bank, Ost-West Handelsbank AG and East-West United Bank SA. These banking affiliates formed a banking network encompassing all the major European financial centers namely, Paris, London, Vienna, Frankfurt, Zurich and Luxemburg.
Today, the Central Bank of Russia (CBR) is the major shareholder only in the following banks : BCEN-EUROBANK, Moscow Narodny Bank and Ost-West Handelsbank AG.
BCEN-EUROBANK is subject to French legislation and banking regulation and is under control of French banking Authorities, Banque de France.
“BCEN-EUROBANK is actively involved in various fields with a large number of Russian companies. Its activities in the economic and financial sectors are in expansion. They include : facilities for import and export funding or prefunding, confirming letters of credit, export loans, active trading of Russian eurobonds, correspondent bank services. This loan will help to further develop the bank’s activities in the Russian private sector” commented Mr Andreï Movtchan, Chairman of the Board of BCEN-EUROBANK.
BCEN-EUROBANK will be required to develop an environmental management system to ensure that investments under relevant operations meet host country environmental, health and safety requirements. IFC will assess BCEN-EUROBANK’s capacity for environmental review.
On the basis of financial statements for the year 2002, statutory auditors certify that BCEN-EUROBANK’s total gross assets amounted to Euro 1.1 billion, with capital stock of Euro 383 million (including a subordinated loan granted by the Central Bank of Russia) ; the bank posted a profit of Euro 35 million after taxes.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in transition economies, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the emerging markets, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has 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 worldwide committed portfolio as of FY02 was $ 15.1 billion for its own account and $ 6.5 billion held for participants in loan syndications.
Russia joined IFC in 1993. Since then IFC has invested over $1.3 billion to finance nearly 70 projects across a variety of sectors. IFC significantly increased its investment program in Russia in the last two years, investing $217 million in FY02 (July 1, 2001 – June 30, 2002) and over $500 million this fiscal year. IFC’s increased activity reflects the improving investment climate in Russia, greater opportunities in an increasingly broad range of sectors, and stronger foreign investor interest.
