Washington, D.C., May 11, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, will provide a €10 million credit line to Nova Banka a.d., a commercial bank in Bosnia and Herzegovina, for lending to small and medium enterprises and home buyers.
Through the credit line ($12.3 million equivalent), IFC will support Nova Banka’s strategy to grow its business through on-lending to smaller enterprises and to the consumer retail housing sector. The credit line will enable Nova Banka to meet the needs of companies and consumers for long-term financing.
Jyrki Koskelo, IFC’s director for Global Financial Markets, said, “IFC financing will help Nova Banka expand its ability to offer longer-term loans, scale up its operations in the Republic of Srpska, and broaden its service delivery in Bosnia and Herzegovina, strengthening its reputation in the local market.”
IFC’s investment is in line with its strategy of helping banks and other local financial intermediaries develop small and medium enterprise lending and housing finance operations in Bosnia and Herzegovina. Smaller businesses, which account for 60 percent of the country’s industrial output, are important sources of jobs and economic activity, and home ownership can be a vital source of collateral for low and middle-income families.
Shahbaz Mavaddat, IFC’s acting director for Southern Europe and Central Asia, said, “It is important for IFC to reach out beyond the larger banks to invest in locally focused, well-operated financial institutions such as Nova Banka.”
IFC also is considering implementing a technical assistance program in the areas such as risk management and treasury operations for better service delivery to Nova Banka’s retail and corporate clients.
Milorad Andzic, Nova Banka’s general manager, said, “IFC’s financing will help us support the development of business in Bosnia and Herzegovina. There is a growing market demand for loans from small and medium enterprises and retail customers, which we are now better positioned to meet.”
Janez Klobcar, representative of Poteza on Nova Banka’s supervisory board, said, “The credit line will enable Nova Banka to attract new clients and provide new, long-term products to existing clientele. It will also empower Nova Banka to compete efficiently with larger foreign-owned banks in several areas and actively participate in the growth of the local banking business.”
About IFC
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.
About Nova Banka
Nova Banka is a licensed commercial bank headquartered in Bijeljina, Bosnia and Herzegovina, with 11 branches and 58 outlets mainly in the Republic of Srpska. Established in 1992, Nova Banka has developed a branch network covering the main commercial centers in the Republic of Srpska region. As of December 2005, Nova Banka had total assets of BAM 246 million (€126 million, $155 million) and total gross loans of BAM 161 million (€82 million, $101 million).
Poteza Adriatic Fund B.V (Poteza), an existing IFC portfolio private equity fund sponsored by Poteza Nalozbe d.o.o. from Slovenia, and a co-investor, Prva Pokojninska Druzba d.d., a pension insurance company based in Slovenia, control the majority stake in Nova Banka. In June 2005, Poteza and Prva acquired 50 percent + 1 share ownership of the bank. Poteza and Prva own 44.1 percent and 5.9 percent respectively of the bank’s share ownership.
