Kiev, August 11, 2005
-- The
International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed agreement with Aval Bank, Ukraine’s one of the largest and locally owned bank, to provide up to $50 million in the form of a Tier II qualifying subordinated loan. This is IFC’s second investment in Bank Aval and represents the IFC’s largest investment in the financial sector of Ukraine.
Edward Nassim, IFC Director for Central and Eastern Europe, noted, “This investment represents IFC’s strategy to support local banks and financial institutions that adhere to international best practices. IFC’s new investment in AVAL is expected to further strengthen the bank’s standing among Ukrainian banks and set example for other to follow.”
According to Jyrki Koskelo, IFC Director for Global Financial Markets, “IFC welcomes the opportunity to support dynamic local financial institutions that operate in transition economies and intends to work closely with AVAL in supporting the implementation of its growth and diversification strategies.”
Oleksandr Derkach, Chairman of AVAL’s Board, added, “We appreciate IFC’s support, which brings many advantages, including long-term financing, needed tier II capital and access to international best practices, and we would like to leverage this relationship for the long-term benefit of AVAL.”
Bank AVAL was established in 1992 and is now the second largest bank in Ukraine in terms of asset size. It operates as a full-service commercial bank, offering corporate, SME and retail banking services through a branch network of more than 1,400 outlets. AVAL has more than 214,000 corporate clients and over 4 million private individuals.
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. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
Ukraine became a member of IFC in 1993. As of today, IFC has invested $335 million in 18 projects. IFC significantly expanded its investment program in Ukraine in 2003-2004, committing $72 million of investments in the agribusiness, financial and general manufacturing sectors. IFC has also been conducting an extensive advisory program in Ukraine since 1992. IFC has contributed to privatization of small businesses and unfinished construction sites and to land and mass privatization. Current donor-funded programs offer advice on corporate governance, leasing, development of the agribusiness sector, and seek to improve the business environment, and promote the growth of small and medium enterprises.
