Moscow, Russia, July 15, 2005
— The International Finance Corporation, the private sector arm of the World Bank Group, provided Ural-Siberian Bank today with a five-year, $30 million loan for on-lending to small and medium-sized Russian companies. IFC’s financing will help the bank expand its lending to private businesses in the Russian regions and support the bank’s merger with four other banks.
“We are pleased to work with Ural-Siberian Bank, a major Russian bank with impressive regional coverage. The IFC investment should help the bank further expand and diversify its portfolio and contribute to the development of medium-sized companies in the regions,” commented Edward Nassim, IFC’s Moscow-based Director for Central and Eastern Europe. “This is our first project with the bank, and we expect to have further opportunities for cooperation,” he added.
“IFC’s strategy in the Russian financial market is to support the growth of dynamic financial institutions that operate in the regions. We strongly believe that sound financial institutions are crucial for regional diversification of the country’s economy,” said Jyrki Koskelo, Director of IFC’s Global Financial Markets Department.
Alexnader Dementiev, Ural-Siberian Bank’s Deputy Chairman of the Board said, “UralSib is satisfied that after thorough due diligence IFC is opening this long-term credit line, which we will use for on-lending to small and medium enterprises. The agreement will help us develop our business in regions across Russia, especially in view of our forthcoming merger. The newly merged UralSib Bank will be one of Russia's largest financial and credit institutions.”
Ural-Siberian Bank is a leading private regional bank in Russia. At the end of 2004, UralSib had over 320 outlets throughout the country, including 21 branches and 7 subsidiaries, and it employed around 8,000 people. UralSib was founded in 1993 as an entity wholly owned by the Russian Federation’s Republic of Bashkortostan. In late 2003, 72.5 percent of the bank was acquired by companies related to the Nikoil Financial Corporation (now known as FC Uralsib). It is expected that in September 2005, UralSib will merge with four other banks owned by FC Uralsib, namely IBG Nikoil, Avtobank-Nikoil, Kuzbassugolbank and Bryansky Narodny Bank. The merger will bring together one of the most complete financial groups in Russia. The new banking group will be among the five largest banking institutions in Russia.
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 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.
Russia joined IFC in 1993. Since then, IFC has committed $1.8 billion in the country, including $200 million in syndicated loans, to finance 92 projects across a variety of sectors. IFC’s portfolio in Russia stands at $1.4 billion. Currently, Russia is the largest country exposure in IFC’s global portfolio. IFC’s investments spread across the country’s most important sectors including banking, leasing, housing finance, infrastructure, mining, agribusiness, pulp and paper, construction materials, oil and gas, telecommunications, information technologies, retail, and health care.
