Belgrade, Serbia, December 13, 2010—
IFC, a member of the World Bank Group, and the European Bank for Reconstruction and Development are jointly investing €8 million in Cacanska Banka ad Cacak to strengthen Serbia’s banking sector and speed its recovery from the global financial crisis. IFC is investing about €6 million and the EBRD about €2 million.
This equity investment will strengthen Cacanska Banka, an important regional bank in Western Serbia, by providing a capital buffer to ease liquidity problems arising from the economic downturn. The capital increase will allow the bank to continue lending to small and midsize companies, thereby generating jobs and growth in the region.
Dragan Jovanovic, President of Cacanska Banka’s Executive Board, said: “This capital increase reinforces the capital position of Cacanska Banka and creates new potential for the bank’s further development and strengthening of its position in the Serbian market.’’
The project will also enable Cacanska Banka, with the Serbian government as its largest shareholder, to continue to develop into a proven, attractive asset that will be privatized according to a timetable agreed on by investors and the government.
“This investment demonstrates our joint commitment to Serbia’s banking sector in a time of global financial crisis,” said Dimitris Tsitsiragos, IFC Director for Middle East, North Africa, and Southern Europe. “We are helping Cacanska Banka reinforce its position as an important lender to small businesses in Western Serbia, while also helping the bank prepare for privatization once the broader economy revives.”
This is the second joint investment of IFC and EBRD in the Serbian banking system under the crisis response initiative. Last December, IFC and the EBRD invested around €90 million in Komercijalna Banka ad Beograd.
“This transaction will help Cacanska Banka to reinforce its position as an important SME bank in Western Serbia and will support its further development, preparing the institution for privatization in the post-crisis period,” said Hildegard Gacek, EBRD Director for Serbia.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
