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Thursday, September 18, 2003

EBRD, Volksbank strengthen ties in central and eastern Europe

Up to €150 million to be invested in subsidiaries of Volksbank Group
To help meet the increasing investment needs of individuals, small businesses and municipalities in central and eastern Europe, the EBRD will provide as much as €150 million to regional banks belonging to Austria's Volksbank Group.

The EBRD will support Volksbank’s subsidiaries, which are providing an increasingly diverse array of finance to clients in the region, including loans, especially for local entrepreneurs; mortgages, to meet the growing demands of people wishing to own their own homes; and medium to long-term finance to small and medium-sized enterprises (SMEs) and small and medium-sized municipalities, which otherwise find such finance scarce.

As part of this growing relationship with Volksbank, the EBRD today signed four subordinated loan facilities totalling €37.5 million to regional banks in Bosnia and Herzegovina (€7.5 million), the Czech Republic (€10 million), Hungary (€10 million) and Slovenia (€10 million). These facilities will not only provide medium and long-term funds to Volksbank clients, they will also strengthen the capital bases of each bank, allowing them to further expand their business in the region.

The Bank is also providing an additional €2.6 million for a 14.5 per cent stake in the Volksbank Group subsidiary in Serbia and Montenegro.

At a signing ceremony in Vienna, Noreen Doyle, First Vice President at the EBRD, said Volksbank Group and the EBRD share a common goal in developing access to finance for local citizens and SMEs across the region. The EBRD’s relationship with Volksbank is going from strength to strength in central and eastern Europe in stimulating economic growth and in committing to improving the lives of people in this part of the world, Ms Doyle added.

With banks spread across the region, Volksbank Group employs more than 1,500 local staff. Today’s agreements build on a solid base of experience between the EBRD and Volksbank, bringing to eight the number of projects the two have worked together on in six countries. With scope to increase its exposure to Volksbank to €150 million, the EBRD expects the cooperation to deepen significantly going forward.



Press contact:
Jazz Singh, London - Tel: +44 20 7338 7931; E-mail: singhja@ebrd.com

Source  EBRD

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