EBRD boosts eastern European banks

Published: September 30, 2009

The EBRD has lent €150mn to three subsidiaries of Raiffeisen International Bank in Ukraine, Romania and Russia.

The subordinated loans will boost the banks’ tier 2 capital: €100mn to Raiffeisen Bank Aval in Ukraine, €25mn to Raiffeisen Bank in Romania, and €25mn to Raiffeisenbank in Russia. The loans to the Ukrainian and Russian subsidiaries will be in dollars.

The loans should strengthen the capitalisation of Raiffeisen’s network banks in order to support their lending. The funding offered by the EBRD is part of a coordinated €1bn package for Raiffeisen International, also including funds from the European Investment Bank and the World Bank Group.

The investment is part of the joint pledge by the three international financial institutions to provide over €24.5bn to the region’s banking sectors to fund lending to businesses hit by the global crisis.

So far this year, the EBRD has committed more than €2.2bn to the financial sector in the countries where it invests. As a result of increased demand for the bank’s assistance, the EBRD is raising the level of its overall investments to up to €8bn this year.