31979 - RBI Equity

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Summary of Investment Information

Project Number

31979

Company Name

RAIFFEISEN BANK INTERNATIONAL AG

Date SPI Disclosed

Feb 6, 2014

Country

Eastern Europe Subregion

Region

Europe

Projected Board Date

Feb 6, 2014

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Jun 21, 2012
Signed : Jan 21, 2014
Invested : Jan 23, 2014

Sector

Commercial Banking - General

Project Description

The project consists of a straight equity investment by IFC of up to EUR150 million in Raiffeisen Bank International AG (“RBI”). The shares, which are listed on the Vienna Stock Exchange, were acquired by participating in a private placement by RBI in the form of an Accelerated Bookbuilding (“ABB”). The ABB is part of a capital increase and is followed by a rights issue to existing investors. RBI has confirmed to IFC that it will deploy the IFC investment in the form of Tier 1 capital as part of its capital planning in the subsidiaries ZAO Raiffeisenbank, Raiffeisen Bank d.d. Bosna i Hercegovina, Raiffeisen Bank Polska S.A. and Raiffeisen Bank Kosovo J.S.C. (“Selected Subsidiaries”).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	186.05

Development Impact

The proposed investment would allow IFC to i) Counter the deleveraging effect by providing the RBI subs with tier 1 capital, ii) enable RBI to continue supporting SME customers, promoting economic activity and job creation in the respective countries, iii) contribute to the banking sector stability by increasing the capital of the emerging markets subsidiaries and iv) have a signaling effect to the market showing support to the banking sector in ECA.

E&S Category Rationale / Risks and Mitigation

The project is an IFC equity investment in Raiffeisen Bank International AG (RBI), through a capital increase, to channel financing to 4 banks in RBI’s network in CEE namely, Bosnia and Herzegovina, Kosovo, Poland, and Russia. RBI is a universal bank active in 17 markets in Central and Eastern Europe ("CEE") and Austria through a network of subsidiary banks, leasing companies and specialist financial service providers. In CEE, RBI acts as a universal bank offering retail, corporate, and investment banking services. Corporate lending constitutes significant portion of the Selected Subsidiaries'' portfolio. Some sectors of lending, due to the nature of these sectors, mainly entail medium to high environment and social risk and impacts according to IFC standards. The project has therefore been categorized as FI-1 in accordance with IFC’s Environmental and Social Review Procedure. For this project, Selected Subsidiaries, which IFC investment would be channeled to, will be required to screen against the IFC Exclusion List, Host Country Environmental and Social Laws and Regulations, and IFC Performance Standards.

The main Environmental and Social (“E&S”) risks and impacts for this equity investment relate to ensuring that RBI’s Selected Subsidiaries have adequate systems and capacity in place to manage the operations being financed in accordance with applicable requirements, including compliance with IFC''s Exclusion List, Host Country Laws and Regulations, and IFC Performance Standards for high risk projects.

During appraisal, IFC reviewed RBI’s Selected Subsidiaries’ E&S management system (“ESMS”) and capacity, as well as their performance under previous IFC investments. One of RBI’s Selected Subsidiaries has an ESMS in place and has designated a staff member with overall responsibility for implementing the ESMS. RBI’s Selected Subsidiaries need to provide training to all staff in ESMS implementation. Under IFC’s investment, this ESMS will need to be expanded to ensure full compliance with all applicable requirements, and rolled out consistently in all of the Selected Subsidiaries. This will include assigning responsibility to a staff member or department for E&S due diligence, monitoring and reporting, and providing training to staff involved in ESMS implementation in each of these banks.

In addition, Selected Subsidiaries’ human resources policies and practices will need to comply with the requirements of IFC’s PS2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Investor Relations
Raiffeisen Bank International AG
Am Stadtpark 9, A-1030 Vienna
Austria
Telephone: +43 1 71707 2089
Fax: +43 1 71707 2138

For Inquiries and Comments About IFC, Contact

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date	Status	Comments	Completion Date
Nominate officers		Completed	Completed
Establish SEMS		Completed	Completed
Staff Training		In Progress	In Progress
Enhance HR Practices		Completed	Completed

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