33079 - Multimortgage

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Summary of Investment Information

Project Number

33079

Company Name

KB DELTAKREDIT, AO

Date SPI Disclosed

Apr 16, 2013

Country

Russian Federation

Region

Europe

Projected Board Date

May 20, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : May 21, 2013
Signed : Sep 2, 2013
Invested : Feb 26, 2014

Sector

Primary Mortgage Institutions

Project Description

The proposed project is to provide an IFC A Loan of up to $70 million, backed by a guarantee from Société Générale, to CJSC DeltaCredit Bank (“DCB” or “Bank”). DCB is an existing IFC client and the Russian subsidiary of the Société Générale Group (France). The proposed loan would have a maturity of up to 10 years and would be available in both rubles and dollars to be used to provide mortgages to individual borrowers. DCB is the mortgage lending subsidiary of Société Générale in Russia. The Bank was acquired by Société Générale in 2005 and as of end-2012 ranked #68 in Russia with over $2.5 billion in assets.* DCB is one of the leading players in the Russian mortgage market, ranking #4 in Russia by outstanding mortgage portfolio with a market share of approximately 4%.** The Bank has a direct presence in 14 large Russian cities and has a network of 57 correspondent banks which allow it to reach 71 cities in 57 regions. *Source: the RBC rating of Top500 banks on net assets (local GAAP) ** Source: the RBC rating; Central Bank of Russia

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	70.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The project will (i) help support the development of the housing sector in Russia and primary mortgage market; (ii) strengthen the balance sheet of a leading mortgage finance institution that serves as a market model for providing housing finance to individuals; (iii) and will help provide proof of concept and demonstration of a fixed/floating hybrid mortgage product which can be replicated by other institutions.

- Local Currency Financing: IFC will be able to provide the mortgage loan in local currency at maturities generally not available on the market, helping the Bank better manage its asset/liability maturity mismatches.
- Innovation: the proposed fixed/floating structure is not common on the Russian market. By providing the mortgage line IFC can create a demonstration effect in the sector and help promote an innovative product which decrease risks to both lenders and borrowers in line with those common in developed markets.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of a US$70 million senior mortgage loan to an existing IFC client, Delta Credit Bank, a Société Générale subsidiary in Russia, focused exclusively on mortgage lending across Russia. As the project will only support mortgage lending for individuals, there are no environmental and social risks associated with the investment. The project has therefore been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure. The client will be required to enhance its Grievance Mechanism Procedure and commit to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Sergey Grishaev Head of Treasury DeltaCredit Bank, Societe Generale Group Telephone: +7 495 960 3161 x2326 Email: mailto:sgrishaev@deltacredit.ru

For Inquiries and Comments About IFC, Contact

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
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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.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
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Email: cao@worldbankgroup.org
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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.

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