37645 - Eurobank Equity

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Summary of Investment Information

Project Number

37645

Company Name

EUROBANK ERGASIAS S.A.

Date SPI Disclosed

Nov 24, 2015

Country

Greece

Region

Europe

Projected Board Date

Dec 25, 2015

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Nov 12, 2015
Signed : Nov 18, 2015
Invested : Nov 20, 2015

Sector

Commercial Banking - General

Project Description

The project consists of a straight equity investment by IFC of up to EUR 50 million in Eurobank Ergasias S.A. (“Eurobank” or the “Bank”) to support the recapitalization of the Bank by participating in a private placement in the form of a Book Building Process (“BBP”) in accordance with the Greek recapitalization framework (the “Recapitalization Framework”).

The Bank is one of the four systemic banks in Greece, providing key banking product and services. As at 30 September 2015, the Bank had €73.8 billion, €51.7 billion and €30.5 billion in consolidated total assets, gross loans/advances to customers, and customer deposits, respectively. As at 30 September, 2015, it had a network of 927 branches (retail and corporate) in Greece and the other six countries in which it operates, and a total workforce of 16,662 employees. The Bank’s international presence covers Romania, Bulgaria, Serbia, Ukraine (available for sale), Cyprus and Luxembourg (including, in the latter jurisdiction, a banking subsidiary with one branch in Luxembourg and a branch in the United Kingdom).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	165.06

Development Impact

1. A recapitalization before 1 January 2016 will:
- Help restore confidence in the Greek banking system and the country overall therefore opening a path to recovery
- Preserve the position of current private investors, thereby maintaining private status of the Greek banks and minimizing use of additional tax payers'' funds
- Avoid the bail-in of depositors including individuals and SMEs
- Allow for a quicker exit of the Greek State from the Bank''s capital in the near future
2. The stabilization of the Greek economy will also have a positive spill-over effect on the neighboring countries

IFC''s investment in Eurobank, through participation in the Book Building Process, is expected to:
- have an important demonstration effect in the market and play a critical role in restoring the market sentiment around the Greek banking system, by replenishing the adequate level of capital by end 2015 to avoid depositors bail-in;
- help attract other investors, hence ensure a successful capital increase and sustainable private ownership of the Bank as recommended by the Recapitalization Framework;
- enhance the Bank''s environmental and social risk management.

E&S Category Rationale / Risks and Mitigation

The project consists of an equity investment in Eurobank (the ?Bank?) to support the recapitalization of the Bank. The project has been classified as FI-1 according to IFC Environmental and Social (?E&S?) Review Procedure. The highest exposure in the group?s portfolio is wholesale trade, manufacturing, and services. The group also has exposure to some high risk sectors such as oil refinery, energy, metal processing, and shipping. For this project, IFC's applicable requirements will be to ensure that loans extended by the Bank and by any of its relevant selected subsidiary will be screened against the IFC Exclusion List, applicable environmental and social national laws and regulations, and the IFC Performance Standards. In addition, the Bank and all its relevant selected subsidiaries will comply with the requirements of IFC?s PS2 on Labor and Working conditions.

The main E&S risks of the project relate to ensuring that the Bank (and its relevant selected subsidiaries) have adequate systems and capacity in place to manage the E&S risks of the operations being financed in accordance with the applicable requirements, including compliance with IFC?s exclusion list, host country laws and regulations, and the IFC Performance Standards. To mitigate the risks inherent to the project, the Bank and all its relevant selected subsidiaries will be required to demonstrate commitment to (i) developing and implementing Environmental and Social Management System (?ESMS?) in line with IFC Performance Standard 1 (?PS1?) and develop appropriate internal capacity to undertake E&S risk management; and ii) the labor standards established by the IFC Performance Standard 2 (?PS2?). In addition, once in portfolio, IFC will review the implementation and performance of the Bank and its relevant selected subsidiaries.

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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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Task Title & Description	Anticipated Completion Date
Nominate officers	01/04/2016
Establish SEMS	02/04/2016
Formalize procedures	06/06/2016
Develop guidelines	12/04/2017
Upgrade Applicable requirements	12/04/2015
Staff Training	06/06/2016
Enhance HR practices in line with IFC Performance Standard 2: Labor and Working Conditions	03/04/2016

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