37786 - NBG Equity

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Summary of Investment Information

Project Number

37786

Company Name

NATIONAL BANK OF GREECE S.A.

Date SPI Disclosed

Dec 4, 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 : Dec 2, 2015
Invested : Dec 3, 2015

Sector

Commercial Banking - General

Project Description

The project consists of a straight equity investment by IFC of EUR20 million in National Bank of Greece S.A. (“NBG” or the “Bank”) to support the recapitalization of the Bank by participating in a share offering in accordance with the Recapitalization Framework.

Founded in 1841, NBG is the oldest and the third largest bank in Greece with the market shares of approximately 25% in household lending and 25% in deposits. The Bank serves more than 6 million of retail and 8,700 corporate clients through the network of more than 500 branches, 1,400 ATMs and 55,000 points of sale. NBG has considerable presence in other SEE countries, including Bulgaria, F.Y.R.O.M., Albania, Serbia, Romania and Cyprus. The Bank also operates in Turkey via the 99.8%-owned subsidiary Finansbank A.S.

As of September 30, 2015, NBG had total assets of EUR110.9 billion, total customer deposits of EUR55.8 billion and total net loans of EUR63.9 billion. The Bank’s Common Equity Tier I ratio as of the same date was 9.6%.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	55.02

Development Impact

The Project is expected to
- enable NBG to continue supporting SME customers, promoting economic activity and job creation in Greece
- 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
- contribute to the stability of the economy in neighboring countries which have been impacted by the ongoing crisis in Greece

IFC''s investment in NBG by participating to the share offering is expected to:
- have an important demonstration effect to the market and play a critical role in restoring the market sentiment around the Greek banking system by replenishing adequate level of capital by end 2015
- help attract other investors, hence ensure a succesful 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 NBG 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 group also has exposure to some high risk sectors such as oil refining, metal constructions, energy and mining. 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. NBG Group have an Environmental and Social Management System in place mainly for corporate portfolio, partially in line with IFC requirements. NBG Greece and selected subsidiaries are mostly in line with IFC Performance Standard 2 on Labor and Working Conditions. 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, in addition to establishing external grievance mechanisms in line with IFC requirements. In addition, once in portfolio, IFC will review the implementation and performance of the Bank and its relevant selected subsidiaries.”

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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.

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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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