37788 - Alpha Bank Recap

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Summary of Investment Information

Project Number

37788

Company Name

ALPHA SERVICES AND HOLDINGS 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 23, 2015

Sector

Commercial Banking - General

Project Description

The project consists of a straight equity investment by IFC of EUR60 million in Alpha Bank A.E. (“Alpha Bank” or the “Bank”) to support the recapitalization of the Bank by participating in a private placement in the form of an Accelerated Bookbuilding (“ABB”) in accordance with the Recapitalization Framework.

Founded in 1879 by the Costopoulos family, Alpha Bank is the oldest banking group in Greece and the second largest with a market share of 23% by customer loans. It offers a complete range of banking services, including retail, SME and corporate banking, as well as wealth management. The Bank’s international footprint includes five SEE markets (Romania, Cyprus, Serbia, Albania and FYROM) with approximately 85% of the business concentrated in Romania and Cyprus where Alpha Bank enjoys a strong position. As of September 30, 2015, Alpha Bank had total assets of €69.8 billion, total customer deposits of €30.5 billion and total net loans of €47.0 billion. The Bank’s Common Equity Tier I ratio as of the same date was 12.5% (fully-loaded 11.8%).

Sponsor / Cost / Location

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

Development Impact

The Project is expected to
- enable Alpha Bank 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 Alpha Bank by participating to the ABB 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 Alpha Bank (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 to manufacturing, wholesale and retail trade, and construction. The group also has exposure to some high risk sectors such as Energy (oil & gas), metal products, shipping, and energy production. 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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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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