- BACA: The sponsor is Bank Austria Creditanstalt (BA-CA), member of HVB Group, Germany. BA-CA is now more than 75% owned by the HVB Group with the remainder of its shares publicly traded. In addition to being the leading corporate and retail banking group in Austria, it has also built a strong overall business franchise in the Central European countries. BA-CA had total assets of EUR 147.9 billion, pre-provision income of EUR1.04 billion and total capital of EUR11.7 billion as of 12/31/02. HVB is the second-largest banking group in Germany and the largest European mortgage bank, with the majority of its shares publicly traded. HVB’s core markets are Germany, Austria, and CEE. Following the acquisition of BA-CA, HVB decided to concentrate its activities in Austria and Eastern Europe at BA-CA, whereas HVB assumes responsibilities in all other regions. HVB employed 65,926 staff at year-end 2002, down from 69,520 at year-end 2001, with BA-CA accounting for 43%. It has 2,104 branches, of which BA-CA has 1,345, and serves 8.5 million customers, including 1.8 million in Austria and 3.3 million in CEE.

The proposed IFC investment is an A-Loan of up to EUR 18 million and an equity investment of up to EUR 4.1 million for IFC’s own account.

28.22 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	23.42
Equity	4.80

* These investment figures are indicative

CPB is headquartered in Sarajevo and has branches across the Bosnian Federation and Travnik region.

This is a category FI Type I project and IFC has an existing relationship with CPB, the Bank proposed to be acquired by BACA. CPB has begun to adopt a responsible approach to environmental issues. Two employees of CPB attended IFC''s CEA Workshop in Feb 2003, and recently have asked for assistance from IFC in preparing and implementing their EMS in an environment where local and host country environmental regulations and compliance is very weak. IFC will continue to monitor and assist CPB''s environmental management as necessary.
Location of environmental documents in locally affected community

- Development Impact: After the investment by BA-CA, CPB is expected to be completely revitalized and as a result to increase the mobilization of savings, better serve its traditional local corporate clients and consolidate its strong market position in the retail sector. BA-CA’s involvement is expected to result in the introduction of better banking products and services and state of the art risk management systems and controls, as well as in a significant transfer of technology and skills, thereby providing an important demonstration effect for the rest of the sector. IFC’s funding line for CPB will allow the Bank to extend medium- and long-term loans to these clients, enable them to make investments and thus help to improve the performance of the private sector in general. - IFC Role:  IFC has and continues to play catalytic and honest broker roles in structuring the project and proposing a solution to the obstacles that prevented the privatization of CPB. IFC has been facilitating the privatization process for several years and has been instrumental in identifying and introducing CPB to potential strategic partners.