RSB was established in 1999 as a new commercial and retail bank with a license to conduct full-scale banking operations. Since its creation, RSB has rapidly increased its retail loan portfolio and has become a market leader. The Bank is a closed joint-stock company and a part of the Roust group of companies owned and controlled by Roustam Tariko, a successful local entrepreneur. IFC became a shareholder of RSB in February 2003 and holds 10.4% of the Bank’s shares.

The proposed project consists of a three-year revolving $30 million facility and a short-term senior loan of up to $30 million for IFC’s account. In addition, IFC will consider a possibility of arranging a syndicated B Loan for the account of participants.

60.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	60.0
Equity

* These investment figures are indicative

RSB started its operations in Moscow but is currently operating in thirteen other regions throughout Russia.

This is a FI Type 1 project according to IFC’s environmental review procedure. RSB is required to operate an environmental management system to require and verify that its SME and corporate clients are in compliance with Russian environmental standards and, in connection with the existing IFC financing, it is providing IFC with an annual environmental report. RSB representatives have already participated in the IFC-organized environmental training.
Location of environmental documents in locally affected community

Consumer finance is one of the most promising sectors in the Russian banking. However, access to funding remains a serious constraint to consumer lending expansion and RSB continues to have limited access to financing sources. By providing much-needed funding to RSB, IFC would both promote consumer lending development in Russia and support an existing client. IFC support would be in large part used for expansion of RSB’s activities in the regions, where demand for retail banking services is even greater than in Moscow. As the Russian economy continues to stabilize, more successful banks and companies increasingly rely on ruble-denominated assets. Borrowing in dollars exposes these companies to a currency risk. Therefore, many current and potential IFC clients, including RSB, have expressed interest in ruble financing. In response to this request, the proposed loan package may include a ruble-denominated component. Specifically, IFC’s financing will: - Provide funds for expansion of consumer lending in Moscow and regions of Russia through a convenient, flexible structure. - Aim to create an innovative ruble-linked financing mechanism for the first time in the Russian market with a technically sophisticated partner. - Help RSB expand a pool of loan assets which may be subject to a securitization transaction in 2004.