The bank was established in 1992 by Inkobank , the State Pension Funds and Oranta, the national insurer. Today the bank is owned by its management directly and indirectly through three insurance companies that are fully controlled by management. - Ownership The bank is owned 68% by its management, with another 18% owned by employees who have transferred their voting rights to the president of the bank, Mr Spiegl, a member of parliament. For tax purposes, management has set up three insurance companies, which each hold 10% of the bank’s equity and are fully controlled by management. Aval is not affiliated with any industrial group. - Management The members of the management board are all key shareholders and are former leaders of Komsomol, the youth organization of the communist party. Over the past several months IFC has had meetings with Mr. Spiegl; the CEO, Mr. Derkach, and, at the working level, the deputy chairman, Mr. Yulenko, who is in charge of corporate business. Although Aval has a fairly traditional corporate culture, management has promoted a young generation of second level managers who are responsible for the most of the day to day business. IFC staff were impressed with their professional knowledge and attitude of these staff.

IFC’s investment will be in the form of a senior loan (A Loan) secured by loan assets of up to $30 million to JSC Post-Pension Bank Aval.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity

* These investment figures are indicative

The location of this project is in Kiev, Ukraine. The bank has a country wide branch network with more than 1,300 branches/sub-branches and 16,000 employees, who serve 30,000 corporate and more than 3 million individual clients. The bank lends to clients throughout the country.

The IFC loan will: - provide long term funding for the bank, thereby reducing the maturity gap and enabling the bank to manage its balance sheet better. IFC’s “credibility stamp” should also help Aval to access more long term funding from private sources; - provide longer term funding to Ukrainian SMEs , and thus enable them to be more competitive in domestic and international markets; and - send a signal to the local banking market that IFC is ready to provide support to banks which are prepared to meet certain standards. IFC’s Role: - development of efficient capital markets; - support to SMEs by coupling investment with TA, and - increasing efforts to finance Ukrainian sponsored businesses. IFC strategy for the Ukrainian banking sector encompasses: - building long-term relationships with leading independent private banks (eg Aval, RZB Ukraine) - supporting the introduction of specialized banking products, including mortgage financing (eg RZB Ukraine, International Mortgage Bank) and leasing (eg First Lease). - supporting the process of privatization of state-owned banks where feasible. IFC will seek to build long-term relationships with partners who are committed to good standards of corporate governance. Where appropriate, IFC will combing investment transactions with TA under the Private Enterprise Partnership project. This transaction fits well with the overall strategy of the WBG.

This is an FI type 1 project. AVAL will be required to establish an environmental and social management system (EMS) to ensure that its lending activities comply with applicable environmental and social requirements of Colombia. IFC will assess the bank''s capacity to develop and implement an EMS.
Location of environmental documents in locally affected community