The Sponsor, Bank Austria Creditanstalt, is a member of HVB Group, Germany. HVB is the second-largest banking group in Germany, with the majority of its shares publicly traded. It is rated A- by S&P. HVB offers a full range of banking services to retail and corporate customers and has a network of some 2,100 branches of which around 950 are located in Germany and 400 in Austria. As of December 2004, HVB’s total assets were EUR467 billion and shareholders’ equity was EUR11.5 billion.

The proposed IFC investment is a senior loan of up to EUR30 million for IFC’s own account.

38.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	38.0
Equity

* These investment figures are indicative

Belgrade, Serbia and Montenegro

IFC has a number of important roles in this project: - First, its investment would strengthen and expand the long-term financing capacity of HVB Bank, including in the areas of mortgages and SME lending. - Second, its involvement at this particular time would enable HVB Bank to further diversify its funding base. - Third, this project would signal a strong demonstration effect in a fast-changing financial sector environment in a frontier country in which IFC’s presence has great value added. - Fourth, the loan will help develop a primary mortgage market in Serbia through the availability of long-term financing. This project has some important developmental benefits: - It is expected to address the lack of long-term funding, particularly for mortgages and SMEs, and therefore contribute to the growth of these sectors and the economy in general; and - As one of IFC’s first financial sector investment in Serbia (outside of microfinance) since the beginning of the war in 1991, the project is expected to increase confidence in the country’s financial sector.

This is a category FI type 1 project according to IFC''s Environmental and Social Review Procedure. HVB will be required to designate individuals to have responsibility for environmental issues and who will attend environmental training; submit to IFC an environmental management plan; establish an environmental management system to ensure that activities financed under relevant operations are consistent with applicable environmental, health and safety standards of Serbia and IFC''s microfinance exclusion list; and submit to IFC annual environmental performance reports.
Location of environmental documents in locally affected community