24308 - RI Facility II

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Summary of Proposed Investment

Project Number

24308

Company Name

AO RAIFFEISENBANK

Date SPI Disclosed

May 12, 2005

Country

Central Europe Subregion

Industry

other

Projected Board Date

Jun 14, 2005

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

FI-1 - Significant

Previous Events

Approved : Jun 9, 2005
Signed : Jun 27, 2005
Invested : Aug 17, 2005

Project Description

The project entails a loan facility of up to $200 million (the “Facility”) to support Raiffeisen International Bank-Holding AG (Raiffeisen International or “RI”), a holding company whose primary shareholder is Raiffeisen Zentralbank Österreich AG (“RZB”). Raiffeisen International currently holds controlling stakes in 15 banks and several other finance companies in Central, Eastern and South Eastern Europe, namely in Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Kazakhstan, Kosovo, Poland, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia and Ukraine. RI’s assets amount to EUR 28.9 billion as of December 31, 2004, with aggregated shareholders equity of EUR 1.84 billion, which due to an initial public offering of its shares in April 2005 increased to EUR 2.39 billion.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	205.0
Equity

Development Impact

Through this investment IFC will support RI’s efforts in Central and Eastern Europe which since 1998 has increasingly focused on the most frontier markets in the region. RI has a strong commitment to the region and has in many cases been one of the first foreign banks to invest. Unlike many other foreign banks in the region, RI has developed a clear focus on local customers and expanded beyond the major cities into smaller cities and towns which are often neglected by international banks.

IFC’s financing is expected to help RI’s network banks and finance companies expand their lending capacity to SMEs, thus supporting a key sector for economic growth. RI is currently one of the leading providers of SME loans in the region, and its network banks have adopted a strategy to grow their SME business. In addition by earmarking a significant portion of the Facility to the housing finance, this investment will spur the growth of the housing sector in the region. It will also help develop the financial markets of each borrower country by expanding an important asset class such as mortgages, which could be securitized in the future and provide an important investment vehicle for fixed income investors (including pension funds).

This is an FI Type 1 project. Raiffeisen International will be required to develop an environmental management system to ensure that relevant operations meet host country environmental and social requirements. Through the life of the investment, IFC will continue to evaluate Raiffeisen International’s capacity in this regard.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Francis Kalitsi
International Finance Corporation
2121 Pennsylvania Avenue
Washington DC, 20433, USA.

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

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