PROJECT

Projects

Summary of Proposed Investment

Project Number

24700

Company Name

NLB BANKA

Date SPI Disclosed

May 5, 2006

Country

Serbia

Industry

Financial Markets

Projected Board Date

Jun 5, 2006

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

FI

Previous Events

Approved : Jun 12, 2006
Signed : Jun 14, 2006
Invested : Aug 8, 2006

Project Description

The project consists of up to €20 million ten-year senior loan to NLB Continental Banka and possibly an equity investment representing a 10% stake (about €5 million) in NLB Continental Banka a.d. (the bank). The equity investment is subject to the approval of NLB’s Supervisory board. The purpose of IFC project is to assist the bank in expanding its retail and consumer lending, in addition to enabling it to extend term financing for SMEs and mortgages, particularly within Novi Sad in the Vojvodina region, the second largest economic center in Serbia & Montenegro. The bank is the fifth largest commercial bank in Vojvodina (16th in Serbia, measured by total assets), serving over 150,000 customers, in retail and to corporate customers. The bank has traditionally focused on corporates and industries involved in foreign trade, whilst its new strategy emphasizes retail banking, mainly in the Vojvodina region. The relationship between IFC and the bank started in 2004 when the bank took over three old IFC’s senior loans from 1980’s following the debt restructuring of the State of Serbia. After the restructuring of Serbia’s Paris and London Clubs’ loans, the State became the majority shareholder of the bank with a 98.5% stake. It was offered for sale in a privatization tender in early 2005, and the purchase was made by Nova Ljubljanska Banka (NLB d.d., Slovenia) in July 2005.

Sponsor / Cost / Location

Development Impact