25000 - NBG/Finansbank

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Summary of Proposed Investment

Project Number

25000

Company Name

QNB Bank AS

Date SPI Disclosed

May 26, 2006

Country

Greece

Industry

Financial Markets

Projected Board Date

Jun 26, 2006

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Nov 16, 2006
Signed : Jan 24, 2007
Invested : Apr 4, 2007

Project Description

The proposed project involves IFC acquiring minority equity stake in Finansbank in Turkey (the Bank), in view of National Bank of Greece (NBG) major acquisition of the Bank. NBG was recently selected as the winning bidder to acquire a controlling stake in the Bank. The acquisition of Finansbank by NBG represents a positive development in the economic relations between Turkey and Greece, and one of the largest cross-border investments in the Mediterranean region, further building investor confidence and facilitating cross-border investments in the region. Given Finansbank’s leading position in SME, housing and retail lending, NBG’s acquisition would further strengthen a banking institution that contributes greatly to economic growth and employment in the region.

Furthermore, the combination of NBG and Finansbank will result in the largest banking group in the region present in seven countries with a total combined population of 125 million and a customer base of over 11 million, with the ability to support and finance large regional development initiatives.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	275.0

Development Impact

The alliance of Finansbank with a strong well-established financially sound EU-based banking entity will help develop closer industry ties between the EU and Turkey and further promote Turkish and EU convergence. The acquisition will also improve Finansbank’s funding costs as well as increase NBG’s balance sheet leverage. Finansbank will have more headroom for further growth for its lending in the SME, housing, and retail segments. In Turkey, the SME sector is currently under-banked but critical to support as it accounts for over 60% of the country’s employment and represents over 90% of its manufacturing base. The housing market is also just beginning to develop in Turkey and is growing rapidly and has substantial potential for yet further growth, thereby enhancing the availability of residential mortgages and increasing home ownership.

IFC is expected to play a number of important roles in the project: provision of transitional and local knowledge support; and effective and long-lasting intervention to manage sector and country risk; support of SME, housing, and retail sectors in Turkey; and the expansion of cross-border investments.

Contacts

For Inquiries About the Project, Contact

Mr. Agis Leopoulos, General Manager
38-40 Panepistimiou Street, 106 79 Athens, Greece
Tel. No +30-210-369-5970
Fax. No:+30-210-369-5424

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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