BSP is PNG's largest retail and commercial bank with assets of US$3.15 billion (as at December 31, 2009).  The Bank also has an investment banking subsidiary, BSP Capital Limited. BSP has a dominant market position in PNG with approximately 50% of loans and deposits.  Its sound domestic banking franchise is underpinned by 40 branches and supplemented by its electronic banking capability, which includes 154 ATMs and more than half a million retail customers. BSP is a publicly listed company incorporated in PNG.  BSP's shares were listed on the local stock exchange POMSoX on 27 August 2003. The Government of PNG directly and indirectly controls 36.07% of BSP’s shareholding as follows: Direct shareholding: Independent Public Business Corporation (“IPBC”): 23.49% Indirect shareholding: Motor Vehicles Insurance Ltd: 11.63% (Government-owned) Credit Corporation (PNG) Ltd: 0.51% (Motor Vehicle Insurance Ltd has a 5.52% shareholding in Credit Corporation, which holds 9.20% of BSP) Southern Highlands Provincial Government: 0.44% The remaining shareholding of the Bank is held by local funds and companies and individual shareholders who have subscribed to the listed shares of the Bank on PomSox. Shareholders who own 10% or more of the Bank’s shares include a superfund Nambawan Super Limited - 10.66% and a local company Petroleum Resources Kutubu Limited - 10.12%. Other shareholders comprise 44.10% of the Bank.

The IFC investment consists of: an equity investment of up to 10% in BSP; and an A loan of up to US$30 million for IFC’s own account

140.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity	110.0

* These investment figures are indicative

BSP is headquartered in Port Moresby and has a wide network of branches in PNG and overseas in Niue, Fiji and the Solomon Islands.

The project is expected to achieve a strong development impact through promoting and enabling growth of the financial services sector in the Pacific. This should include the following: Increasing access to finance for MSMEs; Widening the client base for the bank; Introduction of innovative technology in non urban areas; Providing additional longer term USD liquidity within the system; and Diversifying the shareholder base of the bank.

IFC’s additionality would stem from its ability to partner with a strong regional player and jointly provide quality financial services to an underserved market segment.

This Project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure, and would need to ensure that all investments are consistent with the IFC FI, Trade Finance and/or Microfinance Exclusion Lists and with the applicable National Environmental and Social Laws and regulations and/or IFC Performance Standards. The Bank has developed its own health, safety and environmental policy and currently has no portfolio exposure to the IFC Exclusion List. The Bank has committed to reinforcing its existing social and environmental management system (“SEMS”) and incorporating the SEMS within the Bank’s credit policies, and procedures and IT/MIS systems. It will assign a SEMS officer to be responsible for overseeing implementation of the SEMS.