29189 - TCB Syndication

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Summary of Proposed Investment

Project Number

29189

Company Name

TRANSKAPITALBANK

Date SPI Disclosed

Apr 19, 2010

Country

Russian Federation

Industry

Financial Markets

Projected Board Date

May 20, 2010

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Jun 9, 2010
Signed : Jun 18, 2010
Invested : Jul 30, 2010

Project Description

TCB is a medium-sized bank ranked 54th in the Russian Federation by size of net assets and 38th by size of loan portfolio as of 1st January 2010. TCB was established in 1992 with its core focus on mid-sized corporates, SMEs, and trade finance. The Bank is one of top 10 private commercial banks in trade and structured finance in Russia, with volume of trade transactions of USD 300 mln in 2008. TCB’s current international rating by Moody’s Investor Service is B1, with a stable outlook.

TCB is seeking to raise financing of a minimum of $120 million for general corporate purposes to be used to maintain and expand its general lending to corporate (including trade finance transactions and SME lending) and retail customers (the “Project”).

The EBRD A Loan and IFC A Loan will have equal amounts and have substantially similar terms. EBRD and IFC will jointly syndicate the minimum of $60 million B Loans, which shall be funded through separate EBRD and IFC participation agreements with participating financial institutions on a pro-rata basis

Sponsor / Cost / Location

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

Development Impact

High, on account of:
- Strong signal to the market as this project marks the return of a 2nd tier private bank to the syndicated loan market
- Strengthen TCB™s capital structure and its ability to support its existing and future SME and trade finance clients
- The project would have a strong demonstration effect as it would help international lenders restore back confidence in the Russian banking sector.

IFC is uniquely positioned to add value to this Project. Due to the following:
1-Without IFC and EBRD involvement, it would be impossible for TCB to attract investors through the syndicated loan market at this point in time.
2-Wholesale funding in Russia is scarce and without IFC’s and EBRD’s A loan and B loan the Bank would have difficulties in raising funds and financing business growth.
3- Strengthening TCB''s credibility in accessing debt funding from the international market

The proposed project has been classified category FI according to IFC’s Environmental and Social Review Procedure. The loan proceeds will be used to finance TCB’s SME clients and trade finance activities. TCB will be required to ensure compliance of the activities financed with the IFC Exclusion List, Russian Environmental and Social laws and regulations, and the IFC Performance Standards. IFC will review the environmental and social risks of TCB portfolio and the clients’ existing capacity to manage such risks. In addition, due diligence will be carried out on the Bank’s HR policies and practices to determine compliance with IFC’s Performance Standards 2: Labor and Working Conditions, and if needed to provide recommendations to address any gaps. As a condition of IFC investment, TCB will be required to develop and commit resources to implement a Social and Environmental Management System (SEMS) and to provide annual environmental performance reports (AEPRs) to IFC.

Contacts

For Inquiries About the Project, Contact

Sergey Sisoshvili
Transcaptialbank
Vice President, International Business

Tel: +7 495 797 3200 (ext.1377)
Fax: +7 495 797 3200 (ext.1230)

ssm@transcapital.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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