Moscow, Russia, July 22, 2005 — The
International Finance Corporation, the private sector arm of the World
Bank Group, is investing $10 million equity in Absolut Bank and providing
it with a $15 million mortgage loan.
IFC’s equity investment will strengthen the bank’s capital base and enable
it to expand its operations in the Moscow region and in St. Petersburg.
IFC’s loan will be used to expand the bank’s residential mortgage
lending program in Russia. In addition to financing, the bank will receive
advisory support from IFC on strengthening corporate governance practices
and mortgage lending operations through participating in IFC’s advisory
programs in these areas.
“We are pleased to work with Absolut Bank, a middle sized Russian bank
with increasing regional coverage and a strong market share. Through our
partnership with the bank we contribute further to the development of the
housing finance market – essential to Russia’s economic development and
the well being of millions of Russians,” commented Edward Nassim, IFC’s
Moscow-based Director for Central and Eastern Europe. “This is our first
project with the bank, which we see as the start of a long term relationship,”
“IFC’s strategy in the Russian financial market is to support the growth
of dynamically expanding financial institutions. IFC, through its global
presence, hopes to help Absolut Bank to expand its international relations
throughout the world,” said Jyrki Koskelo, Director of IFC’s Global Financial
Alexander Svetakov, Chairman of Absolut Bank’s Board of Directors, welcomed
IFC as a new shareholder in Absolut Bank. “The fact that this is only
IFC’s second straight equity investment in a Russian Bank makes us proud.
We are convinced that IFC’s equity participation will open new business
opportunities for the bank worldwide.”
Nikolay Sidorov, Absolut Bank’s Chairman of the Management Board, said,
“We are very satisfied that IFC is opening this long-term credit line,
that will help us to develop our mortgage business in the Moscow and St.
Petersburg regions. The due diligence has been very thorough but we benefited
from the experience of IFC.”
Absolut Bank, established by the shareholders of the Absolut Group, is
a well-managed and profitable medium sized bank with total assets of about
$500 million equivalent and equity of $77 million equivalent at December
31, 2004. The bank has established a niche in providing banking services
to medium sized corporates, particularly in trade finance, where it is
a market leader. The bank’s headquarters are in Moscow. It operates four
full service branches in Moscow and a branch in St. Petersburg. The bank’s
expansion plan includes opening ten more branches in 2005 and an additional
ten in 2006 in the Moscow Oblast.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.
Russia joined IFC in 1993. Since then, IFC has committed $ 2.4 billion
in the country, including $245 million in syndicated loans, to finance
more than 100 projects across a variety of sectors. IFC’s portfolio
in Russia stands at $1.7 billion. Currently, Russia is the largest country
exposure in IFC’s global portfolio. IFC’s investments spread across the
country’s most important sectors including banking, leasing, housing finance,
infrastructure, mining, agribusiness, pulp and paper, construction materials,
oil and gas, telecommunications, information technologies, retail, and