ISTANBUL, June 27, 2005— The International Finance Corporation, the private sector arm of the World Bank Group, today announced the signing of a $50 million subordinated debt investment in Turk Ekonomi Bankasi. The investment will strengthen the bank’s tier-2 capital and boost its lending to small and medium enterprises and retail customers across Turkey.  

IFC’s financing complements an investment by BNP Paribas, which became a joint venture partner of Turk Ekonomi Bankasi earlier this year. BNP Paribas’ global expertise will enable Turk Ekonomi Bankasi to leverage IFC’s investment effectively and become one of the leading players in Turkey’s banking sector.

Khosrow Zamani, IFC’s director for Southern Europe and Central Asia, said, “We are very pleased with this investment, which further strengthens our relationship with Turk Ekonomi Bankasi. This project is a key element in IFC’s strategy of advancing the Turkish banking sector by supporting well-managed financial institutions and enabling their operational expansion with a focus on the corporate sector and SMEs.”

Jyrki Koskelo, IFC’s director for Global Financial Markets, added, “The transaction builds on IFC’s previous investments in Turk Ekonomi Bankasi as we continue to assist the bank in enhancing its institutional capacity.  The investment highlights our use of innovative structures to meet the needs of our clients in an effective way.”

Varol Civil, general manager of Turk Ekonomi Bankasi, said, “We have had a long and fruitful relationship with IFC over the years.  This investment underscores IFC’s strong confidence in our bank and will enable us to expand lending operations significantly, particularly to SMEs and retail customers.”

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.