Moscow, June 9, 2003—The International
Finance Corporation (IFC), the private sector financing arm of the World
Bank Group, signed an agreement today to provide a five-year $100 million
loan to Moscow Narodny Bank (MNB).
This is the largest loan IFC has provided for Russia so far. The loan will
help Russian companies to access medium-term financing, and will
provide MNB additional opportunities to do business in Russia. The ability
of MNB to access medium-term funds from a multilateral institution of the
IFC’s standing also helps the Bank enhance its international credit rating.
The progress towards this objective has already commenced with Fitch’s
upgrade of MNB to investment grade status last month. This loan to
MNB is an integral part of the privatisation process which is being initiated
by the Central Bank of Russia, the current majority owner of the Bank.
“We believe that the loan will help MNB to access other sources
of funding and will broaden Russian exporters’ access to affordable medium-term
credit. Russian companies’ growth is constrained by the lack of
term financing which is needed to upgrade and expand production. IFC’s
strategy is to stimulate growth in the financial sector to support the
country’s economic development”, commented Mr. Edward Nassim, IFC’s
Moscow-based Director for Central and Eastern Europe.
Mr. Igor Souvorov, Moscow Narodny Bank, Chairman and Group Chief Executive
said “The loan allows MNB to further develop its core specialization
in structured trade finance. Proceeds will be used specifically to
finance the medium-term borrowing needs of Russian private sector companies.
MNB has a long and successful track record in catering to these clients,
many of whom could also be direct clients of the IFC”
Moscow Narodny Bank is headquartered in London. It was established and
incorporated in London in 1919 to facilitate trade with Russia. Its activities
are regulated by the Financial Services Authority (FSA). With offices in
Russia, Singapore and China, the bank provides capital markets banking
services to a broad range of customers mainly in Russia. As of December
31, 2002 MNB's total assets amount to $1.8 billion; with equity of $440
million, the bank posted a profit of $26 million. MNB has long term
ratings of BBB- from Fitch and Ba1 from Moody’s.
The mission of IFC is to promote sustainable private sector investment
in transition economies, helping to reduce poverty and improve people's
lives. IFC finances private sector investments in the emerging markets,
mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956 through FY02, IFC has committed more than $34 billion of its own
funds and arranged $21 billion in syndications for 2,825 companies in 140
developing countries. IFC's worldwide committed portfolio as of FY02 was
$15.1 billion for its own account and $6.5 billion held for participants
in loan syndications.
Russia joined IFC in 1993. Since then IFC has invested over $911 million
of its own funds to finance about 70 projects across a variety of sectors.
IFC significantly increased its investment program in Russia in the last
fiscal year (July 1, 2001 – June 30, 2002), investing $315 million in
20 projects worth $741 million. IFC’s increased activity reflects
the improving investment climate in Russia, greater opportunities in an
increasingly broad range of sectors, and stronger foreign investor interest.