Press Releases

IFC Provides a $100 million Loan to Moscow Narodny Bank

In Washington DC:
Irina Likhachova

Phone: +202-473-1813        - Fax + 202-974-4312


In the United Kingdom:

Moscow Narodny Bank
Katy Ellis

Phone: +(44) 207 815-9330 - Fax: +(44) 207 782-0520


In Russia:

Moscow Narodny Bank
Dmitri Fedotkin

Phone: +(095) 730-2237 - Fax: +(095) 730-2243


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.