Washington DC, November 5, 2001—The
International Finance Corporation (IFC), the private sector arm of the
World Bank Group, has signed an agreement to invest EUR 1 million in Raiffeisenbank
Jugoslavija A.D., a newly established bank that will provide services to
local enterprises, small and medium-sized companies and international joint
ventures in the Federal Republic of Yugoslavia (FRY).
The investment fits in with IFC’s strategy of strengthening local financial
institutions in FRY in order to support the private sector, which is currently
underserved by existing institutions. Sustained private sector access
to credit and other financial services is an essential element of economic
growth and sustainable job creation.
Raiffeisenbank Jugoslavija was established on April 11, 2001 with initial
capital of EUR 10 million. The main sponsor of the project, the Austrian
RZB Group (Raiffeisen Zentralbank Österreich AG), is the head institution
of the second largest banking group in Austria. In 2001, the RZB Group
was awarded “Best Bank in Central and Eastern Europe” by Global Finance
magazine and “Bank of the Year in Central and Eastern Europe” by The
Banker. The IFC investment will represent 10% of the share capital
of the bank.
“IFC is committed to supporting and strengthening FRY’s financial sector
to enable it to provide the much-needed financing to fuel the growth of
the industrial sector,” said Mr. Khosrow Zamani, Director of IFC’s Southern
Europe and Central Asia Department. “We are very pleased to further
develop our relationship with the RZB Group, which started back in 1986
when our institutions were partners in Unicbank Rt., Hungary, today known
as Raiffeisen Bank Rt.,” he added.
RZB’s Deputy Chairman, Herbert Stepic added, “Wherever we go we act as
a local bank doing business predominantly with local clients. With the
IFC as a partner we will further improve our already good position of attracting
small and medium sized companies.”
The establishment of the bank is a notable event for FRY’s banking and
enterprise sector. The success of the bank will have an important
demonstration effect. The RZB Group will introduce western banking
techniques into the local market, which will strengthen local banking practices
and enhance private sector development, thus facilitating economic growth
and helping to fight poverty.
In May 2001, the World Bank Executive Board confirmed FRY’s succession
to the membership of the former Socialist Federal Republic of Yugoslavia.
Following its membership to the World Bank, FRY’s membership
in IFC was confirmed. Since then, IFC has played an active role in
FRY. IFC has assessed business sectors with potential, including
banking, agribusiness, garments, pharmaceuticals, telecom/information technology.
IFC intends to provide the country with strong support for restarting
the flow of investment capital, which will be the driving force for the
country’s economic recovery.
RZB has a long term strategy for CEE, where it runs 13 banks with a comprehensive
regional network of more than 400 banking outlets and over 300 further
business locations of its specialized subsidiaries. The twelve CEE
countries covered are: Hungary, Poland, Slovakia, the Czech Republic, Croatia,
Bosnia and Herzegovina, Bulgaria, Romania, Russia, the Ukraine, Yugoslavia
and Slovenia (representative office). The balance sheet total of
RZB’s “Network Banks” in CEE has grown in 2001 by approximately 30 per
cent to EUR 9 billion as of the end of June. The RZB Group employs
a staff exceeding 10,000 in the region.
IFC’s mission 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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than US$31 billion of its own funds and
arranged US$20 billion in syndications for 2,636 companies in 140 developing
countries. IFC’s committed portfolio at the end of June 2001
was US$14.3 billion.