Port Moresby, Papua New Guinea, June
24, 2010—In its largest investment in the Pacific region to date,
IFC, a member of the World Bank Group, and IFC Capitalization Fund signed
an agreement to invest $140 million in Bank South Pacific (BSP) to help
expand financial services and bolster the bank’s presence across the Pacific
islands.
IFC is supporting the bank’s long-term
growth plans by buying a five percent stake from the Independent Public
Business Corporation of Papua New Guinea, a government-owned investment
body, while the IFC Capitalization Fund is acquiring another five percent
of shares by subscribing to newly issued shares of BSP. The total share
purchase will be for up to $110 million.
In addition, IFC is providing a long-term
$30 million senior loan, enabling BSP to participate more fully in foreign
currency lending opportunities.
“IFC’s financial commitment reflects
its confidence in our bank’s strength and growth strategy,” said Ian
Clyne, BSP’s Managing Director. “Its investment and technical expertise
that will be available via targeted technical assistance programs will
further build and diversify our capital and customer base, allowing us
to position ourselves as a leading provider for banking services in the
Pacific.”
BSP is Papua New Guinea’s largest retail
and commercial bank with operations extending to the Pacific islands of
Fiji, Niue, and the Solomon Islands. With IFC’s support, BSP will
broaden services to small to midsize businesses and to rural clients by
expanding innovations such as mobile phone banking. Efforts also
will be made to create professional development opportunities for the bank’s
staff.
“IFC is pleased to partner with BSP
to help extend financial services to customers who may otherwise not be
able to obtain the financing needed to do business and improve living standards,”
said Karin Finkelston, IFC Director for East Asia Pacific. “As IFC’s
biggest investment in the Pacific to date, it represents a significant
milestone for us in the region and we look forward to working with the
shareholders to achieve the bank’s growth aspirations.”
Promoting sustainable and inclusive
growth by expanding access to finance is a priority for IFC in Papua New
Guinea. Through integrated investment and advisory services, IFC helps
build the private sector to create jobs, raise living standards, and reduce
poverty.
The $3 billion IFC Capitalization Fund,
founded by IFC and the Japan Bank for International Cooperation (JBIC),
is a global equity and subordinated debt fund that aims to support banks
considered vital to the financial system of an emerging market country.
By supporting systemic institutions, the fund aims to speed up economic
recovery and boost job creation while reducing the impact of the global
financial crisis. The fund is managed by IFC’s Asset Management Company.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing capital for private enterprise, and providing advisory and risk
mitigation services to businesses and governments. Our new investments
totaled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
About BSP
Headquartered at Port Moresby, BSP
is PNG's largest retail and commercial bank with 35 branches in PNG and
overseas branches in Niue (1), Fiji (20) and the Solomon Islands (8) making
it one of the largest businesses in the Pacific. BSP currently holds in
excess of 50% of the market share of both deposits and loans in PNG, 30%
of the market in the Solomon Islands, and nearly 20% of the market in Fiji.
As at 31 December 2009, BSP held total assets of K8.1 billion (Group K9.4
billion). BSP is a publicly listed company incorporated in PNG and
its shares are listed on the Port Moresby Stock Exchange. Its shares are
widely held by individuals, companies and financial institutions, the majority
of which are PNG nationals. Standard & Poor’s have rated BSP
as B+ Stable. More information on BSP is available at www.bsp.com.pg.
About IFC Asset Management Company
The IFC Asset Management Company LLC
(AMC) is a subsidiary of IFC and was established to manage third party
capital in the form of private equity funds. The AMC mobilizes third party
capital and allows outside investors to benefit from IFC’s expertise in
achieving strong equity returns as well as development impact. It also
manages the IFC Capitalization Fund. For information about IFC Capitalization
Fund, visit http://www.ifc.org/ifcext/about.nsf/Content/FinancialCrisis_CapFund.
About Japan Bank for International
Cooperation
JBIC is the international wing of the
Japan Finance Corporation (JFC), Japan’s policy-based financing institution
established on October 1, 2008. It succeeded International Financial Operations
of former JBIC and will continue to use the name of JBIC to maintain international
trust and confidence it has gained. JBIC provides policy-based finance
with a mission to contribute to the sound development of the Japanese and
international economy, including finance responding to disruptions in financial
order in the international economy. For more information, visit www.jbic.go.jp.
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