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IFC APPROVES US$8.2 MILLION FOR ESTABLISHMENT OF DEMIRBANK ROMANIA


Amy Conran
Phone: (202) 473-9119
Fax: (202) 974-4384
E-mail: aconran @ifc.org


WASHINGTON, D.C., Nov. 24—The International Finance Corporation (IFC) today signed an investment agreement to take an equity stake of 20 percent for US$3.2 million in Demirbank Romania. In addition, IFC has approved a term loan of US$5 million to Demirbank Romania, which will use the IFC financing to provide a full range of commercial banking products including working capital, trade finance, and equipment acquisition for medium-sized Romanian enterprises. Mr. Suleyman Demirel, the President of Turkey, was present at the ceremony marking the establishment of Demirbank Romania.

A major focus of Demirbank Romania's activities will be servicing Turco-Romanian trade and investment flows. The bank will be involved in trade finance, treasury and foreign exchange operations, corporate lending, and retail banking. In addition, Demirbank Romania will offer products such as letters of credit and guarantees and credit facilities to its clients.


"The increased pace of reforms undertaken by the Romanian government has awakened foreign investor interest in the country and prompted a need for strong financial intermediaries to support international trade and business flows," said Mr. Harold Rosen, Director of IFC's Europe Department. "Demirbank Romania, as a well- capitalized and professionally-managed bank, will help meet this need by providing modern and efficient banking services which, in turn, is expected to boost investor confidence in the Romanian banking system."


Demirbank Romania is a joint-venture bank between IFC, Demirbank Turkey, and several Romanian investment funds. Demirbank Turkey will provide technically trained and experienced management to the bank. The Romanian investment funds, which have links to much of the Romanian corporate sector, will support the development of the bank's marketing activities. Demirbank Turkey, which is one of the oldest private banks in the Turkish banking sector, is active in commercial lending, trade finance, investment banking, capital markets and money market operations in the region. Demirbank Turkey has had a long relationship with IFC, which has arranged two syndicated loan to the bank for a total of US$90 million. Moreover, Demirbank Turkey invested alongside IFC in Romlease, Romania's first leasing company, and Demir Krygz, a joint-venture bank in the Kyrgyz Republic managed by Demirbank.


Present at the opening ceremony were President Demirel; Mr. Halit Cingillioglu, Vice-Chairman and Managing Director of Demirbank Turkey; Mr. Ali Ayanlar, Board Member; Mr. Selahattin Serbest, President and CEO of Demirbank Turkey; Mr. Selcuk Saldirak, General Manager of Demirbank Romania; as well as Mr. Luc Albinski and Ms. Selma Barroso of IFC.


IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.