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KENTBANK OF TURKEY, IFC AND EBRD JOIN FORCES IN ALBANIA'S FIRST FINANCIAL SECTOR PRIVATIZATION


L. Joseph (IFC) and Véronique Cassegrain (EBRD)
Tel:+ 1 202 473 7700
ljoseph@ifc.org
and +44 20 7338 7237
Cassegrv@ebrd.com


WASHINGTON, D.C., June 8, 2000—In support of the first financial sector privatization in Albania, the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and Kentbank of Turkey (KB) are joining forces to privatize the National Commercial Bank.
NCB's privatization will help restore confidence in the banking system, upgrade corporate governance, and increase mobilization of savings. It will also add to competition in Albania's banking sector, enhance industry standards, and provide better service to customers, especially to small and medium private businesses. In addition, the project will include a significant transfer of banking technology and skills.
NCB was established in January 1993 as the result of a merger of the National Bank and the Commercial Bank. In 1998, the Albanian government moved to privatize NCB with World Bank assistance to restructure the balance sheet, finance the appointment of consultants to manage NCB in the interim, and overview the privatization process. NCB's privatization is also an important element of the structural reforms supported by the IMF program in Albania.
Following their acquisition of NCB, IFC and the EBRD will each make an equity investment of US$2 million in NCB and Kentbank will provide US$6 million in equity.
Albania's Minister of Finance, H.E. Mr. Anastas Angjeli said at the signing, "The project will restore confidence in the Albanian banking system, which has been growing strongly in the past three years. The transfer in NCB's ownership to the private sector represents an important step in the government's economic reform program."
Mr. Peter Woicke, IFC's Executive Vice President, noted at the signing, "IFC is pleased to be associated with this project. This is Albania's first financial sector privatization and has great significance for the banking industry and for the country. It will strengthen NCB's corporate governance and overall management systems and controls and have a positive impact on domestic savings and economic growth."
Mr. Charles Frank, the EBRD's Acting President, said, "This will be the first major privatisation in the country since the collapse of the communist regime in the early 1990s. Its success will act as a stimulus for the privatisation of other state-owned companies in the country. This investment is in line with the EBRD's aim to develop a sound banking sector in a well-regulated and competitive environment, geared towards serving the needs of small and medium-sized enterprises."
Mr. Mustafa Süzer, Chairman of Kentbank, said, "Kentbank's acquisition of the majority stake in NCB demonstrates its firm commitment to Albania's economic growth and development. It also establishes a presence in the Balkans in accordance with Kentbank's strategy to become a major regional bank in the area."
Kentbank was established in 1992 by the Süzer Group, one of the larger industrial groups in Turkey, and the fourth largest in terms of capital. Its main shareholder is Süzer Holding, which owns 98 percent of the share capital. Kentbank's focus is on corporate and retail banking. It has 91 branches in Turkey and plans to increase this number to 100 in the next year.
The EBRD was established in 1991 to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. It is owned by 61 shareholders – 59 countries, the European Investment Bank and the European Community – and operates with €20 billion in authorised capital.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will 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. IFC's financial sector strategy in Albania includes bank privatization, development of new financial intermediaries and products, and support to small and medium businesses as well as micro-enterprises.