Press Releases

IFC ASSISTS IN PRIVATIZATION OF FYR MACEDONIAN BANK —Project to restore confidence in financial sector—

L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384

WASHINGTON, D.C., Mar. 6- The International Finance Corporation (IFC) has approved an equity investment of about US$5.4 million for a 15 percent shareholding in Stopanska Banka, Former Yugoslav Republic of Macedonia's largest financial intermediary.  As part of this privatization, Erste Bank of Austria will invest about US$9 million for a 25% stake and it is expected that the European Bank for Reconstruction and Development (EBRD) will seek approval for an additional 15% stake.  Collectively, the new investors will own 55% of Stopanska Banka, with 45% in the hands of local Macedonian entities, making this the largest foreign direct investment in the country since its independence.

Stopanska Banka is the main bank in FYR Macedonia.  Its transfer to new management and ownership is the cornerstone of the government's reform plan for the financial sector.  The privatization is expected to improve the Bank's corporate governance, overall management systems and controls, as well as help in restoring confidence in the financial sector, which, in turn, is likely to have a major positive impact on the real sector, domestic savings and economic growth.

IFC's Board also approved a loan of twenty million Deutche Marks (DM20,000,000) which will enhance Stopanska's capacity for long- and medium-term lending and enable it to address the financing needs of small and medium companies as well as larger enterprises.  Technical assistance by Erste Bank will bring Stopanska in line with international standards and raise the banking sector's level of service by reducing systemic risk.

Mr. Harold Rosen, Director of IFC's Central and Southern Europe Department said he hoped that the privatization and restructuring of Stopanska Banka would create a model institution and encourage other foreign and domestic investors.  Mr. Rosen also noted that while IFC took the lead role in advancing this deal, the cooperation between the EBRD, the World Bank, and IFC was another key factor in bringing this transaction to fruition.

Erste Bank is the largest privately owned bank in Austria.  It focuses on retail banking and has plans for expansion into Eastern Europe.  The acquisition of Stopanska is a key part of that strategy.

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 and transitioning economies.  IFC's activities in FYR Macedonia include a combination of technical assistance and direct investments.  The Corporation has a local presence in Macedonia and has developed projects in textiles, tourism, glass and construction material industries.  To date, IFC has approved five investments (including Stopanska Banka) totaling US$29 million in the country.  IFC looks forward to increasing the scope of its activities in FYR Macedonia and elsewhere in the region.