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.