IFC, the investment arm of the World Bank, will discuss the approval on May 12 of a loan worth 30m euros for Banca Transilvania.
Half of this sum is granted over a ten-year period and will go to financing mortgages, while the rest will be released over a seven-year period, and will finance small and medium-sized enterprises.
Both loan components are going to be RON-denominated.
IFC is an established financer of Banca Transilvania, together with the EBRD, which is also the main shareholder in the lending institution.
Through its new loan, the IFC wants to support the biggest Romanian bank to boost access to financing for important segments of the market it considers are still insufficiently served despite the efforts made by the entire banking system.
"These market segments include low and medium-income individuals that want to take out mortgages and SMEs, particularly those located in border areas," reads the financing projects submitted to IFC board for approval.
The institution's experts consider expanding access to financing in border areas for the above-mentioned market segments is vital in order to improve Romania's financial infrastructure. "This process will be crucial in terms of supporting Romania's EU integration, which represents a key element in the strategy of the World Bank's group," state IFC experts.
In late 2006, IFC approved another loan, worth 15m euros, over a seven-year period, in order to strengthen BT's capital base, as well as to boost its capacity to finance SMEs and the mortgage market.
BT in late 2007 ranked fourth in the system in terms of the size of held assets.
Last week, the bank contracted a line of credit worth 20m euros from DEG German fund. The funds will be used to the same purpose of sustaining lending activity on the segment of SMEs, where the bank has specialised in recent years, but also in retail financing.
Institutions such as DEG, IFC or the EBRD are the main sources of foreign currency financing BT can rely on, because it does not have a strong banking group as its majority shareholder.
Despite the difficult international background, the three international financial institutions continue to support the Romanian bank, with EBRD's presence in its shareholder structure providing a degree of credibility.
On the other hand, BT can this year count on almost 180m euros it gained from the sale of its BT Asigurari subsidiary and the 25% stake in Asiban.
As regards RON resources, the bank has one of the biggest networks on the market, with over 475 branches, which grants access to an important retail customer base.
This year BT wants to boost assets by 40%, to 19.4bn RON (the equivalent of 5.5bn euros).
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