EBRD lends USD 150 million to "Raiffeisen" Ukraine

The European Bank for Reconstruction and Development (EBRD) and "Raiffeisen Bank Aval" JSC on Friday signed an agreement for a subordinated loan of 150 million US dollars, intended to bolster the capitalization of the Ukrainian division of "Raiffeisen International Bank".

The agreement is part of the long-term financing program previously announced for the

This project is part of the EBRD"s previously-announced long-term financing program for Raiffeisen International"s network banks in Ukraine, Romania and Russia.

The ten-year subordinated loan will support Raiffeisen Bank Aval"s capital base, thus boosting the overall financial strength of the third largest bank in Ukraine.

This latest EBRD loan is a continuation of the international financial institution"s support for the Ukrainian banking sector during the financial crisis. That support has reached over USD 700 million since the beginning of 2009..

"This subordinated loan provides additional proof of the deep commitment that both Raiffeisen International and the EBRD have to the Central and Eastern Europe region. By providing Raiffeisen Bank Aval with additional resources, this transaction also serves to strengthen Ukraine"s banking sector and benefits the country"s economy," said Herbert Stepic, CEO of Raiffeisen International."

Raiffeisen Bank Aval, which has over 1,000 business outlets across Ukraine, services nearly 4.8 million customers in both the corporate and private individual segments

"Raiffeisen International" recently announced it would continue to lay off staff in Ukraine.

According to Martin Gruell, the company"s financial manager, the bank lay off more employees in Ukraine, as the country is the "weak spot" of the Austrian bank.

"Raiffeisen" Ukraine posted losses in the last four quarters. The Austrian bank announced in February it would lay off 10% of its 18,300 Ukrainian employees.

"Raiffeisen International" will inject 115 million dollars in "Raiffeisen Bank Aval" Ukraine by the end of January 2010.