IFC Invests in Raiffeisen Bank Romania to Boost Access to Finance for SMEs and Green Housing

IFC, a member of the World Bank Group, is providing a financing package of RON720 million ($168 million equivalent) to Raiffeisen Bank Romania to boost financing for small and medium enterprises (SMEs), climate, and housing—three underserved segments in Romania’s economy.

The financing package consists of a RON240 million investment in a Basel III-compliant Tier 2 bond—which will support the Bank’s capital base--and a RON480 million senior loan. The IFC investments will help Raiffeisen Bank Romania expand its lending to SMEs, increase financing for sustainable-energy projects and for mortgages, including green mortgages.

“In addition to helping Raiffeisen Bank strengthen its capital base, the financing will enable the bank to increase its funding of green housing and grow its sustainable-finance business,” said Steven van Groningen Raiffeisen Bank Romania President & CEO. “The financing will also help us to further support SMEs in Romania, which play an important role in creating economic output and job creation but face substantial challenges in accessing finance.”

“This investment is a part of IFC’s capital markets development strategy in Romania,” said Vittorio Di Bello, IFC Senior Manager, Financial Institutions Group, Europe and Central Asia. “It is the first subordinated local-currency bond issue in the Romanian market and clearly signals the progress the country’s capital markets have made over the past few years.”

Raiffeisen Bank Romania is a long-standing IFC client. Since 2004, IFC has provided $61 million financing to the bank through a senior loan for SME finance and by investing in senior bonds issued by the bank.

About Raiffeisen Bank Romania
Raiffeisen Bank S.A., a subsidiary of Austrian Raiffeisen Bank International, is one of the Top 5 largest banks in Romania, with total assets of 42.4 billion lei and revenues of almost 2 billion lei (as of September 30, 2019). The bank services over 2 million individuals, approximately 91,000 SMEs and over 5,750 large and medium corporations. It has over 4,800 employees, 366 agencies (out of which 32 are cashless) and a network of more than 820 ATMs, 22,200 POSs and 290 multifunctional machines (MFMs).

About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org