OREANDA-NEWS. September 24, 2009. The EBRD and Raiffeisen International Bank-Holding AG are teaming up to help strengthen banks in Ukraine, Romania and Russia and help address the impact of the international financial crisis on the real economies of these three countries, reported the press-centre of EBRD.

The EBRD’s Board of Directors approved a EUR150 million financing package for three subsidiaries of Raiffeisen International, complementing the group's own continued provision of capital and funding of its banks in eastern Europe.

Under the package, subordinated loans attributable to Tier 2 capital will be provided as follows: EUR 100 million equivalent to Raiffeisen Bank Aval in Ukraine, EUR 25 million to Raiffeisen Bank in Romania, and EUR 25 million equivalent to Raiffeisenbank in Russia. The loans to the Ukrainian and Russian subsidiaries will be supplied in dollars.

Through this project the EBRD is supporting an important international group with a strong commitment to the region. The aim of the subordinated credits is to strengthen the capitalisation of Raiffeisen International's network banks in order to support their lending to enterprises.

“This transaction is a continuation of our successful partnership with Raiffeisen International. It reinforces the commitment of the EBRD and of Raiffeisen International to the region during this challenging period. Maintaining the stability of the banking sector is a crucial component of the response to the international crisis.” said EBRD President Thomas Mirow.

"The decisive actions taken by the EBRD were very supportive for the region. They contributed significantly to stabilizing Central and Eastern Europe and to cushioning the impact of the financial crisis on the transformation process. In addition to our own operational alignment, the financing package will strengthen our subsidiaries, which is also for the benefit of the local economies", said Herbert Stepic, CEO of Raiffeisen International.

The funding offered by the EBRD is part of a coordinated package for Raiffeisen International, alongside the European Investment Bank and the World Bank Group, amounting to a total of up to €1 billion.

The investment is part of the joint pledge by the three international financial institutions to provide over EUR 24.5 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.

So far this year, the EBRD has committed over EUR 2.2 billion to the financial sector in the countries where it invests. As a result of increased demand for the Bank’s assistance, the EBRD is raising the level of its overall investments to up to EUR 8 billion this year.