OREANDA-NEWS. November 29, 2010. The EBRD signed a loan agreement with the Open Joint-Stock Company “Bank Saint Petersburg” (“Bank Saint Petersburg”) under which it will provide USD 65 million to fund the small business lending programme of the largest private bank in Russia’s North-West. The three-year loan is to be disbursed in a single tranche, reported the press-centre of EBRD.

Bank Saint Petersburg will use the money to advance local currency loans of up to three years to small and medium-size businesses in St. Petersburg and the surrounding region. Only privately-owned firms employing no more than 250 people and whose annual turnover does not exceed the equivalent of EUR50 million (USD 66.5 million) will qualify for these sub-loans.

Accessing funding remains an acute problem for small businesses in Russia, particularly following the economic and financial crisis which hit the country in 2008. With the market beginning to recover, however, Bank Saint Petersburg anticipates growing demand from borrowers in the small and medium-size enterprise sector, hence its request for new EBRD funding to support growth of its loan portfolio.

The EBRD advanced its first loan to Bank Saint Petersburg in 2006, a USD 30 million three-year facility for on-lending to the small and medium-size business sector. In 2008, the EBRD extended the relationship with a syndicated loan through which it raised USD 100 million for the bank.

In 2009, the EBRD, as part of its anti-crisis response, provided Bank Saint Petersburg with a USD 75 million subordinated loan to strengthen its capital base. The full amount of that loan is due to be repaid in 2019.

Bank Saint Petersburg is a publicly listed company whose shares are traded on Russia’s MICEX and RTS exchanges. The majority of its shares are held by the bank’s management. As of end-June 2010, it ranked as Russia’s 16th largest bank in terms of assets.

It is a universal bank which has traditionally focused on providing services to industrial companies in St. Petersburg and their employees. As part of its diversification strategy, the bank is now aiming to increase the volume of its small business loans as well as to lengthen the maturity of its small business portfolio.