Bank equity products and strategy

Strategic priorities

• Sector reform: facilitate bank restructuring and privatisation by sharing equity risk and through restructuring effort; Support consolidation in countries with fragmented banking sectors.

• Institution building: enhance corporate governance by actively participating in supervisory boards, promoting management accountability, sound banking principles and practices and proper environmental practices to instil high quality business attitudes and practices; Increase standards of transparency; Support intra-regional bank consolidations and mergers within the countries of operation; Facilitate the transfer of modern financial skills and technology.

• Work with key strategic investors who are committed to local banking markets.

• Support banks with strong local partners, shareholders and management: in the absence of a strategic investor, the Bank will often develop a targeted technical assistance programme to facilitate a transfer of skills to the institution’s local management.

Products

• Purchase/subscription of ordinary/preference shares (5-35% of capital).

• Provision of convertible senior or subordinated debt.

• Multi Project Facility: EBRD and strategic partner agree to invest alongside in a number of banks/non bank FI subject to satisfactory business plan, terms and conditions.

• New products can be introduced to accommodate existing investee banks' needs. For example, in October 2000, EBRD signed a €13.5 million equity derivative transaction with Pekao S.A. in Poland. This has enabled the client to make a share placement in the stock market at an attractive price.