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Projects

Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
HBZ Bank, South Africa
Project ID
1258
Fiscal year
2012
Status
Active
Guarantee holder
Habib Bank AG Zurich
Investor country
Switzerland
Host country
South Africa
Environmental category
FI
Sector
Banking
Date SPG disclosed
February 28, 2012
Project Board date
March 15, 2012
Gross exposure
 $12.3 million
Project type
Non-SIP

This summary covers an equity investment by Habib Bank AG Zurich (HBZ) in its subsidiary HBZ Bank, South Africa (HBSA). HBZ has applied for a MIGA guarantee of CHF11.25 million (US$12.3 million). The guarantee is for a period of up to 20 years against the risks of currency inconvertibility and transfer restriction and expropriation.

HBZ’s equity investment will support the expansion of its branch network and commercial banking operations in South Africa. HBSA focuses on providing small to medium businesses in the manufacturing, property, retail / wholesale, and service sectors with deposit and cheque facilities, long and short term financing and trade finance facilities. It also offers Islamic banking services and products.

Environmental Categorization

The project is a category FI under MIGA’s Policy on Social and Environmental Sustainability.

Development Impact

HBSA’s focus on trade financing contributes to the increase in South Africa’s exports, which provides a boost to the country’s economic growth. In addition, Islamic banking products provide access to financing and banking services to a large portion of previously unbanked Muslim population of South Africa. The investment also supports the development of small and medium-size businesses, a large portion of the bank’s clientele, that might otherwise find it more difficult to obtain financing for their operations.

 
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