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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
NBG Central Bank Mandatory Reserves Coverage in Serbia
Project ID
Fiscal year
Guarantee holder
National Bank of Greece S.A.
Investor country
Host country
Environmental category
Date SPG disclosed
January 29, 2014
Project Board date
March 21, 2014
Gross exposure
 $232.3 million
Project type

Project description

This summary covers investments by the National Bank of Greece S.A. (NBG) in its subsidiary in Serbia, Vojvodjanska Banka a.d. Novi Sad. The investor has applied for a MIGA guarantee of  €170.0 million ($232.3 million equivalent) for a period of up to three years against the risk of expropriation of funds for mandatory reserves held by these subsidiaries.

Athens-based National Bank of Greece S.A. is a universal banking group with a network of retail banks across Southeast Europe and Turkey. NBG’s subsidiary banks abroad are required to maintain mandatory reserves at the central banks in their respective jurisdictions, generally based on the volume of customer deposits that these subsidiaries hold. The subsidiary banks are thereby exposed to the risk of expropriation of funds by their respective central banks. This exposure leads to higher risk weights on assets, resulting in increased capital allocation for country risk exposure. At this level, the risk weighting determines the amount of equity required to maintain a specified capital adequacy ratio in accordance with Greek banking law.

Environmental Categorization
The project is a category FI-2 under MIGA’s Policy on Social and Environmental Sustainability. 

Development impact

MIGA’s proposed guarantee will help NBG obtain  relief from the  capital adequacy requirements by reducing the risk weighting for the mandatory reserves maintained by NBG’s subsidiary in Serbia. This will free up equity tied up for country risk purposes and allow NBG’s subsidiary to extend more credit that will stimulate growth, generate employment, and reduce poverty in the country.

MIGA’s proposed coverage to NBG is consistent with the goals of the crisis response initiative for the Europe and Central Asia region launched by the World Bank Group in January 2012. As part of the initiative, MIGA seeks to support capital-constrained banks active in the region. The project is also aligned with the World Bank Group’s strategy for Serbia, as the country seeks to address the spillover from the financial crisis.

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