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Projects

Project Brief

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
Joint Stock Commercial Bank Ukrsotsbank
Project ID
7585
Fiscal year
2008
Status
Active
Guarantee holder
Bank Austria
Investor country
Austria
Host country
Ukraine
Environmental category
FI
Sector
Banking
Date SPG disclosed
May 27, 2008
Project Board date
June 12, 2008
Gross exposure
 $142.5 million
Project type
Non-SIP

View Summary of Proposed Guarantee


MIGA has issued a guarantee of $142.5 million to Bank Austria, a member of UniCredit Group, covering its shareholder loan to Joint Stock Commercial Bank Ukrsotsbank (USB) in Ukraine. The coverage is for a period of up to 11 years against the risks of transfer restriction, expropriation, and war and civil disturbance. 

The project involves a subordinated shareholder loan of $150 million from Bank Austria to USB, Ukraine’s fourth largest bank. Bank Austria is responsible for UniCredit Group’s operations in central and Eastern Europe and is USB’s direct parent company. The loan will increase USB’s regulatory capital which will strengthen the bank and allow it to grow in a sustainable manner. USB has a well-developed and expanding customer franchise and plans to further develop its retail and SME banking business. 

One of the two pillars of the World Bank Group’s country partnership strategy for Ukraine is sustaining growth and improving competitiveness. This encompasses the need to deepen the financial sector and to improve its stability in order to facilitate business growth and spur private investment. Foreign participation in Ukraine’s banking sector is also expected to lead to a rapid transfer of product and credit-risk management expertise.

 
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