ZAO Raiffeisenbank Austria
MIGA has issued a guarantee of $102 million to Raiffeisen Zentralbank Österreich AG (RZB) for a subordinated shareholder loan to its subsidiary ZAO Raiffeisenbank Austria (Raiffeisenbank) in the Russian Federation. The coverage is for a period of up to seven years against the risks of expropriation and transfer restriction.
RZB has lent $107 million under a subordinated loan agreement to its Russian subsidiary, Raiffeisenbank, a fully licensed commercial bank offering its clients a complete range of domestic and cross-border operations. The loan will be used by Raiffeisenbank to increase its Tier II capital, support private sector operations, and finance anticipated loan growth in the country.
This project supports a leading foreign bank in Russia and is expected to contribute to the strengthening of the country’s financial sector, which has a low level of foreign investment. Foreign banks, such as Raiffeisenbank, can introduce international best practices, advanced risk management systems, operational know-how and training in countries with relatively weak and fragmented financial sectors. By supporting the expansion of Raiffeisenbank's high-quality services, this project will benefit consumers and have a demonstration effect on Russian banks.
The project is in-line with the World Bank’s country assistance strategy for Russia, one of the key objectives of which is to increase effective financial intermediation and opportunities for entry and growth of new enterprises.