The European Investment Bank (EIB) today signed an agreement with Erste Group Bank AG (Erste Group) whereby it will provide finance totalling EUR 440 million for small and medium-sized enterprises (SMEs) in Central and Eastern Europe (CEE) via four subsidiaries of Erste Group: Ceska Sporitelna, Erste Bank Oesterreich, Erste Bank Hungary and Immorent.
The agreement will facilitate SMEs’ access to medium and long-term financing on advantageous financial terms, thus helping them to cushion the impact of the current global downturn. To this end, the EIB will grant loans to four Erste Group subsidiaries, which in their turn will distribute the funds to SMEs across CEE.
The projects signed comprise the following loans:
- via Ceska Sporitelna EUR 200 million to finance SME projects in the Czech Republic;
- via Erste Bank Oesterreich EUR 100 million to finance SME projects in Austria;
- via Erste Bank Hungary EUR 40 million to fund SME projects in the field of environmental protection, energy savings, infrastructure (including health and education, industry, services and tourism) in Hungary;
- via Immorent EUR 100 million to finance SME projects in the Czech Republic, Hungary, Slovakia, Poland, Romania, Bulgaria, Slovenia and Austria.
EIB Vice-President Matthias Kollatz-Ahnen commented: “This lending operation is the European Investment Bank’s contribution to the coordinated effort involving other international financial institutions – the European Bank for Reconstruction and Development and the World Bank – to provide up to EUR 24.5 billion to support investment by SMEs, which has been hit by the global economic crisis in Central and Eastern European. The EIB will contribute EUR 11 billion to this package, mainly in the form of lending to SMEs via banking partners. To that end it has joined forces with Erste Group which, through its well-established CEE branch network and expertise, will be best placed to pass this EUR 440 million in financial support on to SMEs in the region.”
Erste Group’s CEO Andreas Treichl stated: “In the current turbulent climate more than ever, we need to ensure that SMEs have improved access to financing, so that they can continue their activities. As long-term investors in CEE, both Erste Group and the EIB are well aware of their responsibility to ensure a continuous flow of lending to the real economy.”
All the loans referred to are new types of loans, in line with the EIB’s priority of strengthening its support for Europe’s SMEs to help mitigate the effects of the current financial crisis. In this context, the EIB will simplify its procedures and increase the scope of the financing by also covering intangibles and working capital of SMEs. Through the direct transfer of the advantageous funds to the final beneficiary, the EIB is increasing both its transparency and effectiveness.
Background on the European Investment Bank:
The mission of the EIB, the European Union’s bank promoting European objectives, is to contribute to the integration, balanced development and economic and social cohesion of the Member States.
The EIB is committed to provide some EUR 11 billion in SME lending facilities in Central, Eastern and Southern Europe, of which EUR 5.7 billion is already available for rapid disbursement, with a further EUR 2.8 billion approved by the end of April 2009 and further tranches expected to follow. The EIF, the EIB Group's venture capital and SME guarantee arm, is also aiming to increase its activities in the region over the next two years.
EIB lending amounted to EUR 8.2 billion in the EU-12 during 2008 and EUR 3.4 billion in the candidate and potential candidate countries. The lending target for the whole region (EU 12 plus candidate and potential candidate countries) is about EUR 15 billion, confirming the EIB’s position as the biggest lender in the region.
Background on Erste Group:
Erste Group was founded in 1819 as the first Austrian savings bank (“Erste österreichische Spar-Casse”). In 1997, Erste Group went public with a strategy to expand its retail business into Central and Eastern Europe. Having always focused on retail and SME business, today Erste Group is one of the largest financial services providers in Central and Eastern Europe. More than 52 000 employees serve 17 million customers in 3 000 branches in eight countries (Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, Serbia, Ukraine). As at 31 March 2009 Erste Group had EUR 199.1 billion in total assets, with a net profit of EUR 232.1 million and a cost-income ratio of 53.8%.
Background on Erste Group’s subsidiaries in CEE granting EIB loans:
Ceska Sporitelna is the largest bank in the Czech Republic, with almost 11 000 professional employees serving over 5m retail customers, small and medium-sized enterprises, municipalities and large corporate customers in more than 600 branches. Its total assets amounted to CZK 862.2 billion and net profit to CZK 15.81bn as at 31.3.2009.
Erste Bank Oesterreich, together with the Austrian savings banks, is the second-largest provider of financial services in Austria. Approximately 16 000 employees serve 2.8 million customers in almost 1 000 branches. Their market share in Austria is roughly 20%.
Erste Bank Hungary has grown to be one of the biggest banks in the Hungarian market in terms of its branch network and number of customers. It serves nearly 900 000 customers in its nationwide network of 204 branches and operates more than 400 ATMs and about 300 POS terminals. As at 31 December 2008 Erste Bank Hungary had HUF 2 630 billion in total assets and showed a net profit of HUF 32.3 billion. In 2008 Erste Bank Hungary was voted “The Most Engaging Bank” in the MasterCard ‘Bank of the Year’ competition.
IMMORENT is the international leasing, real estate and project development specialist of Erste Group, offering a complete range of equipment and real estate financing and other services. IMMORENT has about 800 employees in Austria, the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Serbia, Bulgaria, Poland (IMMORENT representation), Romania, Ukraine, Montenegro and Northern Italy.