EBRD - European Bank for Reconstruction and Development

03/26/2024 | News release | Distributed by Public on 03/26/2024 04:40

EBRD and Privredna banka Zagreb sign €75 million risk-sharing facility

  • EBRD extends risk-sharing facility of up to €75 million to Croatian bank PBZ
  • Bank will risk-share PBZ's corporate, SME loan exposure
  • EBRD to guarantee up to 65 per cent of each sub-loan

The European Bank for Reconstruction and Development (EBRD) is launching a new risk-sharing framework for Croatian banks, with Privredna banka Zagreb d.d. (PBZ), part of the Intesa Sanpaolo Group, the first to benefit.

The framework is designed to allow the EBRD to share partner banks' exposure to local enterprises, be they large companies or small and medium-sized enterprises (SMEs), through an unfunded risk participation. The EBRD will guarantee up to 65 per cent of each individual sub-loan provided by PBZ to eligible clients. The Bank's commitment under the agreement could reach up to €75 million.

The risk-sharing framework is one of three core financing frameworks of the EBRD's Small Business Initiative - a programme dedicated to supporting and developing local private companies. The EBRD offers partner banks funded or unfunded risk participation mechanisms by co-financing and guaranteeing the partner bank's loans to eligible companies.

Mark Davis, EBRD Regional Director for Central Europe, said: "We are pleased to partner with PBZ to expand financing opportunities for growing companies. The EBRD's risk-participation mechanism will enable PBZ to manage capital and risk concentration and facilitate credit growth for the benefit of the real economy."

Dinko Lucić, President of the Management Board of PBZ, said: "PBZ has been a strong, long-standing partner of the EBRD through various programmes. We are delighted to be the first bank in Croatia to participate in this new risk-sharing framework. Recognising the need for a more flexible and customised approach, with this programme, we aim to enhance our risk-taking capacity and obtain capital relief, thereby responding to the challenges that private companies, both large enterprises and SMEs, face in obtaining favourable financing."

The Intesa Sanpaolo Group is one of the largest banking groups in Europe. PBZ is the second-largest bank and financial group in Croatia by assets, with a market share of around 20 per cent in various operating segments. It is a market leader in many areas, such as cards and new technologies, continuously developing innovative products and services for retail, corporate and SME clients.

PBZ is also a centre of excellence for many areas of banking within the International Subsidiary Banks Division of the Intesa Sanpaolo Group. It, therefore, became a regional banking hub following the acquisition of the majority stakes of Intesa Sanpaolo banks in Bosnia and Herzegovina and Slovenia.

Strengthening private-sector competitiveness and supporting local SMEs through indirect financing, including risk-sharing facilities, are among the EBRD's key priorities in Croatia. One of the largest institutional investors in the country, the EBRD has invested more than €4.7 billion in 248 projects in Croatia - over €300 million of it in 2023 - largely in the private sector.