By (The news item "MIGA plans to issue guarantee of up to EUR50 mln for capitalization of Ukraine’s Raiffeisen Bank" issued on December 16 has been updated, extended)
KYIV. Dec 19 (Interfax-Ukraine) – The Multilateral Investment Guarantee Agency (MIGA) from the World Bank Group plans to provide guarantees in the amount of up to EUR50 million for the additional injection by Raiffeisen Bank International AG (RBI) into its Ukrainian subsidiary Raiffeisen Bank.
The purpose of the proposed MIGA guarantee is to help RBI reduce risk on some of its assets, resulting in a reduction in RBI’s risk-weighted assets (RWA) on a consolidated basis. The released RWA is expected to help Raiffeisen Bank maintain lending, thereby supporting employment and economic activity in the country at war, the agency said.
According to the report, RBI has submitted an appropriate application to the agency to cover the risks of expropriation of funds, which is necessary to cover the mandatory cash reserves for a period of one year and one day.
The MIGA Board of Directors will consider this project on December 20, the agency points out.
As of September 2022, Raiffeisen Bank’s loan portfolio included retail loans – about 10%, loans to large/medium corporations – 78% and loans to small and medium businesses – 12%. The portfolio of large/medium corporations is dominated by short-term working capital and trade finance loans with a limited number of long-term project finance loans. The main supported sectors include wholesale and retail trade, agriculture (agribusiness, livestock and crop production) and food and beverage production.
Raiffeisen Bank in terms of assets (UAH 169.19 billion) as of the end of October ranked fourth among all 67 operating Ukrainian banks. Its net profit for the ten months of this year amounted to UAH 2.51 billion.
The shareholders in October sent a net profit for 2021 in the amount of UAH 4.873 billion to the reserve fund, with the exception of UAH 700,000 for the payment of dividends on preferred shares. The bank’s retained earnings at the end of last year amounted to UAH 790 million.
RBI at the end of last year owned 68.21% of the shares, another 30% – the European Bank for Reconstruction and Development.
Earlier, First Deputy Prime Minister – Economy Minister Yulia Svyrydenko noted that MIGA plans to launch two pilot investment projects by the end of this year – one domestic and one foreign investor – with war risk insurance.
