Banca Comerciala Romana Mortgage Loan II

complete

The proposed project is a senior loan to Banca Comerciala Romana (BCR), the largest commercial bank of Romania, to support development of long-term lending to individuals for real estate investment purposes. This project follows up on a previous Mortgage Loan I signed in January 2003 and successfully implemented by BCR. The proposed loan will be used in 2005/2006 for extending residential mortgage sub-loans to individuals from all over Romania. The transaction will support BCR in strengthening its position in the Romanian market by providing long-term financial resources to match its long-term mortgage lending. In this way, BCR will be able to continue building a mortgage portfolio of significant size so as to permit securitisation when market conditions will be appropriate and legislation will be in force. Mortgage lending is at a growth stage in Romania and the EBRD loan will increase provision of long-term funding available in the banking sector. It will allow an increasing number of people to access bank financing for purchasing, renovating and/or constructing residences. BCR is the largest Romanian bank, with a 26% market share of total banking assets at June 2005, total assets of some EUR 7.3 billion, total equity of over EUR one billion and net profit of some EUR 123 million (RAS, unaudited). BCR is currently owned by the Romanian state (represented through AVAS) with a 36.8% share, by EBRD and IFC (each of them having a participation of 12.5% plus one share) and by 5 Romanian private investment funds (SIFs) and employees with a total shareholding of 38.2%. BCR is currently under privatisation with a deadline of 17 October 2005 for binding offers from the 9 reputable international investors. EUR 50 million Credit Line in three tranches to BCR to be on-lent by BCR to private individuals as residential mortgage loans. EUR 50 million. BCR will continue to implement the EBRD’s Environmental Procedures for Residential Mortgage Lending for all mortgage loans under the credit line. The procedures require that a survey be undertaken for each loan considered to ensure, among other things, compliance with applicable national environmental, health, safety and public disclosure standards and regulations. BCR benefited for TC funding back in 2000-2003 funded by the EU under the SME Finance Facilities. No TC is proposed for this transaction. Mrs. Cornelia Busca, Executive Manager E-mail: corneliab@bcr.ro Phone: +40 21 310 27 85 Fax: +40 21 313 12 46