Getin Noble Cross Currency Basis Swap

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Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed The EBRD, in 2009, approved currency basis swap to facilitate the merger of Getin Bank (Getin) and Noble Bank (Noble) – together the Company.  The Bank participated in swaps between CHF and PLN for notional volume of CHF 500 million (PLN 1.5 billion), between EBRD and Getin Bank pre-merger, and between EBRD and the Company post-merger.  It was expected that the transaction would enable the Company to focus its resources and management attention on developing new PLN based business. Project Objectives There was a mismatch between the Company’s loan book in foreign currency, and its funding in PLN, where there is limited access to CHF funding.  To manage currency volatility in the year preceding the transaction, the Company had explored opportunities to reduce its exposure to currency swap markets, and resultant foreign currency risk exposure. Transition Impact The transaction was anticipated to support the Company in its business model adaptation, allowing modification to fit the changing macroeconomic environment.  The swap was used to hedge an existing currency mismatch, and reduce the impact of a disrupted market. Additionality Though the transaction did not provide any additional funding to the Company, it permitted the Company’s management to focus resources and attention on development of new and sustainable business plans to facilitate economy-wide recovery from the 2008 financial crisis.  As a result, the EBRD was able to help the Company manage its existing foreign currency exposure, facilitate a transition away from extensive foreign currency loan provision, free up resources to focus on lending in the Company’s core segments, signal general market confidence to the market as a whole, and strengthen environmental and social and anti-money laundering practices in the Polish market. Environmental and Social Summary As a Category FI project, the currency basis swaps were not anticipated to have any adverse environmental or social impacts.  However, the Company was required to perform annual reporting on labour and working conditions, and to maintain enhanced environmental, social and financial control standards. Technical Cooperation n/a - none Implementation Summary The project was completed in 2015.