Hypo Vereinsbank - Serbia & Montenegro

completed

_x000C_The proposed investment would enable HVB Bank Serbia and Montenegro (HVB, the bank or the company) to address its long-term funding needs including the areas of mortgages and SMEs. Current term loans in the Serbian market have typical tenures of three to four years. The Bank therefore has approached IFC for funding with longer tenor to be able to expand its long-term lending. HVB Bank Serbia and Montenegro a.d. was established in 2001. The Bank is a member of the HVB Group through Bank Austria Creditanstalt (BA-CA). BA-CA owns 99% of the shareholding of the Bank. It is being geared by BA-CA to become a universal bank offering a variety of products. As of December 2004, it had total assets of EUR202 million, shareholders’ equity of EUR21 million, and total liabilities of EUR181 million of which deposits totaled EUR133 million. For the year 2004 its ROAE and ROAA were 23% and 2.5% respectively.