Transcapitalbank Equity Participation

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The proposed project is an equity participation in the capital of Transcapitalbank (TCB). It is envisaged that EBRD will acquire 25%+1 of the capital of TCB. The Bank will subscribe to newly issued shares in the context of a capital increase. In October 2008, EBRD subscribed for the additional new shares as part of the first capital increase to support and strengthen TCB’s balance sheet in the difficult market environment. The bank retained its shareholding in TCB at 25%+1 share. EBRD is considering participating in TCB’s second capital increase to further strengthen its tier 1 capital. The Bank will subscribe to newly issued shares in the context of a capital increase. As a result of this capital increase, EBRD’s shareholding is expected to increase from 25%+1 share stake to up to 30%. The main rationale for the Bank’s involvement in this Project is to provide support to a strong medium-sized bank with good potential to develop further its regional outreach and provide high quality services to SMEs and retail customers. The capital increase will enhance TCB’s ability to overcome the economic downturn with minimal damage to its business, retain and further strengthen market position to the extent possible and, ultimately, emerge as a stronger financial institution in the aftermath of the crisis. TCB was established in 1992 as a universal bank and is currently owned by senior management and a number of medium-sized private companies and private individuals. TCB has been headquartered in Moscow from the beginning of its operations, but it has always had a strong regional presence, with around 50% of loan portfolio placed outside Moscow. TCB will be required to comply with EBRD’s Environmental Procedures for Intermediated Finance through local banks across all of its lending operations, including ensuring compliance with the applicable national environmental, health and safety and labour legislation, adherence with EBRD’s Environmental Exclusion and Referral List, appointment of a member of senior management with overall responsibility for the implementation of environmental procedures and submission of annual environmental reports to the Bank. EBRD’s investment is supported by an existing TC project in the amount of EUR 300,000 financed by EU Commission under the Russian Regional Banks Institution Building Programme. Mrs. Olga Gryadovaya, Chairperson Fax: (7 495) 797 3201 E-mail: info@transcapital.com Web site: www.transcapital.com