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EBRD takes equity stake in Union Bank
Investment to strengthen Albanian bank’s expansion and lending activities
The EBRD is acquiring a 12.5 per cent equity stake in Albania’s Union Bank (UB), to support the further development of the bank’s lending activities and its strategy for rapid growth not only in Albania, but also in neighbouring countries.
The equity financing comes under the EBRD-Italy Western Balkans Local Enterprise Facility, which provides individual investments of up to €8 million. In addition to the EBRD finance, it is envisaged that UB will also benefit from a €650,000 of consultancy assistance for institution building financed by technical cooperation funds.
Since its establishment in 2006, UB has been growing steadily and today has a network of 25 branches across the country. This makes UB one of the largest bank networks in Albania, with a significant presence in the local market and a wide product offering.
Following the transaction, the EBRD will be represented with a director on the bank’s Board. The involvement of the EBRD is expected to help further strengthen UB’s governance standards, organisational structure, policies and procedures.
Signing the agreement, EBRD First Vice-President Varel Freeman said the investment will strengthen a promising bank in Albania and have a positive impact on the country’s financial sector by increasing competition and setting higher standards of corporate governance and business conduct. “The EBRD will not only bring capital but also its experience, expertise and know-how to this new partnership”, he added.
Union Bank Chairman, Edmond Leka, in his speech welcomed EBRD's investment in UB as a very positive contribution to the strengthening of the bank's capital and business. "We are confident that Union Bank's strong Albanian roots and local knowledge will be complemented by EBRD's European background and expertise in transition countries".
The EBRD-Italy Western Balkans Local Enterprise Facility is an investment facility established by the EBRD with financial contributions and support from the Italian government. WB LEF is contributing to the economic recovery in the Western Balkans through the provision of mainly equity and quasi equity financing to small and medium local enterprises.
The EBRD is the largest institutional investor in Albania, having invested more than €380 million in a number of important sectors, including national infrastructure, the financial sector and the private corporate sector.
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