Project description
and objectives:
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The proposed project would consist of the EBRD's participation in UPI Banka's capital increase for an amount of around EUR 2.4 million and extension of a second credit line in the amount of EUR 2.5 million.
The capital increase is aimed at supporting UPI Banka’s medium term business plan and revised strategy, which envisages an increase in lending activities, branch expansion and IT system development.
The credit line will ensure that UPI Banka is able to increase its medium-term lending to the SME sector.
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Transition impact:
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The proposed operation will contribute to transition by supporting the implementation of UPI Banka’s new strategy and business plan. The strengthening of this financial intermediary is important to improve the level of competition within a financial system in need of additional restructuring and consolidation. Further long and medium term lending to SMEs is also needed to ensure that financial resources provided to local enterprises are channelled within sound banking business principles.
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The client:
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UPI Banka was established in 1972 as part of a large holding company whose activity was production, processing and sale of agricultural products. In December 1991 the bank split from the conglomerate and was established as an independent joint stock bank. As of end-2001, UPI Banka had total assets of KM 138.9 million (EUR 71.0 million) and total equity of KM 19.1 million (EUR 9.9 million).
UPI Banka has been a client of the EBRD since 1999 through its participation in the SME Framework Facility for Bosnia & Herzegovina for an amount of EUR 2.5 million and in the Trade Facilitation Programme.
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EBRD finance:
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EBRD financing will consist of an equity participation of around KM 4.6 million (EUR 2.4 million) and an extension of the second SME credit line of EUR 2.5 million under the Extended SME Framework Facility for Bosnia & Herzegovina.
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Total project cost:
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The total amount of the capital increase will be around KM 6.7 million (EUR 3.4 million). The total amount of the Extended SME Framework Facility for Bosnia & Herzegovina, which will be offered to a number of banks in the country, is EUR 15.0 million.
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Environmental impact:
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The financial intermediary is required to continue to comply with the Bank's environmental requirements for Financial Intermediaries which include, inter alia, (i) adopting and implementing environmental due diligence procedures; (ii) ensuring borrowers comply with national environmental, health and safety standards at a minimum; (iii) complying with the FI Exclusion List and (iv) submitting an annual environmental, health and safety report to EBRD.
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Technical
cooperation:
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A TC project will be structured to assist UPI Banka in improving its risk management both in assets and liabilities area and credit risk (subject to separate approval by the EBRD's management).
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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EBRD contact:
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Tajana Mrkic, Operation Leader: mrkict@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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