OREANDA-NEWS. May 19, 2008. UkrSotsBank, one of Ukraine’s largest banks owned by the UniCredito Group will receive a \\$75 million loan from the European Bank for Reconstruction and Development for financing long term residential mortgage loans. The loan has the longest possible, ten-year, tenor available for a Ukrainian bank, reported the press-centre of EBRD.

Loan proceeds will be on-lent to individual Ukrainian borrowers to finance purchasing, constructing, renovating and repairing their residential property in the country. In the context of this transaction UkrSotsBank is going to apply the EBRD Standards for Mortgage Lending, which will enhance its underwriting standards and allow expansion of the portfolio based on liabilities of matched maturity.

At least fifty per cent of the loan will be used by UkrSotsBank to develop the mortgage lending outside Kiev, where access to long-term finance is difficult. The bank has a good regional network and thus well positioned to fulfil this role and increase financial intermediation in the regions.

According to Jean Marc Peterschmitt, EBRD Director for Bank Relationships, this project is completely in line with the EBRD’s strategy for the development of mortgage market in Ukraine. “Promotion of best international practices in mortgage lending and support of standardisation of mortgage product are pivotal for the successful development of the secondary mortgage market in this country”, he said.

The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of January 2008 it had committed over ?3,2 billion through more than 161 projects.