OREANDA-NEWS. December 23, 2008. The EBRD is providing a US75 million subordinated loan to one of the largest Ukrainian banks, Raiffeisen Bank Aval (RBA). The ten-year loan will increase the bank’s capitalisation and strengthen the balance sheet by providing long-term funding, boosting the bank’s overall financial strength, reported the press-centre of EBRD.

The project is part of the EBRD’s efforts to contribute to the process of recapitalisation of Ukraine’s banking system facing a difficult operating environment and lack of access to international markets. Support of RBA is especially important as it will boost the market confidence and facilitate financial intermediation and lending to the real economy in Ukraine.

Raiffeisen Bank Aval, a subsidiary bank of Raiffeisen International Bank-Holding AG is one of the largest Ukrainian banks with 1,180 outlets across the country. It provides services to over than 4 million individual clients, 196 thousand SME clients and over 9 thousand corporates.

According to Alexander Pavlov, Head of Financial Institutions Ukraine: “The EBRD is demonstrating its commitment to Ukraine’s banking sector in difficult times by helping address sector’s increased capitalisation needs and supporting transparent and market-oriented players. The EBRD’s new financing of the country’s financial sector in 2008 has reached USD500 million, significant part of which was delivered already during the market turbulence.”

In response to the global crisis, the EBRD announced plans for a substantial increase in its operations next year. The Bank is planning to increase its investments in the region by 20 per cent thus bringing it up to seven billion euros in 2009. The focus of the 2009 investments will be on central and eastern Europe, the Western Balkans and less advanced countries in the Caucasus and in Central Asia.

The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of November 2008, it had committed over EUR3.97 billion through 163 projects.