The European Bank for Reconstruction and Development has provided a credit line of EUR 150 M to the United Bulgarian Bank, a subsidiary of the National Bank of Greece.
The credit line is intended to boost crediting for the business sector; the Romanian and Serbian subsidiaries of the National Bank of Greece – Banca Romaneasca and Vojvodjanska Banka. Each of them is getting a credit line of EUR 100 M from the EBRD.
"The support for the banks and the real economy in Bulgaria, Romania, and Serbia is of great importance for boosting the economic recovery," commented Nick Tesseyman, the Managing Director in charge of the Financial Institutions sector at the European Bank for Reconstruction and Development.
In his words, the new agreement will provide a constant flow of credits to the private companies; at the same time, the EBRD is satisfied with the expansion of its cooperation with the National Bank of Greece.
The credit package that the EBRD is providing to the subsidiaries of the Naitonal Bank of Greece in Bulgaria, Romania, and Serbia is part of a joint plan of the EBRD, the World Bank, and the European Investment Bank adopted in February 2009; under it, the three international financial institutions committed to provide EUR 24.5 B within two years for the recovery of the economies in Eastern Europe.
In October 2010, the EBRD signed credit loan contracts with the Bulgarian subsidiaries of two other Greek banks, Pireaus Bank and Eurobank EFG last week.
Back then Stefka Slavova, the EBRD Director for Bulgaria, Poland, and Albania, announced that the EBRD will provide a total of EUR 300 M for credit lines to three Bulgarian subsidiaries of Greek-owned banks - the United Bulgarian Bank (UBB, owned by the National Bank of Greece), Pireaus Bank, and Eurobank EFG.
The first transfer of EUR 150 M under the agreements will be granted to the three banks by the end of 2010, and the second half of the money is expected next year.
"The money will be mostly for crediting. These are not funds for the recapitalization of these three Greek banks, these are resources for the crediting of small and medium-sized enterprises. These banks are in a good condition at the moment and don't need recapitalization. All three of them have the largest market shares in Bulgaria, and operate in the entire Balkans. They are present in Romania, Serbia, Albania. If the funds are not absorbed, the second transfer could be canceled. The board will consider the second transfer in 2011, most likely," explained Slavov back then.
During its four-day visit to Bulgaria in October, members of the EBRD board announced that by the end of 2010 the institution's investment will reach the record annual figure of EUR 500 M.