Financed ProjectsAbsolut Bank

Identification Code:

OP/05/0520

Total Operation Cost:

0

Maturity:

72 months

Operation Status:

Description and Purpose of the Operation:

Provision of a Bank to Bank loan to Absolut Bank for mortgage financing purposes. The proceeds of the Loan shall be used by the Borrower exclusively for the purpose of financing /refinancing residential mortgage loans eligible in accordance with the eligibility criteria. The project aims to support the development of highly demanding and rapidly growing mortgage finance banking sector in Moscow and St. Petersburg regions by means of providing additional alternative source of funds to one of the leading player on the Russian mortgage market - Absolut Bank .

Countries of Operation:

Russia (100,00 %)

Financial Product:

Loans

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

Absolut Bank was established in 1993 and takes 54 position in Top 100 Russian banks. At end 2005 Absolut bank reported total consolidated assets of RUB 27.7 billion (US$962 million) and total equity of RUB 3.0 billion (US$103 million). Absolut bank's principal business activity is corporate and retail banking, financial markets and asset management. The Bank is majority owned by three prominent Moscow entrepreneurs and IFC has 7.5% stake. Its clients mainly are medium and small commercial companies, as well middle class individuals. The core market is Moscow and St. Petersburg regions covered by wide net-work of 40 branches and outlets to be finished in full construction till the end of 2006. Absolut Bank has 730 employees. The bank is financed by other IFIs including IFC and KfW. Absolut is rated by two reputable international agencies -B by Fitch and B1 by Moody's with stable outlooks.

Co-Financiers/Participants:

Guarantors/Sponsors:

Developmental and Regional Cooperation Impact:

The project contributes towards expanding liquidity channeled to the mortgage loan market and increase the accessibility of the local population to up to average social standards housing. It is a mechanism for BSTDB to extend long term mortgage loans to rapidly developing middle-class individuals and to contribute to the social development of Russia. End beneficiaries can not be otherwise accessed by BSTDB directly. BSTDB will support Absolute Bank by providing access to international funding to finance its growing loan portfolio. The proposed Project would assist the Russian government’s strategy to increase construction activity that in turn would contribute to GDP growth, to mobilizing the output of industrial sectors related to construction, and to increasing accessibility of the population to quality housing.

Environmental Classification and Impact (summary):

The Borrower is required to consider specific Environmental, Health & Safety (EH&S) impacts, related to the property to be financed such as site contamination, use of hazardous materials in construction, risk of flooding, land sliding, or seismic activity and compliance with the applicable national construction and EH&S standards and regulations. The Borrower is required also to observe BSTDB's Negative List of Goods and Environmental Exclusion List.

Operation Leader:

Financial Institutions I

E-mail:

fi1@bstdb.org