Financed ProjectsAlpha Bank, Romania

Identification Code:

OP/17/0069

Total Operation Cost:

40.000.000

Maturity:

12 months

Operation Status:

Description and Purpose of the Operation:

Alpha Bank, Romania

Countries of Operation:

Romania (100,00 %)

Financial Product:

SME's

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

Short-Term Revolving SME Finance Facility to Alpha Bank, RO

Co-Financiers/Participants:

N/A

Guarantors/Sponsors:

N/A

Developmental and Regional Cooperation Impact:

The project is expected to have modest but favorable economic benefits for the Romanian economy, the most relevant being additional tax revenue gains from increased economic activity under the additional amount provided. Moreover, the additional amount provided will further enhance benefits such as increases in employment, increase in export capacity and competitiveness, and multiplier effects for other parts of the economy in Romania. The regional cooperation element is similarly expected to be modest if at all. Other BSTDB countries are important trade partners for Romania so to the extent that SMEs benefiting from financing from the operation engage in export activities, there will be regional cooperation benefits.

Environmental Classification and Impact (summary):

Alpha Bank Romania has developed and implemented a comprehensive environmental and social (E&S) management system commensurable with its activities and fully integrated in the general portfolio management. It consists of the E&S Risk Policy, Exclusion List, and the E&S risk management procedures, including the guidelines for performance screening standards, definitions and requirements for risk assessment, and risk categorization forms. The analysis of these documents confirmed compliance with the BSTDB’s requirements towards financial intermediaries and were developed based on IFC relevant guidelines. Overall, the E&S management system is well-integrated in the credit cycle and is applied systematically to the entire portfolio. The analysis of 2015 and 2016 portfolio shows that the Borrower is engaged primarily in sectors of limited to low and medium E&S risks. Thus, 50% of the total transactions are loans to individuals represented by consumer loans, mortgages, and credit cards. The rest 50% are represented by the construction sector – 26%, trade – 8%, manufacturing – 4%, and such sectors as mining, energy, agriculture, and shipping account for approximately 10-12%. The operations of medium to high E&S risk were subject to E&S assessment, and included legal documentation review, risk identification and mitigation, monitoring and reporting. The findings of the assessment were reported to be duly translated in the legal agreements as E&S terms and conditions of financing. The Borrower is also involved in financing sectors, which are restricted by the BSTDB E&S Exclusion List, namely alcohol production, but this accounted for less than 1% of the total portfolio.

Operation Leader:

Financial Institutions I

E-mail:

fi1@bstdb.org