The EBRD’s Board of Directors has approved a €50 million credit to Zagrebacka banka dd (ZABA) in Croatia in order to support the Croatian economy in response to the global economic crisis.
The loan is part of the EBRD’s response to the global financial crisis, providing a flow of finance to the real economy in Croatia at a time of scarce alternative commercial funding.
Subject to the conclusion of legal documentation, the loan to ZABA, a subsidiary of the Italian banking group UniCredit, would be one of the first of several loans planned by the EBRD to systemically important Croatian banks to help them continue financing private sector clients during the crisis.
The EBRD is also in discussions with production companies in Croatia to assist them with working capital and balance sheet restructuring to better manage their finances in this challenging period.
“This investment acknowledges the increasingly important role the SME sector in Croatia is playing in the overall development of the country. It is crucial to carry on funding small businesses during the crisis period,” said Charlotte Ruhe, the EBRD’s Director for Croatia.
"The loan provided by the EBRD will be used for the development of small businesses, a segment in which Zagrebacka banka is the Croatian leader. Thus, even in the times of crisis, we are increasing our focus on support to this very important segment of economy. Funds from this credit line will be used to support our clients’ development projects which are economically viable, and raise the quality and volume of their operations, especially in tourism, agriculture and services that further the quality of life in general.", said Franjo Lukovic, CEO of Zagrebacka banka.
The five-year credit is part of a joint initiative with the UniCredit group to continue investing in Eastern Europe and so keep funding open to the real economy.
The EBRD is making investments worth a total of €432.4 million in UniCredit subsidiaries across eight eastern European countries, as part of a joint effort to tackle the impact of the global economic crisis on the region. The aim is to provide medium and long-term debt and equity financing through UniCredit subsidiaries in support of SMEs, lease finance and energy efficiency projects.
UniCredit is the largest banking group in the central and eastern European region, with over 4,000 branches in 19 countries. The group has invested around €10 billion of equity in central and Eastern Europe and has around €85 billion of total customers loans in the region. Beside its own funding programs to its subsidiaries, it cooperates with international institutions including the EBRD in order to ensure continuing support to the local economies during these challenging times.
The EBRD investment is part of the joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide over €24 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.