This project is still under review by the EWS. Project information and/or project analysis may be incomplete.
RBI Central Bank Mandatory Reserves Coverage (MIGA-1435)

Countries
  • Albania
Where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Bank Risk Rating
FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Mar 30, 2015
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Raiffeisen Bank International AG
The holder of the loan, grant, or other investment.
Investment Amount (USD)
$ 111.20 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ MIGA website

Disclosed by Bank Feb 26, 2015


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Project Description
On March 31, 2015 MIGA issued a guarantee of €103.6 million ($111.2 million equivalent) covering equity investments by Raiffeisen Bank International AG (RBI) in its subsidiary in Albania, Raiffeisen sh. a. (Raiffeisen Albania). The coverage is for a period of up to three years against the risk of expropriation of funds. Vienna-based RBI is a universal banking group that has operated for over 25 years in up to 15 markets with a network of retail banks across Central, Eastern, and Southeastern Europe. RBI’s subsidiary banks abroad are required to maintain reserves at the central banks in their respective jurisdictions, generally based on the volume of customer deposits that these subsidiaries have. This exposure leads to higher risk weights on assets at the consolidated level, resulting in increased capital allocation for country risk exposure. At the consolidated level, the risk weighting determines the amount of equity required to maintain a specified capital adequacy ratio in accordance with Austrian banking law. MIGA’s guarantee will help RBI obtain relief from the capital adequacy requirements by reducing the risk weighting for the mandatory reserves maintained by RBI’s subsidiary in Albania. This will free up equity tied up for country risk purposes and allow RBI’s subsidiary to extend more credit that will stimulate growth, generate employment, and reduce poverty in the country. MIGA’s coverage to RBI is consistent with the goals of the crisis response initiative for the Europe and Central Asia region launched by the World Bank Group in January 2012. As part of the initiative, MIGA seeks to support capital-constrained banks active in the region. The project is also aligned with the World Bank Group’s strategy for Albania, as the country seeks to address the spillover from the financial crisis.
Investment Description
  • Multilateral Investment Guarantee Agency (MIGA)
Contact Information
ACCOUNTABILITY MECHANISM OF MIGA The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/