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22.10.04

IFC and EBRD invest€ 100 million each in Raiffeisen International.

Increase of equity to support Raiffeisen Internationals dynamic growth in Central and Eastern Europe

The International Finance Corporation (IFC), the private sector arm ofthe World Bank Group, and the European Bank for Reconstruction andDevelopment (EBRD) signed agreements with Raiffeisen ZentralbankOesterreich AG (RZB), each to subscribe 100 million to a capital increase of RZBs subsidiary Raiffeisen International Bank-Holding AG (Raiffeisen International). The IFC and EBRD investments correspond to a share of 4 per cent each in Raiffeisen Internationals equity. The 200 million in new capital will support the growth of Raiffeisen Internationals business in Central and Eastern Europe. As previously announced, Raiffeisen International is continuing preparations for an IPO, which are expected to be completed within the first six months of 2005, in order to be ready to respond flexibly should market conditions prove favorable for an IPO.

IFC Executive Vice President Peter Woicke commented,Raiffeisen International contributed significantly to the development of the banking industry in Central and Eastern Europe and continues to do so. There is a strong strategic fit between Raiffeisens and IFCs priorities in the region. Our investment will supportRaiffeisens expansion in markets that continue to be underserved. It will help Raiffeisen scale up financing activities for small and medium enterprises and the housing sector, which are key to promoting sustainable economic growth in Central and Eastern Europe.

Noreen Doyle, First Vice President of the EBRD, said,The investments will support Raiffeisen Internationals ability to invest in early transition markets and to introduce new products, particularly in SME and retail banking, mortgage lending, and leasing. The EBRDs mission is to help attract such investment andultimately provide the people of the region better access to finance.

Walter Rothensteiner, Chairman of the Board of Management of RZB andChairman of the Supervisory Board of Raiffeisen International, stated,This partnership is a milestone for RZB. So far, we have achieved dynamic growth in Central and Eastern Europe with internally generated funds. With the involvement of IFC and the EBRD, we take an important step in our strategy of opening Raiffeisen International to otherinvestors.

We welcome and appreciate the equity participations of IFC and the EBRD, our long-time partners in earlier projects. Their support is a valuable contribution to further dynamic growth of Raiffeisen International in the region, said Herbert Stepic, Deputy Chairman ofRZBs Board of Management and Chairman of Raiffeisen International''s Board of Management.

Raiffeisen International is the holding company for RZB''s subsidiariesin Central and Eastern Europe and was owned 100 percent by RZB prior tothe capital increase. RZB is the central institution of the AustrianRaiffeisen Banking Group, the country''s most powerful banking group. Aleading corporate and investment bank in Austria, RZB considers Centraland Eastern Europe as its home market. Through Raiffeisen International,it operates a network of 15 subsidiary banks with more than 800 bankingoutlets, as well as two representative offices in 16 markets of theregion.

IFCs strategy in Europes emerging financial markets is threefold. First, IFC supports the development of mortgage and small business finance through banks and leasing companies. Second, IFC works to strengthen local financial institutions, including institutions to beprivatized, to develop banking services, and to increase financing available to local businesses. And finally, in the more developed markets, IFC actively promotes the growth of efficient capital markets. By supporting RZBs network in the region, IFC is making considerablecontributions in all of these areas.

The mission of IFC (www.ifc.org) is to promote sustainable privatesector investment in developing countries, helping to reduce poverty andimprove peoples lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFCs worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.

The EBRD, owned by 60 governments and two intergovernmentalinstitutions, aims to foster the transition from centrally planned tomarket economies in Central and Eastern Europe and the Commonwealth ofIndependent States.

For further information regarding RZB and Raiffeisen International,please contact Michael Palzer (+431-71 707-1504, michael.palzer@rzb.at).

www.rzb.at, www.rzbgroup.com

For further information regarding IFC, please contact Georg Schmidt inWashington

(+1-202) 458 2934, gschmidt@ifc.org).

www.ifc.org

For further information regarding the EBRD, please contact Axel Reisererin London

(+44 20) 7338 7753, reiserea@ebrd.com).

www.ebrd.com

 

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