Raiffeisen Bank S.A.

MIGA has issued a $25.7 million guarantee to Raiffeisen Zentralbank Österreich AG of Austria to cover its shareholder subordinated loan to its subsidiary, Raiffeisen Bank S.A. Romania. The coverage is for seven years, and protects against the risks of transfer restriction and expropriation. The loan will help the subsidiary to further increase its market share and offer top-quality banking services.

As a subsidiary of one of Austria’s leading banks, Raiffeisen Bank S.A. is able to provide quick, efficient, and professional services to its clients at competitive prices. Besides retail banking and credit facilities, Raiffeisen Bank S.A. offers corporate business and trade finance services, loans, treasury, and capital market services. The bank also has in place a credit line for lending to local small and medium-size enterprises supported by the European Bank for Reconstruction and Development—which is crucial for fostering entrepreneurship, innovation, exports, and employment, as well as for promoting economic development throughout the country.

Raiffeisen Bank S.A. is planning to strengthen its training program, available to all employees. For 2004, the bank budgeted about $3.2 million for training, or approximately six training days per employee. Raiffeisen Bank S.A. also possesses advanced information technology and proprietary software systems, automated processing, and up-to-date banking technology—critical for the local transfer of knowledge.

As the volume of the bank’s business increases, so will the number of people employed by the bank. That number was estimated to have reached almost 4,700 by the end of 2004. The bank is also planning to improve further its technological infrastructure by updating key information technology capabilities and by establishing a new operations center. As the bank expands, spillover effects on the local economy are expected to grow.

This project is consistent with the key objectives of the World Bank’s country assistance strategy for Romania, which seeks to achieve economic growth by improving the role of the private sector in the economy and reforming the financial sector, which are essential for long-term sustainable development.