MIGA guarantee for EUR 100 mn will help Raiffeisen Bank support the Ukrainian business, including customers lending
The Multilateral Investment Guarantee Agency (MIGA, which is a member of the World Bank Group) issued a guarantee of EUR 100 million to Raiffeisen Bank International AG to cover equity investments in its subsidiary, Raiffeisen Bank Ukraine, against the risk of expropriation of funds with respect to the mandatory reserves for the period of 1 year.
Local banking regulations obliges Raiffeisen Bank (like other Ukrainian banks) maintain mandatory reserves with the National Bank of Ukraine.
MIGA’s capital optimization guarantee will reduce the risk weight applicable to those reserves on the level of RBI Group according to European banking regulations to zero. This will help Raiffeisen Bank Ukraine in freeing up funds for more lending to the critical sector of Ukraine’s economy during the war and increase the volume of essential non-credit banking operations (e.g. payments, merchant acquiring, cash and FX transactions, etc.)
“MIGA’s guarantee will increase the World Bank Group’s humanitarian and economic support for Ukraine at a time when the ongoing war presents a major threat to the health and welfare of the Ukrainian people,” said Hiroshi Matano, Executive Vice President of MIGA. “At this time of conflict compounded by economic stress and the lingering impact of COVID-19, it is critical to enhance access to credit for the people of Ukraine.”
Raiffeisen Bank Ukraine is the largest private bank in Ukraine and the largest bank with foreign capital in terms of total assets and volume of loans.
“MIGA’s guarantee is a valuable component in our measures to optimize our portfolio structure,” said Thomas Matejka, Chief Financial Officer at Raiffeisen Bank Ukraine. “It enables us to balance risk considerations with continued credit assistance for our customers, in times where the Ukrainian economy needs all available support.”
We would like to remind that according to the preliminary results Raiffeisen Bank’s loan portfolio in 2022 grew by 1% up to UAH 71.39 bn. The Bank, in particular, granted the new loans in the amount of UAH 10 bn to critical economy sectors, such as agricultural sector, logistics and retail, pharmaceuticals and fuel supply.
The Bank is sufficiently capitalized and fulfils all ratios set by the National Bank of Ukraine. Thus, in particular, capital adequacy ratio is 18.6% with the regulatory minimum value of 10%. The net stable funding ratio was 171.8% while the prudential ratio is 90%.