EBRD could share up to 50% of Ukrainian PrivatBank credit risk

MOSCOW. May 4 (Interfax) - The European Bank for Reconstruction and Development may take on up to 50% of the credit risk on PrivatBank's newly issued micro, small and medium enterprise or MSME loans totaling up to 120 million euros.

Ukrainian media quoted information from the EBRD as saying on Wednesday that the EBRD board of directors planned to consider what would be a first cooperation project with the nationalized PrivatBank on June 30.

The EBRD guarantee will be 30 million euros, but a further sublimit of 24 million euros could be included under the SME Competitiveness Program in the European Union's Eastern Partnership.

The EBRD in 2022 took on 50% of credit risks associated with food security and other critical needs under loans to be offered by ProCredit Bank and OTP Bank, both based in Kiev, equivalent to 25 million euros and 8.75 million euros respectively; and 50% of risks associated with leasing contracts by OTP Leasing equivalent to 19.5 million euros.

As then, the project was approved on the basis of minimum 50% of donor funding coverage by the EBRD Crisis Response Fund under a specific window for the EBRD's special package in response to the crisis in Ukraine.

The EBRD said PrivatBank was fully owned by the state and was the largest systemically important bank in Ukraine with a 23% market share by assets or $15 billion at end-2022. It specializes in servicing retail and MSME clients through a country-wide network of 1,200 branches and 7,300 ATMs.