The European Bank for Reconstruction and Development (EBRD), in collaboration with Privredna banka Zagreb d.d. (PBZ) – a key player within the Intesa Sanpaolo Group, has initiated a pioneering €75 million risk-sharing agreement. This strategic partnership marks the commencement of an innovative risk-sharing scheme aimed at bolstering the Croatian banking sector, with PBZ at the forefront of this initiative.
Designed to foster economic growth and development, this novel framework enables the EBRD to participate in the risk associated with loans extended to local businesses, ranging from large corporations to small and medium-sized enterprises (SMEs), via an unfunded risk participation model. Under this scheme, the EBRD commits to guaranteeing up to 65% of each sub-loan dispensed by PBZ to qualified businesses, potentially elevating the bank's commitment to as much as €75 million.
This risk-sharing model is a cornerstone of the EBRD's Small Business Initiative, a comprehensive program dedicated to the nurturing and advancement of local private enterprises. Through this initiative, the EBRD collaborates with partner banks to provide both funded and unfunded risk participation solutions, thus co-financing and securing loans to eligible firms.
Mark Davis, the EBRD's Regional Director for Central Europe, expressed enthusiasm about the collaboration with PBZ, highlighting the opportunity to enhance financing avenues for expanding businesses. He emphasized that the EBRD's risk participation framework would empower PBZ to better manage capital and risk diversification, subsequently promoting credit expansion for the broader economy's advantage.
Dinko Lucić, President of the Management Board at PBZ, reflected on the bank's robust, enduring relationship with the EBRD, emphasizing the significance of this new risk-sharing model in offering a more adaptable, tailored approach to banking. Lucić noted that this program is poised to augment PBZ's risk-bearing capabilities and achieve capital relief, thereby addressing the financial challenges faced by private companies, including both large enterprises and SMEs, in securing advantageous financing options.
PBZ stands out as a leading banking institution in Croatia, holding a significant market presence across various sectors. As part of the Intesa Sanpaolo Group, one of Europe's premier banking conglomerates, PBZ has established itself as a regional banking nexus, particularly following its acquisition of major stakes in Intesa Sanpaolo's subsidiaries in Bosnia and Herzegovina and Slovenia. The bank is lauded for its innovation, especially in areas like card services and technological advancements, offering a broad spectrum of cutting-edge products and services to its retail, corporate, and SME clientele.
The EBRD's commitment to enhancing private-sector competitiveness and bolstering local SMEs through indirect financing avenues, including risk-sharing facilities, remains a pivotal aspect of its strategy in Croatia. As one of the country's largest institutional investors, the EBRD has funneled over €4.7 billion into 248 Croatian projects, with a significant focus on the private sector, evidencing its dedication to the nation's economic advancement.
