Mortgage Credit Line Extended to Raiffeisenbank Ukraine

KIEV, Ukraine -- The EBRD is extending a $10 million mortgage credit line to Raiffeisenbank Ukraine to support the fast-growing Ukrainian mortgage market. Half of the loan is expected to be syndicated internationally. It is the second transaction under a $30 million framework set up by the EBRD last year.

With domestic mortgage market growth topping 84 per cent in 2004, the sector has become increasingly attractive for local commercial banks. However, the absence of long-term funding and the low capitalisation of the Ukrainian banking sector increase the risks for sustainable growth of mortgage financing. The mortgage credit line to Raiffeisenbank Ukraine will help channel long-term financing to individual borrowers for buying, building or renovating their homes.

EBRD financing will support Raiffeisenbank Ukraine strategy to turn into a bank serving all segments of the market and, in particular, to become one of the leaders in retail banking.

The EBRD’s assistance for development of mortgage finance should have a significant economic and social impact through support for wider home ownership and improvement of housing conditions for the population, in line with the Bank’s new strategy for Ukraine. It should also help increase competition among local banks in this market, as well as develop specialised financial products

The Bank’s cumulative investments in Ukraine stand at €1.7 billion through 67 projects.

Source: Harold Doan Associates