The European Bank for Reconstruction and Development (EBRD) has invested €36 million in zloty-denominated subordinated bonds issued by Polish lender Bank Zachodni WBK S.A. (BZ WBK) as part of its €240 million issue of subordinated bonds.
The Tier II capital eligible bonds have a 10-year maturity, are callable after five years and will be listed on the Warsaw Stock Exchange. The bonds are compliant with the European Union’s Capital Requirements Regulation and Capital Requirements Directive IV (commonly referred to as CRR/CRD IV or Basel III).
BZ WBK has committed to allocate the equivalent of 140 per cent of the proceeds from EBRD investments in the subordinated bonds to finance the construction of certified commercial and residential greenfield projects, in line with the EBRD’s Green Economy Transition approach.
The EBRD’s Green Economy Transition approach is a flagship initiative which promotes sustainable energy and resource use. The Bank is a leader in working with private sector financial institutions across its regions of operations, providing regional banks with finance for sustainability projects. Bank Zachodni WBK is one of the largest financial institutions in Poland. BZ WBK is listed on the Warsaw Stock Exchange, with a market capitalization of €8.4 billion at the end of March 2018. BZ WBK had a 10.1 per cent market share by loan portfolio and 10 per cent by deposits as of the end of September 2017. Banco Santander is BZ WBK’s single largest shareholder, with 68.13 per cent of total capital.
Since the beginning of its operations in Poland in 1991, the EBRD has invested €8.8 billion in more than 390 projects in the country. In addition to its wide range of products for banks and companies, in recent years the EBRD has built a growing portfolio of investments (both equity and debt) in the Polish financial sector, for which demand remains high.