EDB Became Shareholder of Khanty-Mansiysky Bank

The Eurasian Development Bank acquired five percent of ordinary registered uncertified shares of Khanty-Mansiysky Bank (KMB) which had been issued additionally for public offering. In monetary terms, the EDB’s interest in KMB totals RR1.05 billion. The remaining shares of this additional issuance were subscribed by Ferrosplav Invest (6.5%) and IST Capital (16.5%), who will entrust the EDB with managing their KMB holdings. The EDB selects its partners and builds relationships with them with due regard for the international experience and practices of other development institutions, and employs the mechanism of partnership between the state and private sectors.

The decision to acquire an interest in KMB equity capital was adopted in pursuance of the programme documents relating to the EDB’s participation in the financial sector development in its member states, and in view of the fact that this project complies with the EDB mission and strategy. KMB is a large universal regional bank. Its strategy is aimed at becoming the leading regional bank in West Siberia, the Urals and other Russian oblasts bordering Kazakhstan. An increase in KMB’s capitalisation following the entry of new shareholders will enable the bank to increase lending to businesses from the Urals and Siberia who trade intensively with their Kazakh partners. Thus, by contributing to the development of the region’s major lending institution jointly with the Government of the Khanty-Mansi Autonomous Area and other stakeholders, the EDB will support the economic development of the area, including lending to small and medium-size businesses, financing infrastructure projects in regions where KMB operates, and expanding cross-border trade and investments by the Russian Federation and the Republic of Kazakhstan.

The EDB’s task to increase mutual trade turnover and investments in EurAsEC member states was reiterated at the last week’s Bishkek meeting of the EurAsEC Inter-state Council, at which the heads of the six member states approved granting the EDB the observer status. The EDB’s shareholding in KMB will allow mutual trade and investments to be nearly tripled (from 16.38 to 54.57 billion roubles and from 7.9 to 26.6 billion roubles, respectively) by 2013. Notably, this increase in mutual trade will be attributable mainly to the border regions of Russia and Kazakhstan.

Igor Finogenov, Chairman of the EDB Executive Board, said that ”the project is significant and promising. Even the extremely unfavourable situation on global financial markets could not affect us. Our partnership with the Area rests upon the understanding of our common goals. To the EDB, this means the ability to participate in the project though a relatively small shareholding with a profound integration and development effect; and to the Khanty-Mansi Autonomous Area, or Yugra, KMB’s principal shareholder, this indicates the wish to obtain a strategic partner whose main task is to expand and diversify the economy of the Area and neighbouring regions “.