November 7, 2019 / 3:46 PM / 6 days ago

EBRD, Albania's Union Bank in 30 mln euro risk-sharing deal

TIRANA, Nov 7 (Reuters) - The European Bank for Reconstruction and Development (EBRD) has agreed a 30 million euro ($33 million) unfunded risk-sharing deal with Albania’s Union Bank to help it fund corporations and small and medium-sized enterprises, the EBRD said on Thursday.

With the EBRD on board, the banks can handle constraints imposed by central banks on single-borrower exposure limits as well as their own internal rules aiming to manage loan portfolio concentration, the EBRD said in a statement.

Under its Risk Sharing Framework, the EBRD takes part of the risk of its partner banks’ loans in funded or unfunded schemes in U.S. dollars, euros or the local currency, it added.

Union Bank, the third bank in Albania to join the EBRD’s risk-sharing scheme, bought the smaller Malaysian-owned International Commercial Bank (ICBank) a year ago.

Lending to the private sector grew by 7.5% in the third quarter of 2019 over the same period last year, Central Bank governor Gent Sejko said on Wednesday, adding it showed the lending scene had improved and competition had grown.

Following a period of consolidation last year, there are now 12 banks, mostly foreign-owned, in Albania from 16 for over a decade. Bad loans amount now to 10.6% of overall lending, down from more than 23% a few years ago. ($1 = 0.9049 euros) (Reporting by Benet Koleka; editing by David Evans)

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