Raiffeisen Bank Aval in line for USD 105 mln loan from IFC

The International Finance Corporation is planning to provide a USD 105 mln subordinated loan to Raiffeisen Bank Aval (BAVL), Interfax reported yesterday. The loan is part of a joint initiative by the World Bank, European Bank for Reconstruction and Development and European Investment Bank to support banks in Eastern Europe. The subordinated debt is to enter the bank’s Tier 2 regulatory capital. Mykyta Mykhaylychenko:  This new loan would improve the bank’s capital adequacy ratio by ~1.3 pp (to an estimated 13.8%, accounting for the recently approved and ongoing charter fund increase by ~USD 113 mln  and the subordinated loan from the EBRD for USD 75 mln).  However, this news was expected as international organizations (such as the IFC and EBRD) announced a few months ago and have already started supporting Ukrainian banks through subordinated debts.  Hence, the decision should not have a significant effect on BAVL stock