EIB to provide direct loans at favourable conditions to small and medium-sized enterprises together with Bank Austria in the future
- European Investment Bank to share default risk with borrower's bank
- Bank Austria selected as first partner for pilot project in Austria after careful assessment
Bank Austria and the European Investment Bank (EIB) signed a so-called risk sharing agreement in Vienna on Friday. As a result, the EIB will no longer merely provide pure refinancing for Bank Austria in the SME segment, but will also issue direct, low-interest corporate loans together with Bank Austria as part of a pilot project. Bank Austria was selected as the EIB's first partner in Austria following a comprehensive assessment of its lending process. The total volume of the EIB's co-financing measures will initially be limited to EUR 75 million. Bank Austria will provide the same amount of funds. According to the agreement, the two partners will share the credit risk for these loans, with each institution assuming half of the risk.
According to Matthias Kollatz-Ahnen, the EIB's vice president responsible for loans in Austria: "With this new type of loan, the EIB will assume a portion of the risk in order to provide greater stimulus to the market segments in which commercial banks want or need additional risk partners. This is intended to help mitigate the effects of the current economic crisis by giving companies better access to medium- and long-term financing at favourable conditions."
According to Helmut Bernkopf, the member of Bank Austria's Management Board responsible for Corporate & Investment Banking: "We have been successfully collaborating with the European Investment Bank for years. Particularly in difficult economic times, the refinancing provided by the EIB is valuable because it allows commercial banks to issue favourable corporate loans independent of the capital markets. I'm pleased that we were chosen as the exclusive partner for this pilot project. It is a very impressive endorsement of our high quality standards in lending."
The new, low-interest loans from Bank Austria and the EIB are primarily targeted at SMEs, but are also available to medium-sized companies with up to 3,000 employees. Particular emphasis will be placed on financing technology and environmental projects with a total value of up to EUR 25 million. The loan terms will be between three and twelve years. If the pilot project is successful, other tranches will follow.
Enquiries: Bank Austria Press Office Austria
Tiemon Kiesenhofer, tel. +43 (0) 50505 ext. 52819;
A reproducible photo of the contract signing ceremony is available here for download. Reproduction free of charge.