EBRD takes equity stake in Union Bank

TIRANA, April 18 – The EBRD has acquired a 12.5 percent equity stake in Albania’s Union Bank (UB) to support the further development of the bank’s lending activities and its strategy for rapid growth not only in Albania, but also in neighboring countries, according to a statement.
The equity financing comes under the EBRD-Italy Western Balkans Local Enterprise Facility, which provides individual investments of up to eight million Euros. In addition to the EBRD finance, it is envisaged that UB will also benefit from 650,000 Euros of consultancy assistance for institutional building financed by technical cooperation funds.
Since its establishment in 2006, UB has been growing steadily and today has a network of 25 branches across the country. This makes UB one of the largest bank networks in Albania, with a significant presence in the local market and a wide product offering.
Following the transaction, the EBRD will be represented with a director on the bank’s board. The involvement of the EBRD is expected to help further strengthen UB’s governance standards, organizational structure, policies and procedures.
Signing the agreement, EBRD’s Varel Freeman said the investment would strengthen a promising bank in Albania and have a positive impact on the country’s financial sector by increasing competition and setting higher standards of corporate governance and business conduct. “The EBRD will not only bring capital but also its experience, expertise and know-how to this new partnership”, he added.
In his speech, Union Bank Chairman, Edmond Leka, welcomed EBRD’s investment in UB as a very positive contribution to the strengthening of the bank’s capital and business. “We are confident that Union Bank’s strong Albanian roots and local knowledge will be complemented by EBRD’s European background and expertise in transition countries”. The EBRD-Italy Western Balkans Local Enterprise Facility is an investment facility established by the EBRD with financial contributions and support from the Italian government. WB LEF is contributing to the economic recovery in the Western Balkans through the provision of mainly equity and quasi equity financing to small and medium local enterprises. (Tirana Times Staff)