Raiffeisen Bank partners with EIB Group to secure new financing for SMEs in Romania

Raiffeisen Bank is the first bank in Romania to enhance business financing through a synthetic securitisation. The new cooperation with the European Investment Bank (EIB) and European Investment Fund (EIF) will increase access to finance and strengthen the resilience of SMEs and MidCaps companies from Romania.

The transaction enables Raiffeisen Bank S.A. to provide new financing to eligible SMEs and MidCaps totalling 523 million RON (106 million Euro) over the next two years, whereby the new business financing will also benefit from the special support of the EIB, through a reduced interest rate.

The transaction covers a portfolio of non-retail loans worth 1.5 billion RON (308 million RON). The securitised loan portfolio will remain on Raiffeisen Bank’s balance-sheet and is split into a senior, mezzanine and junior risk position. Under the transaction, the credit risk of the mezzanine tranche is assumed by the European Investment Fund, while the credit risk of the senior and junior tranches is retained by Raiffeisen Bank. The transaction features a 3 year replenishment period, in which amortised loans can be replaced with new eligible exposures.

“The EIB Group is committed to enhancing business investment across Romania. This securitisation transaction with Raiffeisen Bank demonstrates how the combined engagement of the EIB and EIF is supporting economic activity and job creation in Romania.” said Christian Kettel Thomsen, Vice President of the European Investment Bank.

EIF Chief Executive Alain Godard said: “Raiffeisen Bank has been a long-standing partner for EIF across many reference transactions. The EIF is pleased to be able to support Raiffeisen Bank with their inaugural synthetic securitisation. This transaction is not only expected to make a significant positive contribution to job creation and economic growth of the country, but also promotes the objectives of the Capital Markets Union in Romania, as the country has only seen one other synthetic securitisation so far.

„We are pleased to announce this innovative transaction with our long standing partner, the EIB Group. This partnership enables us to increase access to finance for Romanian SMEs and MidCaps. We will support their growth and development in a difficult economic environment, marked by the negative effects of the COVID pandemics, the military conflict in Ukraine and the energy crisis. At Raiffeisen Bank, we are committed to driving economic growth and to supporting the success of our clients.We believe this partnership will be a key step in achieving those goals,” said Alina Rus, CFO Raiffeisen Bank.

„Synthetic securitisations are an important instrument to manage capital in an efficient way and to support loan growth through transfer of risk, especially in the current market environment, characterised by increased uncertainty and high risk premiums. The securitisation structure allows the bank to release the majority of the capital and MREL allocated to the securitised portfolio and increases the bank’s capacity to finance the Romanian economy. The transaction is estimated to have an initial positive impact of approximately 40 bps on CET1 ratio and respectively 80 bps on MREL ratio at the consolidated level of Raiffeisen Bank S.A.,” said Romulus Mircea, Executive Director Assets and Liabilities Management.