The World Bank’s IFC is partnering with the Association of Regional Banks of Russia to promote regional banking, including the provision of trade finance.
The partnership also aims to improve risk management and loan resolution practices, facilitate the transfer of distressed assets, and assist Russian regional banks with refinancing options to promote regional banking sustainability.
IFC will work with selected member banks to assess their risk management and loan resolution practices, provide targeted advisory services to strengthen risk and loan portfolio management practices, and restructure and transfer distressed assets.
IFC also will promote financial instruments for recapitalising banks and handling distressed assets and will provide ongoing support of trade finance and energy efficiency investments.
“Most Russian regional banks cannot rely on state financial aid,” says Anatoly Aksakov, president of the Association of Regional Banks of Russia. “However, these banks play significant roles in their respective markets, especially in remote regions. We believe that this agreement will raise our cooperation with IFC to a new, higher level and make our joint efforts to support regional banking systems more systemic and strategic.”
Jyrki Koskelo, IFC vice-president of Europe, Central Asia, Latin America and the Caribbean, and global financial markets, comments: “IFC’s strategy in Russia and the wider region is to support banks in expanding access to finance for local small and medium businesses, thus contributing to the diversification of regional economies and increased employment. We are very pleased to partner with the association, and look forward to continued successful cooperation.”
This agreement is part of the IFC’s crisis management advisory programme in Europe and Central Asia aimed at strengthening financial markets in countries most affected by the economic crisis, so that financial institutions will emerge from the downturn and resume lending to the real sector in a more sustainable fashion.
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