The EBRD is lending €12mn to Lithuania’s Bankas to support the development and expansion of a bank focused on small and medium-sized enterprises.

Some €7mn is being syndicated to commercial banks (Commerzbank, HSH Nordbank (Copenhagen branch), Bankgesellschaft Berlin, WGZ-Bank Westdeutsche Genossenschafts-Zentralbank, and Caixa Geral de Depitos, France), while the EBRD is keeping €5mn for its own account.

The transaction gives Bankas access to the international commercial syndicated debt market for the first time.

The loan follows an equity investment by the EBRD in Bankas earlier this year, when it acquired a 16.1% stake for €6mn. The EBRD and Bankas have been business partners since 2000, when the bank provided it with a successful SME credit line.

Under the SME credit line, Bankas has made some €11mn in loans to more than 600 SMEs operating in light manufacturing, wholesale and retail trade, production, distribution, services and transport. Bankas is based in the manufacturing and agricultural centre of Iauliai in Northern Lithuania. In recent years, it has expanded its network to 44 branches in 26 locations throughout Lithuania.

The new loan should help Bankas grow significantly by easing its access to medium and long-term funding, says Jean-Marc Peterschmitt, EBRD’s director, bank lending.

Additional funds will allow Bankas to continue financing private business customers and particularly small and medium-sized enterprises at competitive market terms, thus contributing towards further growth of Lithuania’s economy.

“We are happy to continue our strong relationship with the EBRD with this loan,” says Algirdas Butkus, chairman of the board of Bankas. “We are particularly pleased that this transaction is being syndicated as it will help us to get known as a successful local bank on the international syndication market. We will continue our support for SMEs, which is at the heart of the activity of our bank.”