New Support for Bank BGZ BNP Paribas from EIB

As a combination of the European Investment Fund (EIF) and the European Investment Bank (EIB), the European Investment Bank Group (EIB Group) has now confirmed their support for Bank BGZ BNP Paribas. In the agreement, the Group will help with a securitisation transaction with the aim of creating new funding capacity for mid-caps and SMEs in Poland. As a member of the wider BNP Paribas Group, the bank is currently the sixth-largest in Poland.

Based on a number of consumer loans, the EIB, according to the agreement, will buy a ‘mezzanine tranche’ of various asset-backed securities with a total value of €80 million. With the purchase of these mezzanine notes, this should provide BGZ with capital relief and allow them to expand capital for all mid-caps and SMEs in the country.

As the main pillar of the Investment Plan for Europe (by the European Commission and EIB), the whole transaction and plan has been guaranteed according to the European Fund for Strategic Investments (EFSI). Also known as the ‘Juncker Plan’, this was first introduced as a means of boosting competitiveness within the economy in Europe. With this step, it means the EIB has taken a larger risk to ensure more finance for Bank BGZ BNP Paribas and this is great news for mid-caps and SMEs.

Vazil Hudak, Vice-President at the EIB, has said “We are delighted to announce the milestone operation with Bank BGZ BNP Paribas today, as thanks to this innovative securitisation transaction, we will significantly enhance support for Polish small businesses. This new lending to SMEs and Mid-Caps will support employment and economic growth in Poland, which is the main goal of the Investment Plan for Europe. Over the last months, the Bank has developed innovative ways of financing in Poland, particularly under EFSI.  This year, including this operation, the EIB has signed circa EUR 700m of EFSI projects supporting SMEs and Mid-Caps in Poland, mobilising investments from SMEs and Mid-Caps in excess of EUR 2bn.”

ALM Treasury Head at the Bank BGZ BNP Paribas, Jaroslaw Rot, said “This transaction fits into the long-lasting tradition of our Bank's BGZ BNP Paribas cooperation with the European Investment Bank, which contributes to the development of business in the competitive economic environment.”