EBRD Financial Institutions Portfolio

1
EBRD Financial Institutions Portfolio
Financial Institutions 6.7 billion as at
December 2007
mn
Sector Distribution Continuing expansion of
segments and products
Commitments outstanding
2
EBRDs Objectives in the Financial Sector

• Promote market-based financial institutions and a
  healthy and efficient financial services industry
• Support private and entrepreneurial initiatives
  of both local and foreign investors and act as a
  catalyst to transition
• Active policy dialogue with operators and
  authorities to strengthen regulatory/legislative
  frameworks and institutions
• Apply best business practices and corporate
  governance in institutions
• Be the leader in institution building

3
Bank Equity

• Since 1992 EBRD has invested in
• 101 banks across 27 countries for
• a total investment of 2.1bn.
• Realised income from EBRDs bank
• equity investments totalled 1.9bn
• so far.
• As of December 2007, the portfolio
• comprised participations in 49 banks
• in 22 countries for a total investment
• of 982.3m.
• The fair market value of this portfolio is
• 3.3bn, of which 2.4bn are unrealised
• gains.

Number of Investments
Note these figures do not include EBRDs
investments in microfinance institutions
4
Bank Equity Returns 1992 2007
Overall money multiple and IRR for all
investments have been 3.22x and 28.79
respectively. The average holding period for
investments has been 5.5 years.
6,542m
Overall MM 3.22x, IRR 28.78
UR 3.66x, 39.60
2,839m
millions
PR 3.45x, 29.76
1,356m
2,016m
FR 2.79x, 26.12
756m
2,348m
393m
867m
5
Bank Equity Performance Over Time

• Number of exits has remained constant over time,
• ranging between 3 and 9 per year. In 2007,
  the EBRD made
• 4 exits from existing investments.
• Money multiple has increased steadily since 2000
  reaching
• an all-time high of 3.38x in 2006, and 3.23 in
  2007
• The average holding period for investments has
  been
• 5.5 years.
• IRRs have also increased over time, peaking in
  2005 at
• 45.3 and remaining above average in 2007 at
  28.79.

Number of Exits
Total Over Period 52
IRR for the Period 28.79
MM for the Period 3.23x
6
Bank Equity overall Performance and Returns 1992
2008 1Q
Overall money multiple and IRR for all
investments have been 3.23x and 28.65
respectively. The average holding period for
investments has been 5.5 years.
6,545m
Overall MM 3.23x, IRR 28.65
UR 3.72x, 39.60
2,842m
millions
PR 3.45x, 29.76
1,356m
2,024m
FR 2.71x, 26.12
764m
2,347m
393m
867m
7
Insurance overall Performance and Returns
1992 2008 1Q
Overall money multiple and IRR for all
investments have been 1.84x and 16 respectively.
Overall MM 1.84x, IRR 16
652.3m
millions
2,016m
519.5m
UR 1.84x, 18
281.7m
38.3m
PR 0.91, -0.36
42.1m
94.6m
FR 1.57x, 14
60.1m
8
Equity Fund Returns 1992 2006
10,000
Fully Realised (FR Including WO)
9,000
Partially Realised (PR)
Unrealised
8,000
7,000
5,188m
6,000
Overall 2.03x, 21.07
USD Millions
5,000
FR 2.27x, 20.37
4,000
1,348m
2,280m
PR 4.42x, 32.81
3,000
UR 1.39x, 15.98
305m
2,000
2,785m
2,009m
1,000
0
Investments at Cost 4,595m
Total Value 9,321m
Excluding secondary sales
9
Investment Criteria

• Selection of partners
• Commitment to
• Corporate governance
• Transparency
• Best practices and change
• Alignment of interest

10
Success Factors

• Institutional environment
• Rule of law
• Regulatory environment
• Supervision
• Alignment of interests of stakeholders
• Shareholders
• Management
• Authorities
• Clients
• People and commitment to high professional
  standards
• Institution capacity building and adapting to
  market dynamics