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IFC Leads Basel III Recapitalization to Support FirstRand’s Expansion in Africa


In Johannesburg:
Desmond Dodd
Phone: +2711 731 3053
E-mail: ddodd@ifc.org

In Washington, DC:
Serene Jweied
Phone: (202) 473-8764
E-mail: sjweied@ifc.org

Johannesburg, South Africa, May 5, 2014— IFC, a member of the World Bank Group, today announced an investment of $172.5 million in FirstRand Bank Limited. The transaction represents the first cross-border investment in Basel III Tier 2 instruments in South Africa, and one of the first globally in emerging markets.  The debt will be provided by IFC Capitalization Fund, which is managed by the IFC Asset Management Company.

Andries du Toit, FirstRand group treasurer said, “This significant financing from IFC Capitalization Fund is expected to provide support to our strategy to grow lending to small and medium sized entities (SMEs) in South Africa and the rest of Africa.”


"FirstRand continues to grow and improve access to finance by expanding its lending operations in South Africa and beyond,” said Marcos Brujis, Head of the IFC Capitalization Fund, a $3 billion fund which was made possible by commitments from IFC and Japan Bank for International Cooperation (JBIC).

In South Africa, the investment is expected to increase FirstRand’s funding to SME’s over the 10-year life of the project. The investment will also provide support to FirstRand’s expansion into Sub-Saharan Africa. The South African bank is making a significant strategic and financial commitment to Nigeria, Ghana and Zambia, where it will increase lending to retail clients and SME’s. This is expected to benefit the economies of these countries, create jobs, enhance competition and develop the necessary skills and capacity required to further strengthen the banking sectors in these markets.

About FirstRand Bank Ltd.
FirstRand Bank Limited (the Bank) is a wholly owned subsidiary of FirstRand Limited a South African based diversified financial services group listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange. The Bank comprises three separately branded operating franchises namely First National Bank (FNB), the retail and commercial bank, Rand Merchant Bank (RMB), the corporate and investment bank and WesBank, the instalment finance business.

About IFC Asset Management Company and the IFC Capitalization Fund
IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, invests third-party capital, enabling outside investors to benefit from IFC’s expertise in achieving strong equity returns, as well as positive development impact in the countries in which it invests. It manages $6.3 billion of capital across six investment funds. The IFC Capitalization Fund is a global equity and subordinated debt fund supported by commitments from IFC and JBIC. It aims to strengthen banks considered vital to the financial system of emerging markets.


About JBIC
JBIC is a policy-based financial institution wholly owned by the Japanese government, which has the objective of contributing to the sound development of Japan and the international economy and society, by conducting financial operation in the following four fields: Promoting the overseas development and securement of resources which are important for Japan; Maintaining and improving the international competitiveness of Japanese industries; Promoting the overseas business having the purpose of preserving the global environment, such as preventing global warming; Preventing disruptions to international financial order or taking appropriate measures with respect to damages caused by such disruption. For more information, visit www.jbic.go.jp/en

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.

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