The transaction, which is subject to regulatory approval, will be the largest EBRD investment to date in the capital of a Russian bank. The investment will entitle the EBRD to nominate a director to the Board of Directors of Promsvyazbank.

When completed, the deal would give the EBRD and Promsvyazbank’s other minority shareholder, Commerzbank, sufficient shares jointly to create a blocking minority stake of over 27 percent.

This investment in Promsvyazbank is aimed at strengthening the capital base of a long-standing partner of the EBRD in order to support its business in the current difficult environment, said Nick Tesseyman, the EBRD’s Business Group Director for Financial Institutions.

Providing equity for a systemic bank should send an important message helping to boost confidence in good Russian names at a time when many financial markets are virtually closed and most investors still display extreme risk-aversion, Mr. Tesseyman added.

“Having EBRD as a new shareholder is a positive development for our Bank, which reaffirms our strong market position,” says Alexander Levkovskiy, PSB’s President. “We are very pleased that our longstanding and fruitful cooperation has laid the basis for an equity participation by the EBRD in PSB. This will take our partnership to a new level, and allow us to explore new opportunities,” Mr. Levkovskiy said.

Established in 1995, Promsvyvazbank employs around 10,000 staff. It serves some 80,000 corporate customers and nearly a million retail ones. It has an important regional presence and is highly active in trade finance, factoring as well as lending to small businesses, all sectors which are key EBRD priorities.

The EBRD is an equity investor in 11 Russian banks and once this deal is completed, Promsvyazbank will become the 12th.