The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) joined forces in a consortium to invest in the Bank of Palestine (BOP).
According to Industry sources, this strategic Investment is a strategic bid by the two Development Finance Institutions (DFIs) to further boost the capital base of the Bank of Palestine in support of its role in economic recovery and reconstruction efforts in Palestine in addition to intended regional expansion by the bank in the GCC, North Africa, and the Levant.
Industry sources also stressed on that the investment agreements were signed between IFC, EBRD, and BOP where IFC will invest up to 5% stake in the shares of BOP and EBRD invest up to 3.92% through a special issuance of shares.
In addition to growing BOP’s capital, this investment will further boost the partnership between the two entities with the bank and will allow the transfer of knowhow and provision of advisory and technical assistance programs to aid to BOP’s impact-driven projects, in support of the bank’s efforts to expand financial inclusion and thereby promote economic and social development in a fragile market with political and economic challenges.
Bank of Palestine – a publicly listed company on the Palestine Stock Exchange – is the largest financial group in Palestine with a market share of 33% and a footprint that covers the entire geography of the West Bank and Gaza, as well as a representative office in Dubai, UAE with expansion in the MENA region as part of its five-year strategy plan.
Industry sources added that BOP has a deep-rooted commitment to inclusive finance to achieve sustainable social and economic development in Palestine. It plays an important role in the Palestinian economy, by serving over 1 million customers including underserved areas, by putting SMEs at the heart of its strategy, and by promoting green finance. The bank has also been investing significantly in digital innovation, women empowerment, youth, and sustainability.
Francis Malige, EBRD Managing Director for Financial Institutions stated: “We are fully committed to supporting the Palestinian economy and we aim through this investment to support BoP maintaining its role as the leading local institution to be well positioned to capture any future growth from potential reconstruction efforts. Bank of Palestine is not only systemic for the Palestinian banking sector; it is key pillar of the local economy.”
Hashim Shawa, Chairman of the Bank of Palestine Group, stated: “Today heralds an important testament in the mission of Bank of Palestine, two strategic International Development Institutions, of the caliber of IFC and EBRD joined forces to invest in the bank to enable us to be well capitalized to assist in economic recovery in Palestine post the devastating war and economic crisis our country is undergoing. This investment is a testimony of confidence in the Bank’s resilience and management of the crisis caused by the war in Gaza, and it is a message of hope and trust in the bank’s future role in the local economic recovery and planned regional expansion. On behalf of the Bank of Palestine family, I thank and salute the leaderships of IFC and EBRD.”
Industry sources further added that this agreement is after a due diligence process conducted by the DFIs and is in line with the Bank’s Extraordinary General Assembly approval to raise the authorized capital of the bank to USD 300 million. After the special issuance of shares, BOP’s paid-in capital will become USD 253 million in conformity with the bank’s capital adequacy plans for supporting growth and expansion. The bank has received all necessary regulatory approvals for the investment and special issuance.
