European Guarantee Fund: Bankinter and EIF sign agreement to finance SMEs affected by the COVID-19 pandemic in Spain and Portugal
EIF guarantee of up to €350 million to Bankinter to leverage up to €500 million in support to SMEs impacted by the COVID-19 crisis.
The agreement is backed by the Pan-European Guarantee Fund (EGF), part of the €540 billion EU rescue package approved in the wake of the COVID-19 pandemic.
The European Investment Fund (EIF), part of the European Investment Bank Group, and Bankinter signed an agreement aimed at supporting Spanish and Portuguese small and medium-sized companies (SMEs) impacted by the economic crisis caused by COVID-19. The EIF will provide a €350 million uncapped guarantee to the Spanish bank aimed at leveraging up to €500 million into the economy. The agreement is backed by the European Guarantee Fund (EGF), part of the €540 billion EU rescue package approved by the European Council to respond to the economic impact produced by the pandemic.
Thanks to the EIF’s backing under the EGF, Bankinter will provide new debt financing on favourable terms to eligible companies in Spain and Portugal to mitigate the economic impacts of the COVID-19 crisis. The agreement aims to support their growth and development strategies in the medium to long term, and the EIF will bear up to 70% of the risk of the new loans granted by Bankinter to eligible SMEs.
“We are delighted to build on the long-standing relationship with Bankinter to help Spanish and Portuguese SMEs overcome the financial constraints posed by the pandemic. At the EIF, we strive to boost the growth of micro, small and medium-sized businesses, notably by helping them to access finance, and the European Guarantee Fund is proving to be the right tool to achieve this goal,” said Alain Godard, EIF Chief Executive.
Ricardo Mourinho Félix, EIB Vice-President, added: “SMEs represent a substantial part of the economic and employment landscape in Spain and Portugal. Supporting their economic recovery in the aftermath of the COVID-19 pandemic is key. For this reason, in 2020, 50% of the EIB Group’s total activity in Spain and 72% in Portugal was dedicated to meet the liquidity and investment needs of small and medium-sized companies. This EIF guarantee of up to €350 million backed by the Pan-European Guarantee Fund (EGF) is a great example of our support in the wake of the COVID-19 pandemic.”
Fernando Moreno, Managing Director—Corporate Banking Area at Bankinter pointed out that "thanks to this agreement, Spanish corporate customers of Bankinter will benefit from greater financial support. The bank closed the first quarter of 2021 with a corporate loan book of more than €28 billion, which means that Bankinter has increased its financial support to companies by 8%. Our goal is to further boost financing to accelerate the recovery of the productive sector."
Background information:
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research, and development, entrepreneurship, growth, and employment.
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Spain, Portugal and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF enables the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.
About Bankinter
Bankinter is the fifth-largest bank in the Spanish financial system and the leader in terms of profitability and asset quality. It has more than €100 billion in total assets, a loan book of €64.6 billion and controlled resources of €106 billion. With a presence in Spain, Portugal, Ireland and Luxembourg, Bankinter bases its strategy on various complementary business lines, one of the main ones being corporate business, with special focus on medium-sized and large enterprises. Its corporate loan book totalled €28 billion at the end of March 2021, 8% more than on the same date in 2020.