Bank of Palestine Financial Group and Proparco, the investment arm of the French Development Agency AFD, announced the signing of an agreement to enter Proparco as a strategic partner in Bank of Palestine through a private subscription of about 7 million shares through the Palestine Exchange, with the approval of the Palestinian Monetary Authority and the Capital Market Authority.
The partnership entry agreement stipulates that the Investment and Support Fund for Businesses in Africa (FISEA), through its investment arm, Proparco, will invest $12 million in Bank of Palestine through a special issuance of BoP shares, taking into consideration that BoP is a leading banking group in Palestine that adheres to the standards of financial inclusion. The agreement also represents a strategic partnership to enhance financing for SMEs, entrepreneurship and women's empowerment. The agreement also includes a technical assistance program by the French Agency to support Bank of Palestine projects that have a social impact, which will support Bank of Palestine’s efforts to expand financial inclusion and assist in economic and social development in the Palestinian market, in light of the exacerbation of economic problems due to the COVID-19 pandemic and the need to improve economic growth.
This agreement comes after deep and extensive studies conducted by Proparco, consistent with the approval of Bank of Palestine’s Extraordinary General Assembly on the Board of Directors' recommendation to increase the bank's capital to $250 million. Whereas, after the special issuance of Proparco shares, the paid-up capital of Bank of Palestine will become $217,433,527 according to the bank's capital adequacy growth ratio.
Bank of Palestine is a public joint stock company listed on the Palestine Stock Exchange, and it is the largest financial institution in Palestine with a market share of 30% and a network covering the entire geography of the West Bank and Gaza Strip, in addition to representative offices in Chile and the United Arab Emirates. Bank of Palestine is committed to achieving sustainable social and economic development in Palestine. It plays an important role in the Palestinian economy, by providing banking services to more than one million customers, and to people living in marginalized areas. The Bank accorded great importance to small and medium-sized enterprise within its strategy to promote green project financing. It also invests heavily in entrepreneurship, digital innovation, women empowerment, and banking and social sustainability.
During the signing ceremony, Mr. Gregory Clement, the CEO of Proparco, expressed his confidence in the partnership with Bank of Palestine, noting that the bank is a strategic partner of the French Agency for Development AFD, and the Bank has demonstrated many times its deep role in economic and social development in Palestine. He pointed out that this investment indicates Proparco’s continued confidence in Bank of Palestine and the strong economic potential of Palestine despite the challenges confronted.
Clement said that the bank's capital increase will allow the promotion of high-impact lending activities to serve Palestinian SMEs, while the technical assistance program will contribute to strengthening its commitments to financial inclusion, financing for green projects, achieving gender equality and digital leadership, which is part of the mission of the French Agency.
Mr. Hashim Al Shawa, the Chairman of Bank of Palestine Group, welcomed the entry of Proparco through FISEA into a strategic partnership with Bank of Palestine, stating that it would enhance the confidence of international investors in Bank of Palestine Group and the success of its business under the most difficult circumstances. Al Shawa expressed his pride in the partnership with the prestigious French Development Agency, which plays a major role in the field of economic development in Palestine and the world. He pointed out that the Bank will continue to work on maximizing the value of shareholders' investments in the Bank, in addition to strengthening its sustainability strategy in line with sustainable development goals and principles of good governance, protecting the environment and social development. According to Al Shawa, “the partnership with Proparco and the experience AFD has to offer, will play a major role in BoP’s growth and development strategy, particularly in the fields of digital transformation, the inclusion of women and children, and innovation, thus, achieving sustainable financing.”