Postbank has started offering repo transactions. The product was included in the bank’s portfolio on 23 April 2007, the financial instution announced. Repo transactions are means of short-term financing allowing you to sell to the bank securities, traded on BSE, on the contract conclusion date and repurchase them at the agreed price on the date agreed.
These transactions are for all enterprising people, who own shares, but have limited cash. Postbank accepts the stock as a financial guarantee and the client receives the money against a certain interest. Repos are suitable both for individual and corporate clients.
“This type of transactions has great potential and enjoys serious demand with a view of the rapid development of local capital markets and the forthcoming initial and secondary public offerings. Their main advantage is that they offer clients an opportunity to receive financing without selling their stock in short terms – a 40,000 euro financing is granted within 3 days, if shares meet all quality requirements”, Preslav Kitipov, head of Exchange Operations with the Capital Markets department, explained.
The maturity of Postbank’s repo transactions is up to 3 months. After the maturity date expires the bank offers an opportunity to renegotiate the term. The financial institution offers financing of up to 50% of the stock’s market value, thus ensuring better security of the granted amount. The bank also allows additional pay-ins in case the price of the shares drops.