BR LOOKS TO AZERI AND ARMENIAN MARKETS
The FINANCIAL
April 7 2008
Georgia
The FINANCIAL — Bank Republic (BR), the Georgian bank belonging
to Societe Generale Group, is looking at expansion opportunities in
neighbouring Azerbaijan and Armenia.
"We have a worldwide strategy for development abroad and we are aiming
to seek control of banks in both Azerbaijan and Armenia as soon as
possible," Gilbert Hie, BR CEO, told The FINANCIAL.
As Hie stated, though the Armenian market is limited, BR is already
having talks with the neighbour. As for Azerbaijan, the bank’s target
is to take control of already-opened banks there.
"The Azeri market is much more attractive, because it is bigger,
and the annual growth of the country is 30-35%," declared Hie.
Last year TBC Bank announced its intention to enter three post Soviet
countries in the next year and a half. As Mamuka Khazaradze, TBC Bank
Founder and Supervisory Board Chairman, stated, the bank will invest
USD 30-40 million initial financing in each of the new markets.
TBC Bank’s regional expansion took start with the acquisition of
Azeri micro-financing institution Soa Credit in 2007.
Ukraine is also a target market for Georgian banks and vice versa. In
October 2007, Bank of Georgia announced that it had successfully
completed the acquisition of a 98.77% equity interest in Universal Bank
of Development & Partnership ("UBDP"), a mid-sized bank in Ukraine .
In May 2007 Ukraine ‘s PrivatBank entered the Georgian market after
buying into 75% of shares of the small Georgian Tao Bank for USD
25 million.
As for the local market, BR is continuing regional expansion in 2008
by opening a Rustavi branch. As soon as there’s market demand the bank
intends to launch a second one in the city. BR’s plans for the near
future envision opening new branches in: Signagi, Telavi and Kvareli.
"The new Rustavi branch will be very important. The 20 people employed
there will include both local staff and human resources from Tbilisi as
the latter is so close to Rustavi. In total Bank Republic is planning
to recruit 300 persons, which is an increased number compared to 2007,"
BR CEO, told The FINANCIAL.
On April 4, 2008 Bank Republic officially opened the Rustavi Branch at
the address: #20 Megobroba Avenue, Rustavi, Georgia. The ceremony was
attended by Bank Republic Management, clients of the Rustavi Branch
and invited guests.
According to Hie, the BR aim is to be among the top leaders of the
Georgian Banking industry in the years to come. It has a long term
strategy to develop an extensive network of 80 branches throughout the
country, to be closer to its customers and provide the best products
with the highest quality of service.
"One of the strategic priorities of Bank Republic is the aggressive
expansion of its branch network in the whole of Georgia, hence the
opening of at least one branch per month," claimed BR CEO.
Rustavi Branch is the twelfth outlet opened in Georgia by Bank Republic
since last year, after its integration with Societe Generale Group. The
bank plans to open eleven more branches and service centres by the
end of 2008.
"We chose Rustavi because it is a very promising city which the top of
central administrations of the government are moving to. For us it’s
necessary to be in Rustavi as according to the policy development
of the government the city is to become even more attractive in the
future," said Hie.
In his words, the second reason could be the growing number of BR
clients from Rustavi. It’s always better to be closer to the customer.
"I believe we will make the local population happy with high quality
product and service offers. The Rustavi branch will develop both
corporate and retail banking activities. We must use the advantages
which we have from Societe Generale Group. Bank Republic would like
to get more and more involved in import, export and foreign exchange.
These are our competitive advantages which we must use," noted Hie.
As he later added, Bank Republic was recognized last month as the
most active bank in Georgia in terms of stock exchange. Its trader
has been awarded as the most active chief trader in Georgia.
"The new Rustavi branch will offer customers a full service package.
We will serve physical persons, small and large scale businesses and
provide services, all of which are provided in other large cities. BR
is employing 16 people in this new branch, 11 of the employees are
from Rustavi, the others from Tbilisi ," Aleko Lemonjava, Manager of
Rustavi Branch, BR, told The FINANCIAL.
Building up a universal banking concept, BR is striving to enhance
both corporate and retail banking activities. In terms of corporate,
they are extending a strong, long lasting relationship with key large
companies and a diversified portfolio of SMEs in various sectors
of industry.
Fully integrated into a worldwide banking group, BR is promoting
imports and exports with a high level of expertise to finance
international trade with a natural competitive edge compared to the
other local banks and aims to be the leader in foreign trade financing
with a tailor-made solution.
"We are the first company to form credit with the new Rustavi branch.
Bank Republic is a strong bank, with high quality services, and
we trust them. The opening of this new branch is good not only for
banks, but also for business," Natia Japharidze, Head of PR, GIT,
told The FINANCIAL.
"We have a very wide and large range of product offers in more than
50 countries. I think that the most successful bank in Georgia in
the coming year will be the bank that offers products and services
best adapted to the local market’s needs," BR CEO said.
Bank Republic is a leading commercial bank with rapid expansion of
operations in retail and financial services in Georgia. Employing
more than 750 staff, it serves its clients through 36 branches and
service centres.
Bank Republic owns an 11% market share in deposits and 7% in loans.
Bank Republic is also the second most profitable bank on the Georgian
market, achieving an average return on equity of 9% in 2005. Bank
Republic now controls 30% of the Georgian credit card market.
Bank Republic entered into agreement with Societe Generale Group and
EBRD on purchasing 60% and 10%, respectively, of shares of BR on 29
September, 2006.
In retail banking, BR is offering international standard quality
of products to individual customers (deposits, personal banking,
mortgage loans, consumer loans, plastic cards, transfers, electronic
banking) and a high quality of customer service, warm welcome and
truly professional attitude to each customer.
BR’s target is to provide high added value to the Georgian economy
and to be a participant in credit distribution to priority sectors of
the economy to help the Government of Georgia to successfully reduce
poverty. BR is participating in the "Cheap Credit" program.