The FINANCIAL — “Prices of real estate in Georgia have decreased because of the crisis; the costs of renovations are also decreasing. It is a good opportunity to open branches at cheaper costs and we will continue benefiting from this situation in order to have a larger network of our bank ready for when economical activity starts picking up again,” Gilber Hie, Chief Executive Officer of Bank Republic, Societe Generale Group, told The FINANCIAL, at the opening of a new branch in Mukhiani district, Tbilisi.
“It is very important that we find the solution to restoring real estate sector growth because it was one of the main drivers in this country before the crisis and will remain so in the future. It will not be easy to solve the current problems and will take several months but we hope that this direction will soon be restored,” Hie says.
“However Bank Republic is not solely oriented on real estate and construction business financing,” says Nikoloz Alavidze, Head of the Corporate Banking Division.
“As for other business directions, we are open to everyone. We pay large attention to the management of the companies we work with and the healthy situation in these organizations. You can still find management groups in Georgia that have largely managed to avoid the effects of the crisis,” says Alavidze.
Hie believes that the most important thing is to restore the confidence and trust of foreign and local investors so that they continue investing money in Georgia as they were before. “Georgia is in the process of changing and it cannot develop without the support of its neighbour countries.”
“We are definitely being strict about the disbursement of loans and are focused mainly on prioritized businesses and companies. As a result of reduced resources, we have raised interest rates. But we are also offering credits with favourable terms and rates to our smaller clients. In giving out credits we are not solely prioritizing businesses though,” Alavidze notes.
At the opening of its new branch the executors of Bank Republic awarded the thousandth client of Megobari Deposit with popular products offered by BR.
“In the last two months BR managed to attract 1,500 depositors with its newly launched Megobari Deposit. The advantage of Megobari Deposit is its flexibility. In addition, customers are able to withdraw their money whenever they would like it. Besides this, the interest rate on the above-mentioned deposit is very high,” says George Suladze, Head of the Retail Banking Division.
Bank Republic plans to open its next branches in Kakheti and Gori. “We are not afraid to open a branch in Gori, which was a centre of conflict during the Russo-Georgian war in August 2008. The risk factor is following businesses everywhere at the moment, in Gori, New York and Hong Kong alike. But by our activity we are trying to underline and do our bit in the development of these regions at our disposal,” Alavidze declares.
Against the background of the current recession, most of the banks in Georgia have problems regarding deposit portfolios. “Bank Republic is the exception. The fact is that customers who have had their incomes shortened have started spending their reserves and this is reflected in the total number of deposits in the banking sector,” Suladze notes.
“Georgian banks have managed to avoid the hardest effects of the recession with the active work of National Bank of Georgia and organized teamwork and the support of international financial institutions. We can’t say that the Georgian banking system is well experienced, but in regards to dealing with the crisis we are certainly better trained now,” Alavidze comments.
Presently Bank Republic offers its customers eight types of deposit products.
“Like every other bank Bank Republic faced the issue of problematic portfolios. In these cases we have been offering our customers restructuring of their loans. Each of them is able to consider us their partner. Frankly, we are oriented at overcoming the crisis together with them,” Suladze notes.
“Bank Republic is active in order to finance and support the development of small and middle-sized businesses however demand for this has shrunk. This was not caused by the strict rules of our bank. We are still focused on financing businesses but we need to be sure of their perspectives,” Suladze says.
“Last week Societe Generale published the results of its last three months’ work. The results were not as high as previously as a result of the hard economical times. Societe Generale had to increase its reserve fund and accordingly profit was reduced,” Alavidze says.
“The present economical crisis can be considered a lesson and experience, albeit a hard one, for everyone” Alavidze says.
“We have our theoretical knowledge which we were taught, and now we will have practical skills down to our experience. The current recession is not typical to previous ones as it has a different, modernized direction and accordingly was harder to foresee and avoid.”
“For Georgian customers it is very important to only invest money in a bank that is very secure and reliable. I definitely think that Bank Republic today is one of the most reliable banks in the country. It is insured by the largest international financial institute and accordingly all of our customers can have high trust in our bank in the future,” declares Gilbert Hie, CEO of Bank Republic, Societe Generale Group.
Written By Madona Gasanova
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