The FINANCIAL — The FINANICAL interviewed Gilbert Hie, CEO of Bank Republic, regarding the global financial giant’s plans in the local market the current year.
Bank Republic, the leading local bank belonging to the big international Group Societe Generale (SocGen), is intended to increase its capital by minimum GEL 20 million in 2008.
Q. The recent trading scandal cost SocGen USD 7.5 billion. The big international group serves 45 countries across Europe, the Americas and Asia. How long will it take the bank to recover the loss and in which part of the world were SocGen’s activities affected most? Did it result in considerable losses in Georgia?
A. SG fraud accident which took place recently in SG Investment Banking led to loss of 5 billion EURO. The actions have been already undertaken and the rogue trader is in jail. The accident made no significant impact on SG financial status profit of which is close to 1 billion EURO (947 million EURO) even after the loss in 2007. SG Capital has been increased by 5.5 billion EURO on February 29th.The Group ensures high commitment on better control of investment banking and development of the corporate and retail activities, especially in fast developing countries and Central Eastern Europe.The acquisition of majority of stakes of RosBank (control from 20% to 50% February 11th) evidently indicates on the SG sound financial portfolio.
Initial plans of Bank Republic targeted for 2008 will not be changed because of this accident. BR capital will be increased by minimum GEL 20 million and will be pooled by the same amount of sub-loans. BR will continue the rapid expansion and growth strategy to open one branch every month and recruit 300 new employees per year. BR will continue offering the innovative products through high quality of service.
Bank Republic is strongly supported by the shareholders and lenders. SG total lines in favor of BR have been increased and resulted in more than 200 million EURO. The full trust and confidence towards BR is expressed by our main lenders EBRD (also shareholder), IFC and KFW. The negotiations with the new lenders are underway.
Societe Generale Group and Bank Republic always strive to keep the following in order to ensure customer confidence, good image and reputation of the Bank. We lead a transparent communication in Georgia and worldwide sharing its activities though various channels of communication like press conferences, media participation, and coordination with NBG and Banks Association of Georgia, in order to re-ensure our customers and keep full trust and confidence.
Q. BR intended to launch a big investment program in IT equipment and also IT security. In which countries do you have similar security software installed so far and how worthwhile are these luxury systems since even the world giant SocGen got outwitted by human smarts recently?
A. Recently, IT Department of Bank Republic together with UGT finished the implementation of the Centralized Data Storage Infrastructure Project. An integrated date storage system was created which implied installation of high capacity data storage systems and connection of critical operation platforms into the integral data network.
As a result of the joint effort of BR IT Department and UGT experts the Bank received an opportunity to consolidate data vitally important for the business and to increase reliability of IT services of critical importance. Implementation of the Project provided an opportunity to put in place automatic protection schemes. The aforementioned project was marked out as one of the successful projects implemented by BR.
Q. As for the physical security, recalling incident of BOG murder, what are the criteria that are a must for BR security personnel?
A. We have strong security system. We’ve not faced any problems or incidents so far. I feel it’s necessary to have a good security level at the bank in order to guarantee the safety of our customers both in the head office and in service centers or branch offices.
Q. As for Batumi and Poti, BR claimed to have development plans toward these to major sea surrounded regions of Georgia. How do you see BR activities in these regions since the free economic zone is finally announced?
A. Bank Republic is intended to expand throughout the whole Georgia, both in west and east part of the country. Last year in west Georgia we opened a new branch office in Samtredia and Kutaisi. But we have very interesting project about Telavi, Kvareli, Signagi and other big cites in East Georgia as well.
West Georgia is a strategic area for BR at this point. Kutaisi, being the second biggest city in Georgia, provides broad opportunities for banking sector development. The same is about Batumi and Poti, where we have big plans as well. Adjara region as a whole is a serious platform for running business. As for Poti, we’re opening a branch office there, as I believe it’s a rather promising market considering the implementation of the free economic zone in the region. Definitely, BR would like to be a major actor of the international business and especially as far as Poti and Batumi ports are concerned.
BR focus is to lead an aggressive network development both in Tbilisi and in the regions. In 2008 we are planning to open from 12-15 outlets in the whole Georgia and in coming years the total number of branches will reach 60-80. Indeed, we’ll increase the number of the Bank Republic branch offices in Tbilisi as well. Two new branches of Marjanishvili and Isani were opened at the beginning of this year already. That’s going to be soon followed by Tamar Mephe and Vazha Pshavela branches.
This year in Poti BR will set up a big branch. SocGen will be presented in this market and accompany the development of trade relations and finances coming from the Black Sea. This is a long-term strategic investment for us. As for Batumi, we already have one branch and one service centre there and in the coming years we plan to increase the number up to five.
Q. Have you already opened a service center at the Batumi airport?
A. BR already opened the service centers in both Airports last year, in Tbilisi as well as in Batumi. Though BR was presented in Batumi city long ago and our strategy considers additional branches to be opened there as well.
Q. As for BR expansion within the capital, which are your target districts for 2008?
A. In 2008 BR will increase its equity by 22 mln Gel in the first half of the year and go for a subordinated loan from the shareholders of the same amount in order to strengthen the bank for quicker development in the network and in IT for facing more aggressively and efficiently the competition.
Q. How many new branch offices were opened in the regions and in the capital in 2007 and what’s the expected figure for 2008?
A. Today, Bank Republic serves its customers through 37 outlets. Last year we opened 6 new outlets in regions and 5 outlets in Tbilisi. As I already mentioned, total number of outlets planned for 2008 will reach 12-15, that means we are opening each branch per month. Total number of ATMs we are having nowadays is 78, though we are planning to add more 30 ATMs this year.
Our core business is corporate and retail banking in this kind of emerging countries. The main tool is the network the main idea of which is to be close to the customer – close with good branches and with good products. Bank Republic network included 23 outlets when we took it, now we have 37 and our target is to enhance this number to 80 branches in the next three years.
We have already signed for opening a big branch in Batumi and Poti – because both cities are of strategic importance for us. We are also in Zugdidi, Samtredia, two branches are set up in Kutaisi – it is a big target for us and we’d like to have few branches there because it is a rather important area of activity, and we will also expand our network in other small cities in west Georgia. Concerning the east Georgia we have a rather ambitious plan and basically we will open branch in Telavi, Kvareli and Signagi – main branches. In Tbilisi we have just opened braches on Tsreteli Street, Gamsakhurdia Avenue, Isani and on Agmashenebeli Street. We have revamped all operational outlets in black and red colors in accordance with SG Group standards and all new branches will be made in the similar colors – so we view the future of Georgia in black and red. We are providing with best products and high quality of service though all our outlets.
Q. Top international companies enter Georgian market every now and then. What’s your policy in making them your corporate clients respect?
A. Traditionally BR was serving only corporate clients and still we will continue to be very active in corporate banking. Bank Republic had a very good and sound portfolio of companies with diversified risk exposure in many sector of industry and we are working very hard on it to provide our corporate customers with interesting and best banking solutions. And as Bank Republic belongs to an International Group we think that we have a very active role to play in two fields. The first product activity will be attracting foreign investors. Because SG Group is presenting in many countries in East and West Europe, we are in contact with many foreign investors who are interesting to invest in Georgia and we witness coming of investors each week. We believe that Bank Republic will play a major role in welcoming and channeling foreign investors in the Georgia for contributing to the development of this country.
The second big role for the corporate business will be international trade finance. Bank Republic will be offering to Georgian customers very practical and easy tools for importing goods abroad thanks to the SG network all around the world. This will also contribute to the good balance of foreign trade exchanges.
Q. HSBC, the leading bank in Europe is opening in close future in Georgia. Arabian KOR Bank, belonging to Arabian Abu Dhabi Group, has acquired the local Standard Bank, also Progress Bank, owned by ac Milan Defender Kakhi Kaladze and the Kazakh Halyk Bank are to be soon opened in the country. How do you see the banking sector competition outlook in 2008?
A. Today, Georgian market might be quite small but it is in start point of economical development circle, and still faces some difficulties; first because of a small size of the market; also small scale of economy and consequently limited resources of the financial market and second, because of that the Georgian financial system needs support of international financial institutions. In the past it has been substantially more difficult for the Bank Republic, like it is still difficult for any independent Georgian bank, because of the country risks, political risks and economic risks. But today this has become much easier for the Bank Republic because it has access to international finance. This is an obvious advantage as compared to other Georgian Banks who do not have similar opportunity. It is true, that the most successful banks in the country will be those offering the best products and high quality of service.
One of the important and positive parts of Georgia is the evolution of the economic and financial environment. For the last three years Georgia has made tremendous efforts for making sound situation in the country with less corruption, less custom duties, less taxes, Georgia has been made as the best reformer by World Bank. Georgia is attractive for foreign investors now and we know that the volume of foreign direct investment (FDI) in Georgia has been increasing for the three years and they will be increasing again.
SG primary approach in Georgia like in the former Soviet Union markets is to approach our activities with universal banking strategy. Being involved in corporate and retail banking is the main focus but we’ll also develop the activities in all the niche markets. Currently SG in Georgia offers all universal-banking services to an extensive client base that includes individuals, small businesses, municipalities and corporations.
Of course, it’s very much dependent on the social-economic environment in the country. If other approaches are developed right like in: asset management, in investing, we still believe that SG will take the opportunity to take focus on niche markets. It all depends on products, the more sophisticated are the products the greater are the opportunities.
Q. How do you see the stock market development prospect in Georgia? Might investment banking development get in focus of BR interests in the local market in close future?
A. The truth concerning the Georgian stock exchange is that we’re at the beginning of the development processes. Georgia started the activities only a few years ago. Securities market was not a common habit in this country but now there are people who work hard to promote Georgian stock exchanges. The fact itself is very positive because the existence of the stock market as well as its importance gives a good idea and drive for foreign investors to have a better view of the risk levels in the country and encourages them to come here.
Although at this stage the stock market in Georgia is very weak, it’s growing slowly and the more active it will be the more positive results we’ll get both for the country and for foreign investors. It’s very important when the country is venturing into free market activities to have an active stock exchange and we hope it’ll be developing right way in the future.
I think that the advantage and competitive edge of BR and SocGen in Georgia is to provide a global offer. As a global brand, as an international group, we can provide both: investment banking solutions for investing in Georgia and domestic solutions by means of BR for the local companies they’ll be running in Georgia.
We can help and assist our customers from the first day they have the idea of investing in Georgia by advising them, then financing their investments from abroad and finally financing their capital needs in this country. This global approach is a unique approach among Georgian
SocGen has been in the Georgian market for more than one year. Investment banking is not our primary focus for BR. However, related activities of the SocGen Group in Georgia are not driven by BR but from SocGen Paris. From time to time I have the opportunity to welcome teams from our central office and arrange discussions with the government and financial institutions in order to compose and set up suitable investment banking transactions for Georgia whether it is a public or private sector. I hope that in the coming months SocGen will be in a position to realize those transactions. But it will be more at the level of SocGen than at the level of BR, being a local bank.
Q. “BR involvement into the corporate governance improvement has started before SG acquired the bank’s stakes, quoting your words,” What are your plans in this respect for 2008 and how much is the bank’s annual budget allocated for CSR activities?
A. SocGen Group policy, being presented in more than 80 countries worldwide, is different in mature and emerging markets. In western countries CSR is probably not very important in the fields linked to human rights, war, and corporate governance but is more oriented at environmental issues, climate changes, sustainable development, pollution, and carbon issues. Whereas in emerging markets like Georgia, corporate governance should be a priority, also human resources like training, education, ethics, practices and social behaviour. Indeed anti money laundering issues are very important for the local banking sector.
As a member of the SocGen Group, I personally have sensitivity to CSR globally but it’s also a part of my job as BR CEO to keep on implementing CSR at the bank even though it already existed at BR before the French Group took interests in BR capital. The time has come to structure it and Global Compact is giving us an excellent opportunity, as a catalyser, to organize CSR in a better way. CSR should be a day-to-day value in the banking industry as well where we have a special role and responsibility financing the country’s economy. Consequently, banks play a social role in the local economy. Indeed, it’s essential that banks pay attention to people in need of resource. In this regard, BR is involved in micro-lending activities in favour of very small businesses and start-ups, we’re also engaged in issuing student loans, and mortgage loans enabling people to have decent houses and live in comfort at acceptable prices.
The Georgia Corporate Governance Project, funded by the Canadian International Development Agency (CIDA), worked with the BR intensively for 14 months. The project helped Bank Republic implement greater transparency and disclosure practices, for more accountability to its shareholders and clients. It worked with the bank to increase the decision-making power of the Supervisory Board, and helped staff the Board with independent directors.
IFC has worked with Bank Republic since 2005, when BR participated in IFC’s advisory program to implement corporate governance best practices. IFC helped the bank introduce greater transparency and disclosure principles, increasing its accountability to shareholders and clients. IFC also helped to staff the bank’s supervisory board with independent members, strengthening its decision-making power. Good corporate governance is one of the parameters that Société Générale is always looking at. We need to team up with a sound institution with whom we can share our experience and culture. After the first contact with Bank Republic and Lasha, we knew it was the type of bank that could fit into our Group.
Q. Since SG acquisition of BR stakes, the bank’s logo has changed, though the name remained the same. Is it a part of SocGen strategy or were there any unique features about BR brand loyalty why you decided to maintain the existing name?
A. In Georgia, like in other countries in Central and Eastern Europe including CIS space, SG global strategy is to enter into all emerging and fast growing market and to take a bigger market share there because we see here a potential of growth. We enter at fast growing markets if view possibilities of rapid expansion. I am really glad that we are first, though I know that other European and French banks were also interested in this market. When we were studying Georgian market, we had the chance to contact Bank Republic. It was attractive for us by its volume (neither leader nor the last), no other bank was holding its capital and thus was free in making decisions. We found a bank that had a good name, good reputation, serious and qualified services communicable shareholders. We have very good mutual understanding with the shareholder and Chairman of the Supervisory Council Lasha Papashvili. During the negotiations we found out that our ideas and values were the same. Therefore, in case of joint effort more effective beneficial and long term cooperation could be ensured. This mutual understanding and shared values and ideas give the Bank Republic a possibility of successful development
I don’t see a big risk in rebranding; on the contrary it brings lots of advantages to the bank. The main message bout BR rebranding was to show the bank’s from now on belonging to the big international group. Hence, international market associated brand name provides broader opportunities for being a success in the local market. On the other hand, integration of BR into SG group is a competitive edge for the bank’s awareness in the global market.
I think a bank should have a good image globally, that’s the major factor why SG group decided to keep the name of Bank Republic. The logo has been changed only to show that the bank belongs to the big international group. So, it’s a mixture of a good name, good practical activities in the country and good new competitive edge for the bank in Georgia.
Q. How important are Fitch and S&P ratings for the bank in terms of the raised corporate loyalty in the local and international markets?
A. So far we have not been interesting in getting an independent rating as we are a 60% subsidiary of SG and considered as a part of the rated SG Group.
We have constantly an easy and direct access to the international markets which will become a tremendous competitive edge in 2008 when liquidity will obviously shrink down for most of the banks in transition countries. We are not in the situation of an independent Georgian bank who needs to build up a strong credibility.
Q. Internet Banking, Telephone Banking, professionally designed website,-how efficient do these remote online services appear to be for BR in terms of retail banking development?
A. It is really very important because today banking activities are very much dependent on the quality of online services. Especially in retail banking we are developing high quality products and good efficiency in distribution.
Internet banking and all these new distribution channels including telephone banking are the future. Only physical network is not enough, we need to be very active in every distribution channel. Internet and well-developed web site is the top priority in this regard. Definitely we’ll further improve the Internet banking services, develop higher-level security for our customers. This is the service, being one of the most efficient distributional channels ever, which is already being used by many corporates and individuals and we’ll do our best to develop the approach in future.
Q. New developments require constant update of information with the customers. How much is BR annual advertising budget?
A. The budget is increasing every year but at this stage the figures are remaining strictly confidential and from a strategic point we usually do not communicate on this kind of details
Q. Last year BR was the first bank in the country to launch mortgage loans with the least of 13% rates to its customers through the brand new My Nook project. How popular has the initiative become so far and what’s the overall volume of credits issued in this respect up to now?
A. We started in late of 2007 the organization of our new mortgage product offering three different products for acquisition, modernization and construction. And here we were first to offer definitely the best ever product on the Georgian market as we fixed the interest rates starting 13% for mortgage loans with the tenure ranged up to 25 years – this was really the best offer for the market.
On top of that we were working hard to present eight new lending products for individuals including personal loan, consumer finance, and car loans with a very simple crediting conditions because we want to offer simpler solution to our customer. So during 2007 we had completely revamped the full range of products with deposit product, mortgage loan and lending short-term products for people to buy goods.
Also we will be much more active in consumer finance because we have already agreements with hundred shops in the country in order to finance the purchase of the people in 100 shops with comfortable conditions.
Q. “We have a very well educated young staff but inexperienced. This is the reason why we have recently launched a training center at BR,” you told the FINANCIAL a year ago. What‘s the total number of youth employed through the training center in 2007?
A. As far as the number of staff in BR is concerned, I can say that more than 300 employees were recruited for BR last year and nowadays, total number of BR staff exceeds 800. We are planning to recruit at about 300 staff per year, as far as we are focused on aggressive network development strategy. We have very well educated young people on our staff but still slightly inexperienced in the field. In order to get named as a bank of a top rate of success, it is very necessary to have well-qualified staff. This is the reason why we have launched a training centre at BR. We feel that since the launch of the training centre, the bank will have the best-trained staff in the banking sector. The training centre has been active for a year already. Since creation of Training Centre around 2082 employees were trained and 19401 total training hours achieved during the training sessions delivered on 45 different topics.
BR will train around 300-500 people a year. Moreover, we were participating in establishment of training center organized by Banks Association of Georgia, in order to train and educate people in banking system.
Q. As a former recruiter, what do you regard to be the basic issues to be considered while hiring new employees?
A. It is important to get the right staff at the right place together with the right level of professionalism and experience which is the biggest challenge in transition countries.
We need to have a good and balance mix of experienced people from the competitors together with fresh graduates showing high potential.
And BR doors are largely opened to all those who would like to pursue a domestic, regional or even international career.
Q. BSI and Pedersen & Partners are the two well-known recruiters in the local market. Do you refer to their services in terms of HR issues? Do you refer to attracting sources from rival banks, the so called Head Hunting approach?
A. I would say, I’d be glad to have more professional headhunting companies in Georgia. They could help us find right persons to be employed at the bank. The expertise in this sector has to be developed because today we have more than 800 staff and in the coming years we reach a thousand and definitely we’ll appreciate headhunting activities.
I could remember the Singapore case. For instance if you go to Singapore where there are around 250 banks you’ll face a definitely terrific headhunting precedents. That’s far different from the situation in Georgia.
Besides well-know recruiter companies, we are having the source from educational system as well. We are sponsoring and assisting the clever and intelligent students at various business schools in Georgia like CSB, ESM and finally we are recruiting already well trained and educated people.
Q. BR’s started working with the local companies in terms of mystery shoppers services. What was your primary motivation for launching this initiative?
A. BR already started working with the local companies in terms of mystery shoppers services as it’s a new service in Georgia. I consider it a bit early to speak of efficiency at this point. As soon as we have the answers we’ll get the opportunity to better develop the banking products and services.
At this stage after one year of change management it is important for BR to check the level and quality of service provided to our customer base through independent mystery shoppers as it is a common practice for SG in all developed countries.
Our primary goal is to offer the best quality of service in the Georgian banking market. BR has always been well recognized for that and we are working hard in bringing up our quality to SG Group standards which are even higher.
Q. Your last occupation in France was in an international division in Paris. Considering your 2 years of direct experience in Georgia’s banking sector, how do you see the country’s perspectives in terms of accessing the international financial markets?
A. All in I have now more than 25 years experience in 7 countries and 5 continents and I can confirm that Georgia has still a lot to do for having a large and satisfactory access to the international markets but things are going quickly down here and many people in banks and Government are working hard to accelerate the process. However it always takes a few years of fierce battle even when the political, social and economical environment is going smoothly.
Q. BR was the first bank in Georgia to construct a Head Office of its own. Was your head office in Paris also engaged in the construction planning at some extent and what’s the reason why you chose Arch Studio?
A. The company involved in BR new head office construction was Arch Studio. By the way, it’s the only bank in Georgia that has constructed a head office. Some GEL 20 million was provided for the construction works.
BR has a clear-defined strategy in this respect; we cooperate with the construction company either in terms of construction financing or property selling and in no way both directions. Otherwise it would be like a delicate bubble which sooner or later is going to burst.
It’s very important for the bank to have a modern constructed head office because you have organized everything under the same roof. The strategic location just in the very center of Tbilisi is also very important.
As for Archstudia, from time to time they’re involved in the construction of our branch offices as well but as a rule the bank usually announces a tender in this regard.
Q. How well paid are bank employees in Georgia compared to the CIS and western salary standards?
A. BR employees are well paid, just as their colleagues in Georgia. It depends on the position occupied. Staff recruitment is very important in banking sector. We’re recruiting people from other banks and they’re recruiting our staff as well. There are no special institution providing market surveys but we know that we’re in the top list.
Q. What are the best demanded positions at BR both in terms of lower and top management level?
A. I think that recently the biggest demanded was obvious in retail banking. We’ve trained a number of retail business officers. Many banks are looking for qualified staff in this area. The demand on retail banking employment is higher than on corporate or investment banking.
Q. BR is a subsidiary of SG Group that’s already listed on the Paris stock exchange and on the Tokyo stock exchange. They are also traded in the United States under an American Depositary Receipt (ADR) program. Did you face any difficulties in this respect since the recent international scandal?
A. It’s not a priority for us and BR will never get listed on international stock exchange. We’re subsidiary of SG group that’s already listed on the Paris stock exchange and on the Tokyo stock exchange. They are also traded in the United States under an American Depositary Receipt (ADR) program.
The main reason for getting listed on international stock exchanges is rising to international markets that we don’t need. BR is a bank with SG press, having good relations with the international financial institutions like: IFC, EBRD, KFW- the ones who are also good sources for financing.
Q. for SocGen the market of Russia is the second most important market after France. Could you name the top Russian companies being BR corporate clients in Georgia?
A. SG has a far big presence in Russia today. It’s a part of SG group global strategy to be presented in western and Eastern Europe and eventually in CIS countries. Of course, SG ambitions are broader than Georgia’s a small market and we’re here since 2006 only whereas in Russia the Group has over 10 years history. Since then SG invested in few different financial companies. We see a big potential in Russia because it’s a niche market.
In addition, just after the accidental fraud happened in SG investment banking, the Group has acquired the majority (50%) of RosBank stakes and acquired the control over the Bank in 2008. RosBank is a powerful player in the Russian banking sector. It’s network covers more than 80% of Russia.
Q. France Georgia Chamber of Commerce was recently established. What are the concrete projects you as the Chairman are intended to carry out in 2008?
A. As the biggest French investor in the country, SocGen would like to be the major banking actor in the trade relationship development between the two countries. We think that BR directly belonging to a big international Group gives an important edge to open Georgia to the whole world.
Under BR initiative, the French Business Council was launched in Georgia to promote the open market system in Georgia and foster French-Georgian business relations in order to contribute substantially to the expansion, modernization and enhancement of Georgia’s international trade and investment. The General Assembly of FBC-Georgia was organized in the Head office of JSC Bank Republic on February 14. We have the full support of the French Government via the French Embassy and the Ambassador Eric Fournier, as well as the Economic Mission for the Caucasus, which is based in Baku and the Commercial Attaché based in Armenia, who will help us in executing this project, the organization is supported by France through the Chamber of Commerce and Industry of Meurthe and Moselle, and on the Georgian government side the Council is supported by various ministries and the GCCI.
The decision for setting FBC-Georgia is a very good mixture and team work between the public and private sectors. It is the initiative of businessmen and companies established in Georgia to set up this private organization with concrete support of the public sector. We believe that the success of this business club should be in good and efficient cooperation between public and private sectors, both having strength, while combination of this strength will make this project successful, FBC-Georgia will work as all chambers of commerce or international business clubs set between two countries. We will promote trade, commercial partnerships and French investments, collect and provide entrepreneurial information, statistics and guide for investors, act as business consultant for French investors, organize, promote and sponsor commercial events both in France and in Georgia in order to attract investors and allow French and Georgian partners to find suppliers and customers in the other country. We will also have good contact with other organizations like the International Chamber of Commerce (ICC), EU-Georgia business club, which is working on projects for SMEs, the French Ministry of Economic Development and the French Foreign Trade Councilor, which is a French organization promoting trade between France and other countries.
In 2008 FBC will be very active in the fields of agribusiness, tourism, health and foreign trade in general as well as in attracting French investors to invest in Georgia. one of the most important missions of the French Business Council is to assist small and medium-sized businesses to open the door to exports to the other country, which will be crucial for the Georgian economy in 2008. We believe that this is important for SME development and constitution of Georgia’s strength in commerce and industry in years to come, as well as having a social aspect to it. We want this business council to provide commercial community with a “win-win” situation and for Georgia to have easy access to French partnerships. French investors will discover and know the country better and we are aiming at convincing them to invest here because there are fantastic opportunities for that. In this situation Georgia and France will enhance the global relationship and will both gain in creating opportunities for work with each other, which is always positive as it will develop French investments in Georgia and Georgian exports to France.
Q. You’ve left the family members and all the relatives and friends of yours in France. How often do you travel to your homeland and, being engaged in the top international giant SocGen, how do you mange combine business with personal life?
A. It is always a headache to reach the perfect combination in personal life when you are an expatriate. Today my 2 boys are more than 20 years old and both are living in France after having spent all their life abroad together with using family life. I try to travel at least every 2 months to visit them in France and they are also coming to Georgia for a few days from time to time.
Q. Do you have any private business apart from your major engagement in SocGen?
A. Absolutely not. It is clear that one cannot manage a SocGen subsidiary and run an independent business in parallel.
First of all it is strictly forbidden by the internal SG rules and second there’s is absolutely no time left to possibly take another kind of engagement.
SG Group as most of the other international banking groups is very demanding to its executives and keeps them very committed, fully dedicated and always busy.
The only extra task I accepted out of BR duties is the creation of the «French Business Council – Georgia " which target is to foster the business relationships between Georgia and France. This last one is also an additional challenge but is developing extremely well.
About the company: It has been already one year since Societe Generale Group took over controlling interests in Bank Republic (60% stakes). The access to the global expertise of Société Générale Group is one of the main strengths for Bank Republic. The Bank is equally strong in Corporate banking as well as in Retail banking and can provide any kind of investment banking services through SocGen Group. Bank Republic’s competitive edge is definitely its large international expertise in favor of foreign investors and for developing international trade and in finding foreign partners.
Bank Republic/Societe Generale Group is one of the most successful financial institutions, thus being on the leading position in the corporate and retail banking market of the country. The success of the long-term policy relies on the fundamental values of the Bank: professionalism, innovation and team spirit. As am member of the Societe Generale Group, Bank creates more value for the clients by drawing on the combined resources and expertise of the Group.
Bank Republic successfully combines the fundamental knowledge of the specific characteristics of the Georgian market with the highest Western standards, thus being recognized as the most reliable and dynamically growing structure among the financial institutions. Bank Republic rapidly develops the corporate, retail and other financial services and offers the universal banking services to its customers. Bank Republic employs more than 750 staff members and serves its clients through 36 outlets.
The activities of Bank Republic are focused on the customer and their business opportunities, growing in line with the rational distribution of potential by Societe Generale Group and the remarkable achievements of the local financial institutions.
Bank Republic is the fifth largest bank in the Georgian Banking system according to its Total Assets volume and the fourth by the Total Deposit Portfolio. The Bank owns 11% market share in deposits and 7% in loans. Bank Republic now controls 30% of the Georgian credit card market.
Foundation History: Bank Republic, one of the oldest and reliable financial institutions, was founded in 1991. Bank Republic is a leading commercial bank with rapid expansion of operations in Corporate, Retail Banking and Financial Services in Georgia. Employing more than 700 people, the Bank serves its clients through 36 branches and service centers. The Bank owns 11% of the consumer market share in deposits, and 7% – in loans. Currently, Bank Republic is the fifth largest bank in the Georgian banking system by total assets, and keeps the fourth ranking position by the total deposits portfolio. On September 29, 2006, Bank Republic entered into agreement with Societe generale Group and EBRD on acquiring 70% of the BR shares.
Market Shares:
Total Assets – 7.3%
Loan Portfolio – 7.6%
Total Liabilities – 8%
Deposits – 8.6%
Individual Persons Deposits – 9.6%
Stakeholders: SG-60%; EBRD-10%; Lasha Papashvili – 25%; Gocha Matsaberidze – 5%
Number of employees: 822
Partners: SG, IFC, EBRD, KFW.
Competitors: Bank of Georgia, TBC Bank, VTB Bank Georgia, Procredit Bank, Cartu Bank;
Financial data:
(Data is based on un-audited financial results)
Trend of Income Statement Indicators
Trend of Core Balance Sheet Indicators
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Written by Kate Tabatadze
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