The FINANCIAL — Bank Republic (BR), the Georgian bank belonging to Société Générale 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 Société Générale 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 Société Générale 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 Société Générale 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.
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