The FINANCIAL — On October 31 Bank Republic celebrated its two year partnership with Societe Generale Group and European Bank for Reconstruction and Development. Jean-Didier Reigner, Societe Generale Head of Europe attended the special celebration event in Tbilisi. On the same day a new branch of Bank Republic, Societe Generale Group was opened on Vaja Pshavela Avenue, Tbilisi.
“It’s important for me to come and visit all countries and especially Georgia, which has recently overcome a very hard period. I came here to support the people of this country, in particular the staff of the bank. Our employees are our main priorities. Business in Georgia is continuing as usual and one of the examples of this is the opening of a new branch in Tbilisi. We plan to open in total 50 branches by the end of 2009 and my message is that Societe Generale is here! We are continuing our work successfully and we support Bank Republic,” Jean-Didier Reigner, Head of Europe Societe Generale Group, told The FINANCIAL.
According to Mr. Reigner, the biggest loss for customers during the time of crisis was the interruption of loans. But as we already know, Georgian banks only stopped issuing loans for a short period and then resumed it. We are interested in delivering money to the local population. The opening of a new branch is directly connected to our interest in supporting people monetarily.”
Societe Generale is one of the largest financial services groups in the Euro-zone. The Group employs 151,000 people worldwide in three key businesses: Retail Banking and Financial Services; Global Investment Management and Services; Corporate and Investment Banking.
IFC provided a USD 7 million subordinated loan to support Bank Republic’s capital and a USD 15 million senior loan for mortgage financing in September, 2008. The 10-year senior debt is the longest tenor offered by IFC to a Georgian bank. This will enable the bank to provide more affordable mortgage loans during times of tight liquidity.
“Bank Republic is a reliable client of ours and valuable partner in the region. With this new investment our cooperation will be brought to a new level. IFC is looking at opportunities to finance projects that will have a targeted impact and significant contribution to boosting the economic growth in Georgia. The new transaction with Bank Republic, which has a well diversified portfolio, will allow us to achieve such an impact,” said Snezana Stoiljkovic, IFC Director for Central and Eastern Europe.
Bank Republic will open five more branches by the end of 2008 throughout Georgia. The planned strategy is being implemented without any obstacles. BR is becoming available in each district of Tbilisi and the regions, BR representatives said.
“We are spending millions annually on the expansion of our branch network. Last month it was a branch in Telavi, Kakheti and next month we plan to open another branch in Digomi, Tbilisi. We are going to open 13 or 14 branches in 2009. For 2008 the amount of investment has reached over USD 5 million,” Gilbert Hie, Chief Executive Officer of Bank Republic, Societe Generale Group, reported.
In 2006 Bank Republic entered into agreement with Societe Generale Group and EBRD on purchasing 60% and 10% of shares of BR respectively.
“Bank Republic is working very closely with international financial institutions, especially EBRD and IFC. For 2008 the total financing program of EBRD in Bank Republic is over USD 50 million. At present Bank Republic is in negotiations with Asian Development Bank for 2009,” Hie added.
The Asian Development Bank (ADB) is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 67 members, 48 from the regions and 19 from other parts of the globe. ADB’s vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens.
The largest share holders of the ADB are Japan and the USA, each holding 15.57% of the shares.
A new branch of BR was projected and built by REDIX.
“We spent about USD 1.5 million at the branch. We employed new staff for this office. After Societe Generale Group’s entrance at BR, we increased the number of employees fourfold and reached 900 staff in total,” Lasha Papashvili, Chairman of the supervisory board of BR, announced.
As Papashvili, Chairman of the supervisory board of BR and Director of Construction Company REDIX commented: “At present time prices at REDIX have not been changed. This can only be influenced by global market tendencies of building materials. As for the sales pause on the real estate market, it’s a global tendency and caused by the monetary crisis. But this will soon be improved. As the main Georgian banks and the whole country received a big number of financial supports. Today Societe Generale’s Head of Europe was present at the opening ceremony and this fact is very important. We can consider this a part of the chain. All of us saw how important France was during our political destabilization,” Papashvili stated.
As Papashvili announced, all sorts of loans have been fully restored.
“The restoration of the banking system would sustain the real estate business, which holds one of the most important parts of the Georgian economy. What we need is a combination of financial solutions, economic programmes and social projects to restore the financial expectations of our customers in the banking system, which is directly connected with stabilization of the country’s economy as a whole,” said Gilbert Hie in an interview with The FINANCIAL last week.
Written By Madona Gasanova