The FINANCIAL — Kor Standard Bank, owned by Dhabi Group, one of the largest international investment groups, expects the economic growth in Georgia to return to a normal pace by May 2009.
“We remain optimistic in our views for the future and believe that working together with the government and people of Georgia we will overcome all challenges for a brighter tomorrow,” said Adnan Anwar Khan, who has been recently appointed as General Director of Kor Standard Bank.
Kor Standard Bank is keeping a very close eye on its costs as a matter of the bank’s policy, but reducing salaries is not an option that they’ll be considering. “We are planning to expand our operations; therefore our number of employees is likely to grow over this period.”
Limitations on giving out loans were a temporary measure taken by the National Bank of Georgia (NBG). In times of such crises these kinds of precautions are normal.
“As far as the mortgages are concerned we are at the moment allowing mortgage loans to qualified customers, however there are currently not many business links between us and construction companies. Therefore we’re not involved in such kinds of mortgages,” claimed Mr. Adnan.
“We are a full service bank. We focus on all three areas of banking which are corporate, small and medium size enterprise and consumer loans,” said the company representative.
The bank is bringing in new liability products for the customers. Kor Standard will continue to focus on all four areas of operations, deposit mobilization and corporate and consumer lending.
KOR Standard Bank is backed by the strength of Dhabi Group, which has 100 % equity interest .The group is actively participating in various investment activities in countries of the Middle East, CIS States, Pakistan, Bangladesh, Iran, Afghanistan, Uganda & the Republic of Congo. By this time, the market value of the Dhabi Group portfolio can be easily stated to be in excess of USD 10 billion.
At this moment the Dhabi Group has three basic ongoing projects in Georgia. Besides the bank the group has Warid Telecom, which is a telecommunications company. The group is going to bring in the Wimax internet solution and telecommunication. It’s a USD 100 million project. Another investment is the Kempinski Hotel project which is going to take off in the next few months.
“For the banking industry one of the important things is to be in the right place to invest in. You need to be very clear in where your exposure should be; in what kinds of industries. The selection of customers is another important challenge for banks.”
According to the General Director of Kor Standard Bank the trade pact which was recently signed will facilitate trade between Georgia and the EU. It will help Georgian importers and exporters to do business with the European Union on more favourable terms. This will have a great impact on the development of the Georgian export sector.
“At this moment the most important thing is to re-brand the bank in the next two months and also bring in new products and services. This process will continue in the future too,” said Mr. Adnan.
“We look at Georgia as a long term investment, our plans here are long term and our feeling is that the conflict could have its influence on the economy of Georgia in only the short term. Thanks to the international support that the country is receiving we think that Georgia will recover very soon from this downturn. We expect the economic growth to get back to its normal pace by May 2009 at the latest,” Mr. Adnan told The FINANCIAL.
Dhabi Group operates in various locations, has a wide range of contacts with group companies and banks. At this moment Kor Standard Bank has very strong liquidity and has funds which they would like to invest in the Georgian economy. If there will be need Kor Standard will receive support from its international partners. According to the bank representative today there is no requirement for this.
Considering the liquidity situation on the local market and the measures taken by NBG, it is expected that the banking industry will become stable soon. National bank and IFC have been very positive in providing liquidity to banks. Because of these efforts none of the banks in Georgia faced local or hard currency shortages.
As was said by the General Director of Kor Standard Bank, thanks to NBG the confidence of customers has remained strong. Banks have now substantially recovered from what they faced initially.
During the war the bank didn’t finance its corporate clients. Immediately after the war Kor Standard Bank started financing corporate clients. Among them were large corporate clients including oil companies and other companies which are importing essential goods into the Georgian market. None of them are Russian companies.
Kor Standard’s previously approved expansion plans are not being altered. The bank had been planning to open six branches and two of them are open already. The other four will be opened before the year end.
Kor-Standard Bank holds a unique position within the banking sector .Nearly one third of Tbilisi resident households pay utility payments through these bank outlets on monthly basis. Bank management strongly believes that this particular asset should be especially valued and more focus should be put on deepening the existing relationship with customers.
Written by Levan Lomtadze.
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