The FINANCIAL — A new IPO+ announced by Bank of Georgia, one of the leading local banks, is offering the unprecedented low- 14% mortgage loan rate, the credit sum availability being GEL 240,000 and the loan expiration term – 14 years. The IPO+ initial resource is USD 40 million.
“The IPO+ with refreshed conditions is attractive not only because of the rate, but because it also provides the owner with full service. What’s more, IPO+ customers will offset bank accounts,” Kote Tsereteli, Co-Head of Retail Banking, Bank of Georgia, told The FINANCIAL.
Offset bank accounts took the UK by storm in 1997 when Virgin and the Royal Bank of Scotland launched the Virgin One offset mortgage account. It was simple – people who had both savings and a mortgage could offset their savings against their mortgage. Wikipedia.org’s page on offset mortgages indicates that they are most common in the United Kingdom.
“We had only a short loan issue break following the National Bank of Georgia’s statement for the local banking sector. Currently all bank of Georgia credit cards are available, such as: Populi Card, Magti Card and Orange, in the local currency though,” stated Irakli Gilauri, CEO, Bank of Georgia. “We also restored consumer loans at shops, though people can’t get cash loans. We avoided giving out loans to be spent frivolously. Instead of a consumer loans, we are just offering a simpler solution of credit card – IPO+, Auto+, POS loans – which completely meets local market demands.
Gilauri doesn’t link the decision of denominating the new IPO+ only in GEL with the post war situation, when about USD 180 million was sold by National Bank of Georgia.
“The IPO+ denomination in GEL has nothing to do with NBG selling that big volume of USD. The demand on national currency was caused by two factors: the first being that during and after the war the Georgian Lari showed its resistance and the second – that people buy things in GEL.”
The bank is holding negotiations on the investment of around US$ 20 mln in Aldagi BCI for the further development of the business, including development of clinics and a hospital in Kutaisi. The bank is also holding talks on the additional investments in Galt&Taggart Capital.
Bank of Georgia is having plans about its Orange Card which will be announced in the end of October.
Bank of Georgia provides a full range of commercial and investment banking, asset and wealth management, insurance, leasing and card processing services to its corporate and retail clients. The largest retail bank in the country with an approximately 33.9% market share by total assets, Bank of Georgia serves over 880,000 retail clients through its network of 142 branches and 363 ATMs (the largest ATM footprint in Georgia), as well as through other delivery channels including the Internet, mobile banking and state-of-the-art call centre. The bank, together with its wholly-owned subsidiaries, is organized into the following Strategic Business Units ("SBU"s) – Retail Banking (RB), Corporate Banking (CB), Insurance and Corporate Centre (CC) and Business Units ("BU"s) – Asset Management (AM), Wealth Management (WM) and Galt & Taggart Securities (GTS). The bank's net income for 1H 2008 amounted to GEL 60.3 million (US$42.5 million) on a consolidated basis, while its equity book value and total assets stood at approximately GEL 783.1 million (US$552.2 million) and GEL 3,401 million (US$2,398 million), respectively. As at 30 July 2008, the bank's ROAE and ROAA were 17.3% and 3.8%, respectively.
On 29 November 2006, Bank of Georgia became the first company from Georgia and the second bank from the CIS to list its shares in the form of GDRs on the London Stock Exchange (LSE: BGEO). A benchmark stock on the Georgian Stock Exchange (GSE: GEB), Bank of Georgia has been listed on the GSE since 2001. As of 30 July 2008, the bank was approximately 87% institutionally owned, with the remainder owned by senior management and approximately resident and non-resident retail shareholders. Bank of Georgia remains to be the only Georgian entity to be rated by all three global rating agencies: ‘B/B’ from Standard & Poor’s, ‘B3/NP’ (FC) & ‘Ba2/NP’ (LC) from Moody’s and ‘B/B’ from Fitch Ratings.
Written By Madona Gasanova
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