ProCredit Bank Georgia to Increase Credit Portfolio by 8% in 2016

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The FINANCIAL — ProCredit Bank Georgia ended 2015 with GEL 29 million net profit. Despite reduced activity of businesses the Bank plans to have over 8% growth of its credit portfolio in 2016. Development of innovative services and investment in staff trainings will remain some of the main goals of the Bank this year.

The credit portfolio of ProCredit Bank Georgia amounted to GEL 921 million in 2015. The deposit portfolio was GEL 669 million. Net profit of ProCredit Bank Georgia was GEL 29 million. “We never plan aggressive growth in general. The Bank expects to have over 7-8% credit portfolio growth in 2016, in comparison with 2015. Our infrastructure, staff and the overall environment mean we are ready to achieve the forecasted figures this year,” Ketevan Khuskivadze, Director at ProCredit Bank Georgia, told The FINANCIAL.

As a result of the recently-changed business strategy in Georgia, ProCredit Bank expects to get better results in 2016 than in 2015. “A good example is ProCredit Bank Bulgaria which implemented reorganization earlier than we did and ended 2015 with impressive results. However, we cannot just rely on business models as each country has its own macro-economic conditions and a country’s specifics should be taken into account,” Khuskivadze said.

“The level of activity of businesses is not high right now. In general, businesses are closely observing macro-economic conditions. Investment projects are mostly issued by those entrepreneurs that have co-investment and participate in various government-initiated projects. This is a segment that has motivation to issue new investments in production,” said Khuskivadze.

According to Khuskivadze, overall 2015 was another successful year for the Bank. It will continue to provide reliable and socially responsible banking services to small and medium-sized enterprises and individuals.

The volume of overdue loans at ProCredit Bank did not increase in 2015 in comparison with the previous year. However, growth has been shown in restructured loans. It increased from over 8% as of 2014 to over 11% in 2015.

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“Overall, the quality of the loan portfolio in the banking sector has deteriorated. Worsened macro-economic conditions, reduced economic growth and devaluation of the Georgian Lari have contributed to it. All these factors impacted on business clients and the whole population,” she added.

The importance of reducing the high rate of dollarization within the Georgian economy has been high on the agenda since the Georgian Lari started experiencing dramatic devaluation. Lack of access to Georgian Lari in the long-term still remains a challenge for the Georgian banking sector.

“The dollarization rate in the banking sector is about 65%. The figure is over 80% at our bank as the major share of our clients are business clients, not individuals. In order to reduce the dollarization rate we plan to attract bonds denominated in Georgian Lari. The banking sector does not have access to long-term Lari; we have short term from the population. Our citizens do not make long-term savings in the national currency. Accordingly, our main focus will be on our business clients whose turnover is in GEL. We do not expect a significant reduction of the dollarization rate in our credit portfolio. Reaching 3-4% reduction of dollarization annually at our bank will be quite a good result,” said Khuskivadze.

In Khuskivadze’s words, if the conditions in the region do not further deteriorate, and remain as stable as they are right now, then further devaluation of the Georgian Lari should not be expected.

In 2016 ProCredit Bank Georgia plans to become a “house bank” for its business clients and individuals. Building long-term cooperation with them will remain a key priority for the Bank.

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The Bank will continue implementing innovative products for its customers. The main focus for the current year will remain the development of the self-service 24/7 Zone.

As Khuskivadze explained, the management of the Bank tries not to make interest rate the only competitive advantage of their bank. ProCredit Bank tries to attract clients with innovative services and support that is important for modern entrepreneurs.

During 2015 a special emphasis was made on the development and improvement of remote services in order to improve service for customers. All branches have been equipped with modern standards and innovative machines, and a self-service 24/7 Zone. This enables customers to do all basic banking operations at any time of day.

“Lots of interesting and innovative projects were offered to customers of ProCredit Bank Georgia in 2015. The Bank was the first to introduce universal ATMs, allowing one to both withdraw and input money. Another service Drop Box located in the 24/7 Zone allows customers to save time and deposit money into accounts 24 hours a day. More than GEL 4 million was invested by the Bank in this direction last year,” Khuskivadze said.

Since the beginning of 2015, ProCredit Bank Georgia set its main priority as the development of just the SME direction as its main business line. Withdrawal from the micro segment that was announced in the first half of 2015 was part of this strategy. Currently the Bank makes up 25% of the SME sector.

“In 2016 we will continue intensive investments in staff training. In addition to professional training, English language trainings locally and abroad at ProCredit academies will remain prioritized for us. Special courses for our mid-level managers will also continue to be offered,” Khuskivadze told The FINANCIAL.

 

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