Progress Bank Increased Assets by 150% in 2015 

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The FINANCIAL — Progress Bank has seen an increase of its assets by 147%, loan portfolio – by 97%, and deposits – by 150% in 2015 in comparison with the previous year. The main part of the credit portfolio of the Bank has been made up by trade. The Bank plans to increase its activity in financing the service and tourism sectors. The main focus of Progress Bank remains the implementation of remote services.

In his exclusive interview with The FINANCIAL, Akaki Kordzadze, Director General of Progress Bank, assessed how the current year has been for the Bank and also talked about its future plans.

Q. How would you evaluate the current year for Progress Bank?

A. 2015 has been a period of preparation for further activity on the market. During the last eleven months we have undertaken market research and prepared competitive products. The Bank updated its software, as well as implementing and developing distance services. Customer-oriented internal procedures were also created and improved. The Bank hired new, qualified staff. Rebranding of the Bank was one of the most important steps to take place during the year. We formatted our organizational structure so that it is in line with achieving our goals.

During the implementation of new products and technologies the Bank is focused on services offered by Georgian companies, thereby contributing to the development of local businesses and raising their competitiveness with respect to foreign companies.

Despite the fact that 2015 was a period of preparation, we managed to achieve quite successful results. The Bank almost doubled its activity in regard to attracting new customers, by offering them convenient products. Due to our activity, the assets of the Bank increased by 147%; loan portfolio – by 97%; and deposits – by 150%. At the same time Progress Bank has expanded its service area. We have opened three new service centres in Tbilisi in 2015, and one in Kutaisi. A 24-hour service system has been implemented in our service-centres.

Deposits attracted from abroad are an important source of funding for us. On the one hand that means that we have been able to offer banking products attractive to foreigners. At the same time, we supported inflow of capital to the country and its investment in the local economy.

A significant share (32%) of the total deposit portfolio is owned by foreigners. This directly indicates the reliability and stability of the Bank.

Q. How does your credit portfolio distinguish between the different economic sectors?

A. The corporate segment has been chosen as the main direction of Progress Bank. This is accordingly reflected in the structure of its loan portfolio. If in 2014 the volume of credit for individuals made up 60% of our total portfolio, in 2015 we focused on financing legal entities. Accordingly, the share of legal entities amounted to 75% this year.

Business loans issued by the bank are divided by sector as follows: 52% for trade; 14% – construction; and 10% – service. It should be noted that in 2015, compared with the previous year, the share of loans issued to the service segment has increased significantly.

The Bank’s goal is to significantly increase financing of the production and tourism sectors. We consider these sectors to be core to the development of our country’s economy. Progress Bank is participating in the project initiated by the Ministry of Agriculture, which is aimed at financing the agro sector. We are involved in the programme ‘Produce in Georgia’. We plan to be even more active in this direction in the future.

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Q. How does the rebranding affect your customers?

A. In line with our strategy we changed the logo, corporate colour and slogan. Our new logo is minimalistic. It better describes our approach towards progress and development. As for the colour, red is ambitious, energetic and effective, just like each member of our team. We are setting up banking services with only customer-oriented terms. Accordingly, the new slogan of Progress Bank is: We Created it for You. We have opened service-centres of a new concept, by having introduced a 24-hour service system. The main part of the rebranding of Progress Bank is offering a new style of service to our customers. To achieve this, each member of the Bank works hard and creates innovative services, which will be offered to customers from 2016. Progress Bank is planning a significant increase in its customer base. This means that our improved services will be available not only to existing customers, but also to anyone who may be interested in our innovative banking products.

Q. Which niche of the Georgian banking sector do you plan to target?

A. The corporate segment will be a key priority for Progress Bank in upcoming years. Our aim is to create maximum comfort for the business sector, which does not only include expanding commercial financing. The Bank will focus on supporting the development of business. At the same time we will offer complete and comprehensive banking services to each employee of our client companies. We believe that achieving this is possible only with maximum flexibility, simple-to-understand and user-friendly products.

Q. What was the impact of the GEL’s devaluation on your business?

A. Progress Bank, like a large part of banks, is trying to take into account the current situation in the country caused by the devaluation. Accordingly, we are trying to ease the burden which has been laid upon citizens due to the depreciation. I can tell you proudly that the Bank has not neglected those of its clients who are dealing with this problem. In order to ease the pressure caused by the devaluation, Progress Bank has been changing the credit conditions in favour of its customers. Thereby we have given customers the opportunity to meet their responsibilities.

In general, the GEL’s devaluation has been reflected in the quality of the Bank’s credit portfolio. However, we did not have any material loss due to our effective credit and risk management policy.

Q. Despite economic difficulties the Georgian banking sector ended the year with profit. What are the main advantages of the sector?

A. The high professionalism of employees in the sector and, accordingly, sophisticated management system at banks can be named the biggest advantage of the Georgian banking sector, without any exaggeration. In this regard no other field of the economy can compete with the banking sector. These factors have contributed to the fact that two Georgian banks are quoted on the London Stock Exchange, which is a step forward not only for Georgia but for the whole region.

The existing quite strict, understandable and stable regulation system also contributes to the sustainability of the banking sector.  All these factors have resulted in successfully coping with the serious challenges that existed in previous years.

Q. 78.29% of the Bank is owned by Pintex Group Corp. Tell us more about this group.

A. Pintex Group Corp is a foreign company. Its main activity is trading with financial instruments. The company periodically invests in different countries, such as Switzerland, Australia and the UK. The fact that Pintex Group Corp was interested in the Georgian banking system, undoubtedly proves the attractiveness of the economic and banking sector.

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Q. What are your plans regarding the expansion of branches in 2016?

A. The Bank will be focused on the implementation of innovative remote services in coming years. It will be innovative for our existing and potential clients. Currently, remote services all over the world allow customers to carry out necessary procedures without leaving their homes. In order to receive access to a banking service it is no longer necessary to go to an actual branch and stand in line. Therefore, the human and financial resources of Progress Bank will be directed towards the implementation of future products and innovations. Branches have already been left in the past.

Q. What are your expectations for 2016 in terms of overall economic conditions and the banking sector?

A. The country’s economic situation has most of an impact on the financial sector. Therefore, a stable economic environment is vital for us. The forecast provided by international financial institutions for 2016 are better than currently. It allows for optimism. In addition, the economic policy of the Government is improving and becoming better organized every year. The predictability of the current budget is the highest it’s been in previous years.

Our economy is heavily dependent on the current situation in the region. However, from today’s outlook we do not expect any significant fluctuations that occurred during the previous period. Moreover, we are expecting a significant inflow of FDI which will contribute to further growth of our economy and its sustainable development.

Q. Progress Bank has always been involved in CSR activities. Which is the main direction of your company in this regard?

A. Social responsibility has always been a priority for Progress Bank. There was no exception in 2015. During the current year we have implemented various social projects. The most significant was assistance for the victims of the Tbilisi flooding. The volume of aid amounted to 8.8% of the Bank’s profit at the time. It was the largest volume issued by a commercial bank.

In line with greening Tbilisi we planted 500 cypress plants at the dendrite park area. Our employees as well as their young family members were involved in this activity.

The management of the Bank initiated providing financial assistance to WW2 veterans in Tbilisi and Batumi.

The Bank is involved in the photo campaign – Friends do not Count Chromosomes – initiated by the organization ‘By Our Children’. We provided financial assistance also to the Monk Andrew Foundation. We recently visited the NGO ‘Child, Family, Society’, working with disabled people. It is important that our cooperation with these funds is not one handed. Our CSR activities will continue to carry a systematic face and we will expand them in line with the development of the Bank.

Due to the new approaches of Progress Bank, offering flexible and innovative banking products is a key priority for us. We have an ambition to create progress together with consumers. These products, ideas and this Bank – We Created it for You! Progress Bank truly has been created for you.


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