The FINANCIAL — TBC bank expects to attract USD 250 million investments in the next 6 months. Currently TBC Bank’s assets are equal to GEL 2 billion. In 2008 TBC’s assets increased by 15%, – GEL 230 million. The entire deposit portfolio increased by 5%, which was GEL 34 million. The credit portfolio had a 30% increase. The net income before reserving rose by 46%.
The forecasts of NBG are becoming more and more pessimistic. According to the National Bank of Georgia (NBG), the disinflation will continue in the first half of 2009. This will be due to the world financial crisis which will also prevail.
“Taking into account the current situation we are trying to maximally save costs and raise the effectiveness of our operations. For this reason our staff had to undergo a serious reorganization. As a result of this process, we reduced the number of our employees by 300 (10%). In July there were 3,000 staff members exactly and now there are 2,700. However we are keeping these people in our database and they will get back to work as soon as the situation improves,” says Vakhtang Butskhrikidze, General Director of TBC Bank.
“Our main priorities for 2009 will be improving the service quality as much as we can and attracting investments from foreign resources. In 2009 TBC is going to increase assets by 10%. As for the deposit portfolio, it will increase by GEL 100 million (10,5). The net income of the bank is forecasted to be GEL 40 million.”
This year the bank opened 23 new branches, 3 new service centres and installed 80 new ATM machines throughout Georgia. The company launched 10 news products in the banking sector.
“From November TBC has been giving out loans mainly in USD. This tendency will be prevalent in the coming months too. The next 6 months are going to be really difficult for our economy in general,” General Director of TBC Bank told The FINANCIAL.
“Up to this date all of the financial highlights of the bank have increased in comparison with the beginning of the year. We managed to recover from the dead end situation which was provoked by the war in August. Our plans for 2009 are ambitious. In the next 6 months we are going to attract additional investments of USD 250 million.”
In 2008 TBC brought investments equal to USD 206 million. USD 100 million from Merrill Lynch, USD 44 million from OPIC through CITI Bank, USD 16,5 million from RoseMount, USD 15 million from FMO Mortgage, USD 10 million from DEG, USD 10 million from OTP, USD 7,5 million from EBRD and USD 3 million from Banco International.
Most recently the bank started the Golden Deposit. There are already GEL 1 million Golden deposits. Golden Deposit is a term deposit which is secured with gold. In order to receive maximum profit and ensure additional security of the deposit, TBC Bank will strengthen the deposit with gold purchased at the New York Mercantile Exchange (NYMEX). That means that along with additional security guarantees, the owner of a Golden Deposit will be able to receive interests accrued in accordance with the price of gold. Interests will be accrued in accordance with changes in the price of gold. This makes up to 16% in case of increase and a guaranteed annual 9% if the price of gold decreases.
TBC’s raffle for depositors “Become a millionaire with TBC Bank” showed its efforts. From February 16 to December 16, the deposit market share of TBC increased from 28,4% to 29,3%. During this raffle up to 40 thousand new deposits were made. The total amount making GEL 548 million.
TBC has to cover USD 100 million in the first half of 2009. This will be a repayment for resources brought from different International Financial Institutions.
In 2008, the total budget for charity projects of TBC Bank made more than GEL 1 million (excluding the amount – 5 million – allocated for the victims of August’s war).
In terms of priorities, this budget (GEL 1 million) was distributed in the following way:
• Restoration of historic monuments and monasteries – 28%
• Social programmes and one-off assistance – 16%
• Funding of sport and culture spheres – 41%
• Funding of young people lacking financial subsistence – 15%
“In August our deposit portfolio decreased by 11%. This figure was 13% for other banks on the market, so TBC’s tendency was more positive. As you know because of the war the amount of deposits decreased considerably. From September, thanks to our efforts, people started bringing back their money and today’s amount is nearly equal to what it was on 31 July,” continued Vakhtang Butskhrikidze.
In August TBC stopped giving out loans. In September-October loans were submitted in a restricted manner. Despite this the credit portfolio increased by GEL 126 million.
“Our strategy for coping with the crisis situation entailed restricting consumer, business and mortgage loans. TBC tried to take into account every aspect of dealing with client’s problems and restructured loans for those clients whose business was of vital importance. We made a detailed credit analysis of risks with our international partner organizations. As a result of this, the amount of reserves was increased and now we can cover 220% of all potentially problematic loans. We reserved GEL 163 million, which will guarantee the compensation of losses, if there will be any.”
Written By Levan Lomtadze