The FINANCIAL — “Street rallies cause uncertainty. Industries never like them. But the affect of the events on the banking sector today have been minimal,” Timothy Krause, Senior Manager, Financial Markets of International Finance Corporation said during a meeting with media representatives organized in TBC Bank’s office.
Mamuka Khazaradze, Founder and Supervisory Board Chairman of TBC Bank, hosted representatives of IFC, EBRD and FMO, minor shareholders of the Bank, last week.
“Strong management and the partners trust factor,” with these words Mamuka Khazaradze explains the success of TBC Bank.
“Trust of our foreign partners towards our bank is the result of successful cooperation over the last few years. We’ve been cooperating with the above mentioned international organizations for decades. They know us well in person and as an organization. Any success of the business is gaining trust. Making even one mistake in business can be fatal,” Mr. Khazaradze told The FINANCIAL.
“During my activities in Georgian business over the last 18 years I and my team have managed to avoid mistakes. We tried to follow the rules of partnership with investors and partners. This is the main reason of achieving support from our foreign partners during these hard times,” Mr. Khazaradze notes.
Mr. Khazaradze remembers an example of GGMW. “In 1998, during the economical crisis in Russia the company was facing some difficulties. Even at that time international financial institutions supported us a lot. Currently as we all see Borjomi is one of the most successful companies in the country. The same was the case of TBC Bank and I think that these processes will continue in the future.”
Timothy Krause, Senior Manager, Financial Markets of IFC talked about the effect of the demonstrations on the economy. “Street rallies cause uncertainty. Industries never like it. On the other hand the effect of the events on the banking sector has been minimal today. We are optimistic and I think that the critical situation will soon get stable in Georgia. Of course there will be changes, they are happening in every country and actually changes are good. We are happy to be making investments in TBC Bank despite the fact that street demonstrations have been occurring,” Timothy Krause said.
Mr. Krause underlines two main advantages that still help Georgia to attract foreign partners. “Georgia suffered the crisis first because of its war in August. As the war adjusted the economy devalued and we saw that the economy had taken the heat first. That’s one benefit. The second is that Georgia is not a huge country and it does not depend on a huge amount of trade like other countries, like Taiwan or Japan for example, and so it was less affected by the semi national crisis. I am hopeful that Georgia has seen the worst of things by now. We expect a slow but steady continuation of economical growth and that’s why we decided to invest in TBC Bank.”
“In comparison with other countries we find Georgia more isolated. It does not mean that Georgia was not affected by the world global crisis. It was affected like many other countries. But some other countries, which were heavily integrated with the international financial system, suffered more. As an example of this we can name Ukraine. I am sure that the Georgian banking system will overcome these problems sooner than others,” says Paul-Henri Forestier, Director of Caucasus, Moldova & Belarus regions, EBRD.
Recently IFC, EBRD and FMO supported Georgia’s banking sector by investing up to USD 161 million in TBC Bank to help the Bank expand access to finance for local companies.
TBC Bank has demonstrated resilience, maintained stable operations, and provided reliable client service during the financial crisis. As a result, it provides a sound platform for new investment and future growth. The financial package includes equity, subordinated debt, and senior loans, which will help strengthen TBC’s capital base and provide additional liquidity to support the Bank’s on-lending operations to local small and medium enterprises. IFC and EBRD will provide USD 70 million each for a total of USD 140 million and FMO will invest USD 21 million.
Nick Tesseyman, EBRD Business Group Director Financial Institutions, said the package was “an example of how international financial institutions are joining forces to strengthen a bank of systemic importance for the benefit of Georgia’s economy. We are encouraged by the swiftness and decisiveness of the response and see this as an important contribution to support the Georgian economy, which has been badly hit by the current global crisis,” Cbonds quoted Tesseyman.
“As a leading bank in the country TBC Bank’s influence on the Georgian economy is critical. We see the financial package provided to us by our international partners as a confirmation of their strong commitment to our bank and Georgia’s financial sector in general. We highly value the relationship we have developed with these multilateral institutions over the years and regard their investment as a boost which will allow TBC to continue and deepen its activities for the benefit of Georgia’s real economy,” Badri Japaridze, Deputy Chairman of the Supervisory Board of TBC, said.
In March 2009 it was announced that BNP Paribas will extend a credit line of USD 30 million to TBC Bank. The loan agreement was signed in Tbilisi. This is the French bank’s first investment in the Georgian market.
Written By Madona Gasanova
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