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Georgia's TBC Bank and the EBRD work together

By Svitlana  Pyrkalo

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Georgia’s TBC bank gets international support

TBC Bank was established from scratch in 1992 with initial capital of US$ 500. The founders, Mamuka Khazaradze and Badri Japaridze, saw in Georgia’s newly independent economy great opportunities for the future.

This is one report from a series

Georgia: investing for change

Today, Mamuka and Badri are Chairman and Deputy Chairman of the bank’s Supervisory Board; TBC is the country’s market leader in retail and SME banking and every third Georgian citizen has a deposit in the bank.
In 2014 TBC achieved another milestone by completing the largest initial public offering by any Georgian company and listing its shares on the London Stock Exchange.
TBC also has a long and successful history of partnering with international financial institutions (IFIs). The bank joined the EBRD’s Trade Facilitation Programme in 1998, launching a long-standing cooperation between the two bodies. Most recently, TBC was a lead arranger of the landmark GEL 50 million EBRD bonds, the first ever Lari issuance by an IFI in Georgia.
Giorgi Shagidze, the bank’s CFO, believes that IFIs have played a crucial role in the Georgian banking sector, not only providing equity and funding through the years, but also helping to improve corporate governance and providing access to best practices.
“We started working with the EBRD in 1998 on trade finance. In 2000 IFC and DEG, the German development agency, were the first IFIs to take equity stake in TBC Bank,” he said.
“The EBRD and the Dutch development bank FMO also became shareholders in 2009. In 2014 we completed our IPO on the London stock exchange – a milestone for us”.
The banking system today is resilient and successful but the EBRD and other IFIs continue to add considerable value, he says.
“Some of our clients still need nurturing before they have access to financing on strictly commercial terms and the EBRD offers special products that provide big value for them,” he said.
“These include dedicated Lari credit lines that help us to disburse loans in local currency to agricultural companies”.
TBC Bank was also one of the banks that benefited from IFI support post-2008.
“The crisis level in Georgia was even more severe than in the West: the global financial crisis was aggravated by the war and local political unrest.  However, the banking system was quite robust before the crisis due to strong fundamental factors and the conservative policies adopted by the National Bank of Georgia and therefore none of the banks failed or needed a bailout from the government.“
TBC’s growth strategy is focused on Georgia itself, Mr Shagidze said.
“Georgia needs more time and more reforms and of course there are lingering challenges like high dollarisation. But we see a lot of room for growth as people make more use of banking services. And we are very well positioned to capture these growth opportunities.”
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