Page 31 - GEORptSep18

Bank of Georgia Group posts 11.2% y/y gain in first-half profit on stronger economic growth
TBC Bank signs $50mn loan agreement with China’s CDB
Market share in total loans was 38.3%, up by 0.3pp y/y.
In terms of individual loans, TBC Bank had a market share of 39.8%, down by 1.0pp y/y. The market share for legal entity loans was 36.5%, up by 1.6pp y/y. Market share of total deposits reached 39.5%, down by 0.3pp y/y. Market share of individual deposits attained 41.2% up by 1.0pp y/y. In terms of legal entity deposits, TBC Bank holds a market share of 37.5%, down by 1.9pp y/y.
Bank of Georgia Group on August 16 recorded an 11.2% y/y improvement in first-half profit. It said profit rose to 257.8mn laris ($100.9mn) from 231.8mn laris a year earlier. Higher lending against a backdrop of stronger economic growth in Georgia helped it to the gain.
Pre-tax profit for Bank of Georgia’s banking division climbed 27.8% to 231.2mn laris in the first half. First-half revenue rose 17.8% to 489.3mn laris, while the net interest margin fell to 7% from 7.3% year on year. Retail Banking saw a 29.5% rise in the net loan book to 5.38bn laris as of June 30.
The Georgian government’s ongoing reform plan to lift growth and the central bank’s monetary policy would continue to strengthen the economy, Bank of Georgia said. The former Soviet republic has been recovering from a decline in exports and currency plunges that have impacted the economies of its main trading partners. Oil and gas export pipelines from other countries run across its territory.
“Business confidence remains strong, exports continue to grow rapidly and tourist inflows were at unparalleled levels during the first half,” said bank CEO Kaha Kiknavelidze.
Bank of Georgia has more than a third of the market share of Georgian banks based on total assets, loans, deposits and shareholder equity. It offers retail, corporate and investment banking, and wealth management.
The lender was formed when BGEO Group demerged into two entities in May.
TBC Bank Group PLC’s subsidiary JSC TBC Bank has signed a $50mn loan agreement with the China Development Bank (CDB), the Georgian banking group a nnounced on August 13. The deal is the first signed between the two banks, and the largest facility CDB has ever provided to any Georgian entity. It was extended amid an upturn in trade between the two countries, following the signing of a free trade agreement last year.
TBC said the funds are intended for “general corporate purposes” and will help the bank expand its financing operations for Georgian clients primarily in the small and medium sized enterprise (SME) and micro segments. This will include clients who directly benefit from Georgia’s increasing trade with China. Currently, China is Georgia’s third largest trading partner, trade between the two countries having been boosted by the free trade agreement signed in 2017. “[The] economic relationship between the two countries has increased significantly over the past five years with exports to China increasing eight times and its share in total exports reaching c. 8% in 2017,” wrote TBC.
"Our partnership with CDB is a logical response to the recent positive economic developments between our countries. The transaction reflects both institutions' commitment to launch a successful cooperation and we look forward to many years of productive partnership," commented Vakhtang Butskhrikidze, CEO of TBC Bank, in a statement.
State-owned China Development Bank (CDB) was established in 1994, and is now is the largest Chinese bank for foreign investment and financing cooperation.
31 GEORGIA Country Report September 2018 www.intellinews.com