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26 I Cover story bne May 2017
EURASIA
economic growth as well as the develop- ment of the capital markets, and how education is a key part of the equation.
“In the last 18 months we hired seven Georgian professionals who gathered expertise and know-how in leading institutions abroad,” he maintains.
“We have a lot of intellectual assets outside Georgia, if you show them that they can grow professionally here, they will return back and shape the country’s development.”
Still chairman of the academy’s board
of trustees, Khazaradze has employed many of these former students. Together with other business partners, notably TBC co-founder Badri Japaridze, who has been with him in most investments, Khazaradze owns a range of companies but he has kept his non-financial busi- ness interests separate from TBC Bank.
From the USSR to the LSE
In 1992 the Soviet Union had col- lapsed and Georgia was in bloody chaos – quite literally, racked as it was in civil wars with the two separatist
“It was challenging,” he smiles in understatement. “Badri and I gathered the $500 needed for the registration and joined a list of 300 banks in a country which was in a total mess,” he recalls. “But it was also a greenfield, so many opportunities.”
The founders still own a 22% stake in TBC, which is today the country’s lead- ing bank, accounting for 32.1% of total assets, 31.1% of lending and 33% of deposits as of December 2016.
These figures to do not include Bank Republic, Societe Generale’s local unit and Georgia’s fourth largest bank, which TBC acquired in October 2016 for GEL315mn (€121mn). The acquisition, the largest in the country’s banking his- tory, came after TBC secured a premium listing status on the London bourse.
About a third of the population remains unbanked, hence there is a lot of poten- tial for local expansion, maintains Khaz- aradze, who states that the future lies in mobile banking. Looking forward, he does not rule out regional expansion.
Mamuka Khazaradze Georgia (2)
Mamuka Khazaradze, the Georgian entrepreneur, has
a diverse array of business interests ranging from wine production to port infrastructure development,
and he pioneered his native Georgia’s banking sector, setting up TBC Bank, the country’s leading lender with $4bn in assets. But for the tycoon it is education that offers the best return on investment and his heart lies in a modern building surrounded by trees by Lisi Lake, on
the outskirts of the capital Tbilisi: the American Academy.
“When Guivy Zaldastanishvili,
a Georgian businessman who lived for many years in the US, and I thought about an innovative high school in the 1990s, many took us for mad,” recalls Khazaradze in an interview in the three- domed historical building that houses TBC Bank’s headquarters. “We proved them wrong. Since the opening in 2000, our 580 students have gradu- ated from top US universities, mostly Ivy League, collecting over $68mn in scholarships. This is my biggest success story, because there I see the future of my country as these students come back and contribute to its development.”
An avid supporter of his country’s traditions, Khazaradze is bullish on its
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“I barely had the cash to pay the train ticket back, but I learnt a lot”
regions of Abkhazia and South Osse- tia – suffocated by hyperinflation, and paralysed by corruption. As bread lines were a common sight, starting
a bank did not seem a great idea, let alone an art gallery, but Khazaradze, then in his mid-twenties, did both.
The art gallery was not exactly a hit. “I made no money, I went all the way up to St Petersburg to sell the paintings and barely had the cash to pay the train ticket back, but I learnt a lot.”
He then began a retail business, and founded a bank for financing, the Tbilisi Business Centre Bank, aka TBC, of which he remains chairman.
“It is not part of our immediate plans, but should the right opportunity arise, we will certainly consider it,” he says
The first million
Asked the classic question about how he got his first million, Khazaradze, now 50, bursts into a laugh. “It was in rubles,”
he says, reaching out for a calculator. “About 17,000 today. Still some money when you are in your twenties.”
It did not come from selling artwork, rather beer cans, and the story could easily feature in a comedy book.
“A businessman had imported 8mn beer cans from the US to Georgia via