Page 39 - bne IntelliNews George country report Sept 2017

Moody’s affirms Georgian TBC Bank at Ba3 following acquisition of smaller lender
profitability and acceptable asset quality metrics. The VRs also consider the banks' large balance-sheet concentrations, high loans dollarisation (on average, 67% of the total) and franchise limitations,” the ratings agency explains. Meanwhile, Halyk Bank's IDR of 'BB-' is driven by the strong support Fitch expects it to receive from its parent company, Kazakh Halyk Bank, which is rated as 'BB' with a stable outlook.
Moody's has affirmed the local- and foreign-currency deposit ratings of Georgia's TBC Bank at Ba3 and B1, respectively with a stable outlook, the ratings agency said on October 27. Moody's justified its action by the fact that the reduction in TBC Bank's capital ratios following the acquisition of Bank Republic on October 20 would be counterbalanced by its enhanced market position. TBC Bank bought full control of Bank Republic on October 18 after agreeing to acquire the remaining 6.36% stake in the country’s fourth largest bank from the EBRD in a GEL22mn (€8.4mn) deal. The acquisition will help TBC Bank become the country’s largest bank by loans and deposits overtaking Bank of Georgia. TBC Bank has been in an expansionary mood after acquiring premium listing on the London Stock Exchange in August.
8.5 Fixed income
8.5.1 Fixed income - bond news
IFC purchases $45mn worth of Bank of Georgia’s inaugural eurobond
The International Finance Corporation (IFC) has invested GEL108.34mn ($45mn) in Bank of Georgia's inaugural eurobond , the multilateral lender announced on June 2.
In late May, Georgia's second largest bank issued a GEL500mn, lari-denominated eurobond, to be listed on the Irish Stock Exchange with a maturity of three years. The IFC's decision to purchase a fifth of the coupons amounts to a vote of confidence in the Georgian currency and economy.
The small country in the South Caucasus has been a regional leader in economic growth over recent years. This has translated into increased interest from foreign investors in sectors like construction, transport, infrastructure and hospitality.
Together with TBC Bank, Bank of Georgia holds two-thirds of the banking sector assets in the country. The two lenders are both listed in London.
The IFC acted as an anchor investment for Bank of Georgia's issuance, offering to purchase up to 30% of the bonds upfront. In total, about 20 international investors purchased the entire offering, the IFC said in a press release.
"This landmark bond has as much a development, as a funding purpose. The successful completion of the issuance has greatly expanded the investor base in lari and, I hope, will deepen local fixed income and currency markets," Kaha Kiknavelidze, the CEO of Bank of Georgia, said
39 GEORGIA Country Report September 2017 www.intellinews.com