Page 32 - GEORptJul18

Economic and Financial Affairs Masoud Karbasian in a meeting with Georgian business officials in Tbilisi. It was part of a wider business trip arranged by the Iran-Georgia Friendship Group, a business lobby aimed at facilitating trade between the two near neighbours.
The Georgian side reportedly welcomed the proposal. But the recent banking difficulties experienced by Iranians in Georgia may indicate that a spanner is going to get firmly lodged in the wheels of any potential deal.
Reports have previously stated that Iran was on the way to connecting its banking system with those of other countries including Russia, Azerbaijan, Oman and Qatar, but delays and supposed "technology issues" have hampered any further development of banking integration with those neighbours.
In the case of Russia, it was first announced that the connection would be achieved by January this year. Then it was suggested that it would occur by the time of the June start of the Russia 2018 World Cup. But Iranian football fans who have journeyed to Russia for the tournament have told media outlets that their bank cards fail to work in the country’s ATMs.
According to several Iranian residents of Georgia, all Iranians in the country, bar those working for foreign media, are only permitted to open Georgian lari accounts. Also, the account holders are not permitted to conduct international banking transactions in other foreign currencies as that might breach US Treasury banking regulations and sanctions.
8.1.6 Bank news
TBC Bank and BSTDB sign GEL120mn loan agreement
Net profit at TBC Bank flat year on year in first quarter
Demerged Bank of Georgia’s FTSE 250 launch coincides with sell-off on Italy woes
TBC Bank, Georgia’s largest lender, on June 20 announced that its subsidiary JSC TBC Bank ("TBC Bank") and the Black Sea Trade and Development Bank (BSTDB) have signed an agreement in the amount of GEL 120 million. The 3 year local currency SME Loan facility will enable TBC Bank to finance small and medium-sized enterprises in Georgia. BSTDB has obtained the local currency funds through a public placement of GEL-denominated bonds arranged by TBC Capital, a subsidiary of TBC Bank. This is the second local currency SME facility that BSTDB has extended to TBC Bank since 2015, bringing the total amount to the equivalent of USD 70 million. The bonds have been listed on the Georgian Stock Exchange and are the largest public IFI bond placement completed this year.
TBC posted a 1Q net profit of Georgian lari (GEL) 97.5mn, compared to GEL96.6mn a year ago and GEL96.8mn in 4Q 2017. TBC overtook Bank of Georgia in 2016 as the number one Georgian lender by acquiring the fourth largest bank in the country at the time, Bank Republic, from France's SocGen and the European Bank for Reconstruction and Development (EBRD).
The demerged Bank of Georgia Group and Georgia Capital may have wished for a better debut day on the FTSE 250. Mounting worries among London Stock Exchange investors over the threat Italy’s political unrest poses to the eurozone meant a winning start was beyond reach. Bank of Georgia Group (LN:BGEO) saw its share price fall 40.13% to GBP18.64 on May 29, while on May 30 it lost another 2.35% to GBP18.20 by 11:45 London time. Georgia Capital (LN: CGEO) started trading on May 29 at GBP11.00 and
32 GEORGIA Country Report July 2018 www.intellinews.com