The FINANCIAL -- Georgian banks have started launching mortgage loans with renovated terms as they identify this type of product to be in demand on the market. HSBC Bank Georgia is planning to re-launch its mortgage product within the next three months.

“We have identified a demand for this type of product on the market and this is the response to the market’s need,” Maka Gvritishvili, Marketing, Communications and Corporate Sustainability Manager of HSBC Bank Georgia, told The FINANCIAL.

“The minimum amount we will be offering for mortgages will be USD 100,000, the interest rates will still be from 14% to 17%,” Gvritishvili says.

Until changing its strategy and focusing on corporate banking, HSBC Bank Georgia’s Mortgage loan portfolio by June 2009 was about USD 13.5 million.

The maximum amount of a mortgage loan was USD 200,000, maximum term 240 months, interest rates varied from 14% to 17%.

“International trade finance will be the priority for HSBC Bank Georgia next year. HSBC has presence in every country Georgia has trading relationship with. With our international network capabilities and expertise in 86 countries worldwide, we are very competitive on the market and can deliver the best value for customers,” Gvritishvili says.

Bank of Georgia has decreased interest rates on hypothec credits, from 18% to 16%. The Bank has also increased limits from USD 50,000 to USD 150,000.

“Raised limits on mortgage loans will increase demand for hypothec credits. According to our evaluations, demand for mortgage loans is high and thus we will be able to satisfy our customers’ demands,” says Irakli Gilauri, CEO of Bank of Georgia , one of the leading Georgian banks.

Gilauri notes that the monthly limit on hypothec credits will be USD 4.5 million and will be unlikely to increase in the future.

Bank of Georgia issued exactly 4,634 mortgage loans in 2008. The average interest rate for mortgage loans in 2008 was 18%.  The total number of all types of loans in 2008 was GEL 1.9 billion.

“According to the results of June 2009, the total number of issued loans of Bank of Georgia was GEL 1.6 billion. During the first part of 2009, Bank of Georgia gave out GEL 22 million worth of mortgage loans,” Sophio Balavadze, Corporate Communications and PR manager of Bank of Georgia , notes.

The percentage of bad-payers of Bank of Georgia presently is only 4% of the total credit portfolio. “It was previously 7% and as we can see, this number is sharply decreasing,” Balavadze states.

TBC Bank strengthens its activeness on the credit market and decreases the interest rates on several types of loans. According to Bank officials, they as well simplify the process of giving out the loans.

“Taking in account improvement of economic environment, TBC Bank decided to mollify the conditions on loans and offer the consumer the lowest interest rates in Georgia. For the consumers of TBC Bank , Mortgage loans, Auto loans and Consumer loans are now easier to access,” Vakhtand Butskhrikidze, General Director of TBC Bank says. 
 
Average interest rates on mortgage loans in TBC Bank will vary from 14, 9% to19, 9%.  Maximum term will be 10 years and maximum sum – USD 150 000.

Tinatin Nadiradze, PR manager of ProCredit Bank, says that as a full-service bank, Procredit Bank Georgia offers mortgage loans to its business clients as an additional product.

“ProCredit Bank disbursed mortgage loans both in the pre- and post-conflict period. No changes have been made in the disbursement conditions,” Nadiradze says.

For the maximum sum of USD 100,000 interest rates on mortgage loans are 21% - maximum term 10 years.

“Overdue loans constitute less than 3% of our total loan portfolio,” Nadiradze says.

Bank Republic, Societe Generale Group, will provide mortgage loans to those customers that regularly receive payments in their accounts. Interest rates vary from 16% to 19%. The Bank does not state any limits on mortgage loans, the main determiner in this case is a customer’s fiscal ability to cover his responsibility towards the Bank.

Currently the average interest rate for mortgage loans at KOR Standard Bank varies from 18% to 26%. The average interest rate for mortgage loans in 2008 in KOR Standard Bank varied from 16% to 24%. The Bank prefers to keep confidential the total number of mortgage loans issued in 2008 and 2009.

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