| Georgian Banks Wakening |
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24/08/2009 11:55 (901 Day 02:31 minutes ago) | |||||
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The FINANCIAL -- Georgian banking sector, the key industry of tiny country on Black Sea is wakening.
From September 2009 almost all local banks plan to offer new products to their customers, the process that could be the main sign of overcoming crisis conditioned by August war with Russia and global downturn.
“From September 2009 KOR Standard Bank plans to offer new products to its customers. We will launch new credit cards: Next, Royal – Royal Deposit and Platinum card. We also plan to base the loyalty program, which has no analogue in Georgia. The details will be released after their presentation,” Gvantsa Gusharashvili, PR and Media Specialist, told The FINANCIAL.
KOR Bank formally took over Standard Bank on March 17, 2008. KOR Bank is backed by the strength of Dhabi Group - one of the largest international UAE based investment groups actively participating in various investment activities in countries of the Middle East, CIS States, Pakistan, Bangladesh, Iran, Afghanistan, Uganda, and the Republic of Congo. The market value of the Consortium portfolio can easily be stated to be in excess of USD 10 billion.
Kor Standard Bank will start its new business season with new CEO. In July there was a change inside the management team of KOR Standard Bank . Imran Khizar Hayat, General Director of KOR Standard Bank was replaced by George Glonti, former CEO of the People's Bank.
“The whole team of KOR Standard Bank currently consists of Georgians. Our Arabian managers decided that Georgians would be closer to the local market,” Gusharashvili comments.
“The terms on credits fluctuate from 27 to 36 months. According to the results of 2007 the total sum of business, mortgage and consumer loans issued by KOR Standard Bank is GEL 7.6 million. In 2008 the total amount of loans was GEL 8.7 million. In January-July 2009, bank issued GEL 1.12 million for financing business, hypothec and consumer loans”.
From September 2009 Bank of Georgia , one of the leading Georgia banks, plans to enhance financing small and middle-sized business as well as corporate customers.
“We have increased the limit for micro financing from GEL 5 million to GEL 12.5. Amount of micro credit is from USD 500 to USD 150 000,” Sophio Balavadze, Corporate Communications and PR Manager of Bank of Georgia , notes.
In July 2009 Bank of Georgia received credit line of USD 20 million from EBRD.
“The new credit line will be focused on financing corporate customers. They will have opportunity to receive credits for capital investment and financing turnover of their capital,” Balavadze says.
According to the results of first quarter of 2009, the portfolio of corporate loans of Bank of Georgia was GEL 860 million. As for retail banking, the amount of credits reached GEL 974 million.
Balavadze reports that Bank of Georgia has not changed its interest rates on credits after the beginning of global recession. “In the terms of micro financing, we have reduced our interest rates and currently it is 20%. That is one of the lowest one on the market”.
From September Bank of Georgia will reduce interest rates on deposits. “The fact is that the supply is higher than the demand. We do not know yet in how many percents it will be reduced. It will be regulated by market,” Balavadze explains.
“Bank Republic is intensively working on creating new products,” Tamar Shavdia, Head of PR and Communication Department of Bank Republic, SocGen Group, says.
Shavdia says that “Bank Republic will offer innovating products adapted to the interests and the demands of Georgian customers”.
Bank Republic that is backed by the financial giant Societe Generale Group does not limit the sum of credits.
Bank Republic says it will not reduce interest rates on deposits.
“All the changes in banking system are caused by the total market demands. After the beginning of global recession interest rates raised on every banking product. Bank Republic tries to maintain the policy of customers oriented bank and accordingly, we are not planning to over view the interest rates on deposits,” Shavdia comments.
Shavdia thinks that offering high interest rates on deposits will not help banks to attract customers of their competing banks.
“According to the financial results it became clear that widening of market share is not possible with the manipulation of interest rates. For attracting depositors, basic condition is the image, experience, stability and other advantages of the bank. All above mentioned criteria was number one advantage for Bank Republic,” She says.
From September banks expect increase of the demand towards Student loans. Bank of Georgia continues giving out student loans with old terms. Financial sources for student loans are not limited by us, Bank of Georgia told The FINANCIAL.
As for KOR Standard Bank and Bank Republic, currently the launching of student loans is interrupted as banks are “over-viewing the conditions”.
“We have not restored giving out student loans. That issue is now reconsidering,” Gusharashvili, KOR Standard Bank says.
“Currently there is no big demand on student loans”, Balavadze, Bank of Georgia says.
“It will rise from September. In 2009 we have already given out student loans in amount of more than GEL 900 000,” Balavadze, Bank of Georgia says.
Bank of Georgia offers different types of student loans that are counted for students, studying in Georgia and abroad. Loan amount, for the students who wants to get higher education in Georgia, conforms to the cost of studies. Maximum period of loan is 7 years. Grace period is during period of studies. Limitation according to educational programs is MBA or BBA over the 3rd year.
Loan amount for student, those willing to continue studies abroad in accordance with the period of studies, are maximum USD 10,000 for 1year program and maximum USD 15,000 for 2 year programs.
Grace period, in accordance with the period of studies, is period of studies +3 months; including the principal amount of the loan as well as interest accrued during the same period. Loan period is maximum 5 years after expiration of grace period. Minimum interest rate is established for consumer loans at the moment of beginning of payment. There is a limitation according to educational institutions, only educational institutions, included in Top 100 MBA list of the Financial Times. Limitation is also according to educational programs: MBA, PhD (economy, finances, justice).
“We did not have any changes towards the conditions of student’s loans. Bank was actively giving out student loans even after August war. Bank was launching student loans after September 8. About September 17, 2008, 75 students were supplied with our credits,” Balavadze says.
From August 2008 till the end of year, the total sum of given out student loans by Bank of Georgia was GEL 2.4 million.
From September TBC Bank , one of the leading commercial banks in Georgia will offer student loans to Georgian citizens, who need to fund their tuition costs for Bachelor’s Programs in Georgia;
TBC Bank Student loan terms are following:
On 19 May, 2005 at the Ministerial Meeting in Bergen Georgia officially joined the Bologna Process and committed itself to becoming a constituent part of the European Higher Education Area by 2010. In 2006 student loan system was introduced in Georgia in cooperation with the leading private Banks of Georgia (TBC Bank, Bank Republic, BasisBank and the Bank of Georgia ).
Written By Madona Gasanova
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