| BOG Receives USD 39 mln OPIC Financing |
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29/12/2008 23:54 (1138 Day 15:33 minutes ago) | |||||
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The FINANCIAL -- According to Civil Georgia, Bank of Georgia , the largest bank in the country, said on December 29, it had received a USD 39 million financing package from the U.S. Overseas Private Investment Corporation (OPIC).
Nika Enukidze, chairman of BOG’s supervisory board, said the package would enhance the bank’s lending capabilities.
The financing is part of OPIC’s USD 176 million project, which the agency announced in October to finance seven projects in Georgia.
As part of this USD 176 million package, OPIC and Georgia’s second largest bank, TBC Bank , signed a memorandum, in October on allocation of USD 40 million to finance long-term mortgages, as well as small and medium sized businesses.
Meanwhile, both BOG and TBC Bank have confirmed that they had to cut jobs because of declined lending related to both banks’ tightened credit standards and less demand from clients.
BOG said that it had cut 830 jobs, mainly in retail services, which reportedly is roughly 20% of the bank’s personnel.
TBC Bank confirmed cutting of 300 jobs - 10% of its workforce; unofficial reports, say that the bank plans more job cuts.
International donors at the Brussels conference in October have pledged a total of USD 850 million to support Georgia’s banking sector. Donors have pledged total of USD 4.5 billion assistance for Georgia following the August war.
“The banking sector has weathered the immediate impact of the conflict, but near-term post-conflict challenges remain,” the needs assessment document, based on which the donors made their pledges, reads.
Key Georgian banks face USD 500 million external obligations falling due in early, 2009.
And the refinancing needs of the banking sector to roll over liabilities and to provide for support for the moderate growth scenario being supported by the standby arrangement, tentatively amounts to about USD 700 million through 2009, according to the document, drafted by the World Bank -led assessment team.
There are total of 22 commercial banks in Georgia with BOG 32.9% of market share in total assets, followed by TBC Bank with 23.7%; Bank Republic-Societe Generale Group – 7.9%; ProCreditBank – 7.4%; VTB and Cartu Bank 5% each; with the rest of the banks having total of about 18% of market share in total assets.
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