| Bank of Georgia Changes Strategies in Belorussia and Ukraine |
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19/10/2009 11:05 (32 Day 23:48 minutes ago) | |||||
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The FINANCIAL -- Bank of Georgia has changed its strategy in Belorussia and Ukraine . On the Belorussian market the Bank will focus on financing small and middle-sized businesses. In Ukraine , the niche the Bank will be financing is those customers involved in trading between the two countries.
“The Belorussian banking sector is huge. It is 5.5 times larger than the Georgian banking sector but most of them are financing large scale businesses. The average sum of their credits is millions. They are not financing customers in amounts of 150-200,000. Interest rates on business loans range to over 20%. We will focus on financing middle and small sized businesses and occupying this niche,” Irakli Gilauri, CEO of Bank of Georgia , says.
“In Belorussia, most of the banks are the property of the Government. Accordingly, the model of their service, design of branches and products are similar to Soviet models. Bank of Georgia is establishing its high-level service on the Belorussian market,” Gilauri declares.
The Bank plans to focus on customers with mid-level incomes on the Belorussian market. “Our banking system in Ukraine and Belorussia is derived from the Georgian model. Occupying mass retail banking in Belorussia will need a large number of investments. In this case, we will need to have about 200 branches. Accordingly, with our 20 branches already existing in Belorussia we will manage to occupy our own exclusive niche of the Belorussian market,” Gilauri reveals.
Gilauri confirms that Byelorussians will need to pay a minimal commission sum to become customers of Bank of Georgia .
On the Ukrainian market, the Bank does not plan to develop retail banking. The number of branches has been reduced from 44 to 18. “In Ukraine , we will serve customers that are running trading business between Georgia and Ukraine . The sum of trading between Ukraine and Georgia was about USD 1 billion in 2009. We want to switch to financing this line of trading between the two countries,” Gilauri says.
“One of our customers was buying wheat in Ukraine and needed to pay for products as soon as he received the goods, but after providing him with our service he became able to postpone payments by 90 days. With this step we attracted the Georgian customer as well as the Ukrainian company which was supplying our client with wheat. We have numerous similar examples and think that the policy will be beneficial for us and useful for customers in the long run. Bank of Georgia is importing money from Ukraine to Georgia. We had a similar example in Israel,” Gilauri declares.
In 2010, Bank of Georgia expects capital increase and to makes changes in its management team. “We want to meet the new challenges prepared,” Gilauri says.
The soon-to-be ex-assistant of the Director General of Bank of Georgia will be replaced by Archil Gachechiladze. Gachechiladze worked at TBC Bank from August 2008. “At TBC Bank my position was restructuring loans and I had reached a logical end to that post. Bank of Georgia is offering interesting work and a good team that I am glad I am soon to be a member of,” Gachechiladze told The FINANCIAL.
“Concrete figures of how many prc we expect increase of banks assets to be will become clear in a month’s time. We plan to increase assets with the help of better service,” Gachechiladze declares.
Former assistant of General Director of Bank of Georgia , Ramaz Kukuladze, will take up the position of first assistant at United Telecom of Georgia (UTG).
The Bank has launched a new position of assistant of General Director in the field of international banking. Nikoloz Shurgaia, former General Director of VTB Bank, occupies the new position. Shurgaia will run the operations of international banking and hold a position on the Board of Directors of the Belorussian bank.
Gilauri declares that Bank of Georgia is a leading bank not only in assets, market share and number of customers but also in the direction of attracting existing talents on the market. “Therefore if we see capable workers at our competitor banks, we logically try to entice them to come work with us,” he says.
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