The FINANCIAL -- The merger of TBC Bank and Bank Republic comes to an end. The financial talked to Nika Kurdiani, TBC Bank Deputy CEO and Bank Republic CEO on merger update.
What is the current status of the merger between TBC Bank and Bank Republic?
The merger started in October 2016, when TBC Bank acquired Bank Republic. The process will be completed in several days, after which Bank Republic will be rebranded as TBC Bank.
What does this mean for BR customers? What will change for them?
There will not be any principal changes apart from the fact that BR customers will join a larger and more powerful bank, with a broader range of facilities and services. They will have access to everything that TBC Bank offers, including internet and mobile banking services, which have been named the best by a number of international organizations. They will also enjoy a wide choice of credit facilities and a variety of debit and credit cards that have been designed to suit every need. Besides, TBC Bank has a much larger branch and ATM network. BR customers will benefit from breakthrough products such as the Loyalty Program and the Ertguli (Loyal) card, which is transforming bank card culture in the country. In addition, TBC Bank offers Ti Bot, the first Chatbot in Georgia, and interactive software on Facebook Messenger that is programmed to provide banking consultations and call center type services. All these services, which were created by TBC Bank’s considerable human and financial resources, will now be available to BR customers as well.
How does the banking culture differ at the two banks? How will banking be different for BR customers after the merger?
First of all, I should point out that TBC Bank and Bank Republic had a lot in common. Both of them targeted almost the same segments and served the same type of customers. Moreover, our policies frequently converged as some customers were served by both banks.
Therefore, there will not be significant post-merger cultural changes. While some banks differ materially in terms of operational culture and specifics, TBC Bank and Bank Republic had similar operating models. However, TBC Bank has always given a high priority to service quality, not only in its branches but across all of its channels and products – at all points where customers’ interests are concerned. BR customers will soon experience this as well. We are sure that their first emotion after the merger will be delight in the high quality service.
What was Bank Republic’s strongest area in the banking sector?
Bank Republic’s strongest position was in retail banking, especially in recent years. In 2016, the loan portfolio exceeded GEL 1 billion. Bank Republic was also successful in mortgage loans, and that trend will continue after the merger.
It is interesting to note that, following the merger, Bank Republic grew in size. Why is that?
Normally, when two financial institutions merge, one of them suffers credit portfolio loss, as the merger itself is associated with a number of technical challenges, and that translates into losses. On the other hand, the acquiring company finds it difficult to align the integration processes with its immediate goals and, as a result, a small part of its portfolio is lost. In our case, TBC Bank firmly took the reins of all key areas. We assumed the management of all focal directions from the very start, which enabled us not only to maintain but to expand the BR portfolio. As mentioned, it exceeded 1 billion GEL and we are proud of that. This is our second merger, the first being Bank Constanta, and we are happy that the process has been successful and painless.
How long will the adaptation period be for the two banks?
As you know, the merger technically comes to an end on May 6. The staff, the clientele and the banking processes have already been integrated and streamlined. However, considerable work and attention is still necessary to ensure the process is properly managed. Thus, we will have to work particularly hard in the first six months to one year following the legal and technical merger.
How many new clients did TBC Bank acquire?
After the merger with Bank Republic, we have around 2 million individual customers – the biggest index on the Georgian market. Naturally, this means expansion and a new stage for our bank.
What are the plans after the merger? How will the market develop and how will TBC Bank’s strategy change?
As you know, TBC Bank has been ranked the second largest bank in Georgia for about 10 years. In the last five years, it has aggressively expanded its market share through organic as well as inorganic growth, i.e. the mergers. We first acquired Bank Constanta, then Bank Republic and also bought other banks’ portfolios, all of which have contributed to our advancement in the market. Being the first means being the largest among commercial banks. We have over 40% of the retail market in our portfolio. In fact, our successful expansion in the retail market represents a great challenge, as we do not compete to be the biggest; we compete to make our customers the happiest and to do business with them. We aim to expand our business by attracting and taking care of a growing number of customers. Leading companies never rest; we intend to take advantage of our position to develop and to focus on issues that make us unique, not only in Georgia but in the Caucasus.
In which direction do you plan to expand, banking or financial services?
A financial group is not limited to banking but also covers a wide range of financial services: brokerage, leasing, insurance and so on. We also target these directions. TBC Leasing is the biggest leasing company in Georgia; TBC Broker is our subsidiary. You may also remember that last year we acquired the Kopenbur insurance company and created TBC Insurance on its basis. We believe it is strategically important to develop business insurance and gain a remarkable market share in this sector. On the whole, we plan to maintain a dominant position in financial services in the future.
What are the three main massages that you would like to give Bank Republic clients?
Thank you for this question. We want Bank Republic clients to feel that TBC Bank is proud to continue to develop together with a bank of such a quality and scale as Bank Republic and we will do our best to provide the highest quality of service possible to our clients. We are constantly trying to deliver the best customer service as well as a wide range of innovative and modern products and services to our clients. I want to thank both TBC Bank and Bank Republic clients for being with us.