TBC Bank: Award-winning Provider of Trade Finance Services

TBC Bank: Award-winning Provider of Trade Finance Services

The FINANCIAL -- TBC Bank was awarded the title of Best Trade Finance Bank in Georgia in 2015 by Global Finance Magazine. This was the first such award for the Bank.

According to the publication, criteria for selection included transaction volume, scope of global coverage and customer service. Winning banks were named in 7 regions, 84 countries and globally.

The editors of Global Finance selected the best trade finance providers based on input from industry analysts, corporate executives and technology experts.

Facilitating international trade in Georgia

According to Nana Khurodze, the head of Trade Finance and Documentary Operations Unit of TBC Bank, by providing trade finance products the bank supports its customers in developing export and import operations. “Very often companies are unfamiliar with each other and hesitate to start trade relations. Sometimes they can not even choose an appropriate payment term for supplied goods or services. Bank's involvement is therefore required to minimize economic and country risks to a certain level, also helping contractors in finding best solutions. On the one hand, bank guarantees ensure that the sellers are paid and on the other hand, guarantees help protect buyers from the  non-delivery of promised goods or services. Therefore, we support companies to build up international trade relations through minimizing risks, Khurodze explained. According to her, TBC Bank is also involved in the development of local trade relations.   

TBC Bank and EBRD’s Trade Finance Facilitation Program

TBC was one of the first banks in Georgia to join the EBRD’s newly launched Trade Facilitation Program (TFP) in 1999. This key partnership has allowed TBC Bank to provide financing for import and export operations in Georgia, a crucial condition for enabling economic growth in developing countries. Participation in the TFP has contributed to TBC Bank’s accent to its leading position in the current trade finance market. By the end of 2014, TBC Bank had a total portfolio of GEL 422 million, which is approximately a third of the estimated GEL 1-1.5 billion trade finance market in Georgia. The Bank partners with all IFI and major commercial trade finance providers in the region, of which EBRD’s TFP is one of the largest providers.

EBRD provides TBC Bank with credit limit through its TFP program. In addition, the support and knowledge TBC Bank has gained from the EBRD has helped it to establish effective business relationships with commercial partners throughout the world. Today TBC Bank has more than USD 210 million in total committed clean lines, with higher limits set based on transaction requirements.

The EBRD’s Trade Facilitation Program (TFP) was developed to promote and facilitate international trade to, from and within Central and Eastern Europe, the Commonwealth of Independent States and the southern and eastern Mediterranean region. The program currently unites over 100 issuing banks in 26 countries and more than 800 confirming banks. Under the TFP, the EBRD provides guarantees to international commercial banks covering the political and commercial payment risk of transactions undertaken by participating banks (issuing banks) in the EBRD’s countries of operations.

According to EBRD, since its launch in 1999, the TFP has facilitated EUR 11 billion worth of trade worldwide through over 17,000 transactions. For the issuing banks in the region that participate in the program, the total limit exceeds EUR 1 billion – a number that demonstrates the outstanding success of the TFP, which has largely contributed to the helping emerging economies like Georgia realize their trade potential and achieve growth.

“Last year was an especially important year regarding the development of trade finance service within the Bank itself, as well as raising awareness among customers. I think this is very important because companies are not entirely familiar with these products and what advantages these products can have for their business. We are trying our best to target consumers, who are involved in export and import transactions and require financial support from the Bank to provide trade financing products, and inform them about these advantages”, Khurodze said.

She added that utilizing TFPs is less expensive than taking out a loan, which means the program not only helps limit risks, but also can assist businesses by saving money.

In 2013, TBC Bank was named Most Active Issuing Bank in Georgia within the EBRD TFP – an honor the Bank first received in 2009.
TBC Bank hosted EBRD’s International Trade Finance Conference in June 2014, the first time the event was held in the Caucasus. The event was part of the important role the TFP plays as a facilitator of the exchange of knowledge between leading trade finance banks and TFP participants.

In addition to the recognition from the EBRD and Global Finance Magazine, TBC has received awards from other trade partners and industry experts.

Leading Partner Bank in Georgia

For the first time in Georgia, Asian Development Bank (ADB) named TBC Bank  as a Leading Partner Bank in Georgia ADB’s Trade Finance Program, which fills the gap in the market for trade finance by providing guarantees and loans to banks to support trade. Winners are nominated according to the number of transactions supported by TFP during 2014. The objective of the initiative is to recognize TFP’s most active partner banks and raise awareness of the benefits of TFP membership for local banks in developing Asia.

TBC Bank recognized for one of top 15 deals in the world

The Trade and Forfaiting Review (TFR), a leading trade and supply chain finance information publication, named a TBC Bank transaction as one of world’s top 15 deals in 2014. TBC Bank was in good company: other winners included transactions by HSBC, RBS, Deutsche Bank, IFC, Citi, ING, Société Générale, ABN AMRO, and BNP Paribas.

Judges considered the structure, external environment, strategy and context of eligible transactions when selecting the winner. The top 15 deals were chosen out of 180 applications and 145 core transactions worldwide.

For TBC Bank, the winning transaction was a Letter of Credit issued for the import of the artificial snowmaking equipment, which enabled Georgian Mountain Resorts Development Company to make skiing at two popular Georgian ski resorts, Gudauri and Bakuriani, possible regardless of the volume of snow fall.

“The export company demanded a bank guarantee before shipping the artificial snow machines. We have a long history of fruitful relations with TBC Bank in other projects and so we turned to this professional team for this deal, as well”, Alexandre Onoprishvili, the head of the Georgian Mountain Resorts Development Company, said.

Onoprishvili added that TBC Bank also involved the European Bank in the guaranteeing process, which added to the credibility of the deal.
“This service is very important”, noted Nana Khurodze. “Most foreign companies and banks are familiar with our brand and trust us.  Our cooperation network is global which for investors means ‘if the banks worldwide trust them, then we will, too’. TBC Bank constantly expends the network of its partners, focusing on providing better terms and conditions to the customers.”

Khurodze noted that this service is even more attractive to customers when they are in need of financing. In these types of situations, trade finance offers different types of credit. For instance, TBC Bank can provide the supplier with the contract amount so the buyer can cover the expenses later, according to an individual repayment schedule. Alternatively, TBC Bank can provide credit to a seller until a buyer pays for the goods or services.

TBC Bank’s products are available to broad range of customers: “We are open to any customer who seeks new opportunities  with our trade solutions”, - Khurodze said.