|
| Description of company and purpose of project |
The project is to provide a subordinated loan of $4 million to support the Tier II Capital of TBC Bank (the Bank, TBC, or the company), one of Georgia’s leading banks. The subordinated loan will serve three important purposes:
- provide capital support to a leading Georgian bank which will allow for continued growth in lending activities to SMEs and individuals;
- provide TBC Bank with funding for longer term investments in its own infrastructure; and
- introduce a new financial instrument to the Georgian banking sector by utilizing newly implemented capital adequacy regulations. Currently the Bank focuses on funding SMEs and trade finance projects in addition to doing business with multinational companies, embassies and NGOs. |
|
| Project sponsor and major shareholders of project company |
| The project’s sponsor is TBC Bank, which is the largest bank in Georgia, holding 20.1% of the country’s banking assets and 26.4% of deposits. TBC Bank was established on December 17, 1992 and provides a wide range of retail and corporate banking services. The founding shareholders are several local Georgian businessmen who retain a 47% direct and indirect shareholding in the Bank. Other major shareholders include Soros Investment Capital (25%), DEG (10%) and IFC (9%). |
|
| Total project cost and proposed IFC investment |
| The proposed IFC investment is a subordinated loan of $4 million. |
|
| Location of project and description of site |
| TBC Bank is headquartered in Tbilisi and has nine branches, four of which are in Tbilisi. |
|
| Project Development Impact and IFC's Role |
The expected development impact of this project is high, because it achieves the following objectives in a frontier country:
- Contribute to further development of a leading Georgian bank through supporting its capital base, allowing for increased asset growth and investment in the Bank’s infrastructure. TBC plays a crucial role in terms of improving public’s confidence in banking sector in general and providing a role model for other banking institutions in the market.
- Allow a leading Georgian bank to increase the maturity of its liabilities and thereby better manage its asset and liability position.
- Introduce a new financial instrument into the Georgian banking sector. The project will also support the efforts of the National Bank of Georgia to bring the local capital adequacy guidelines more into line with Basle rules, by utilizing the framework established by newly implemented regulations.
IFC role will complement a broader focus on improving the business environment by further development of the banking sector in Georgia through provision of long-term funding to support the leading Georgian private bank in its further development. The proposed investment is consistent with and supports IFC’s regional/country strategy. |
|
| Environmental and social issues - Category FI-1 |
This is an FI type 1 project. TBC Bank will need to maintain an environmental management system that is adequate to identify and address any environmental and social issues associated with the project.
|
|
| To contact the project company, please write to: |
Thomas E. Lubeck
tlubeck@ifc.org |
|