Georgia: TBC Bank Expects to Increase Sales Volumes by Merging with Bank Constan...

Print
 
Dec 2014
Georgia, December, 15 2014 - With 60 branches and 150 thousand customers Bank Constanta is merging with TBC Bank. The merger will be legally registered in January of 2015 after which Bank Constanta and TBC Bank will operate as one legal entity.

The decision was made in consideration of the new challenges that exist on the microfinance market and the high potential for growth in this business, according to officials.  

“The growth potential of the microfinance market in Georgia is very high,” said Vakhtang Butskhrikidze, TBC Bank’s CEO. “If we look at how the following segments are being financed - corporate, individuals and small and medium business - we will see that the microfinancing sector is the least developed. Accordingly, challenges and potential for growth exist in precisely this direction. Bank Constanta, 100% owned by TBC Bank, is the leading financial institution on the microfinance market and especially in the agro direction. So this merger is very important for both sides - for TBC Bank as well as for Bank Constanta,” he added.

“After the merger, microfinancing will become a priority for TBC Bank. We believe that we will be able to effectively use our experience to develop the microfinance segment and strengthen our leading position on this market. For Georgia’s financial sector, this means more competition in the microfinance sector, and more competition will lead to the development of the country’s economy,” he said.

Following the merger, the Constanta brand will gradually be replaced by the TBC brand. The name, colours and logo of Constanta will be changed. However, the name “Constanta” will remain and Bank Constanta branches will continue to work under the name TBC Bank-Constanta. “Several hundred thousand GEL will be spent on the rebranding of Bank Constanta,” said Butskhrikidze.

Customers will still be able to use Bank Constanta’s products. However, the variety of products that are available will be increased via particular offers from TBC Bank.

“For the clients of Constanta, the merger will bring more opportunities, technological progress, a wider variety of products, and stable cooperation. As for the employees of Constanta, for them the merger will create an opportunity for professional development,” said Butskhrikidze.

“There are several benefits that TBC Bank will experience through the merger with Bank Constanta. First of all, the volume of our sales will be increased. This is because whereas today TBC Bank’s branches sell only TBC Bank’s products, after the merger, from February 2015 we will sell Bank Constanta’s products as well. At the same time, again from February 2015 TBC Bank products will be getting sold in 60 branches of Bank Constanta. We see synergy in expenditures as well. The cost of funds of TBC Bank is much less than that of Bank Constanta and after the merger Bank Constanta’s cost of funds will be dropped to TBC Bank’s level and the synergy will be about GEL 5-9 million,” he added.

“The benefit for Bank Constanta is that the branches of TBC Bank will become available to Bank Constanta customers as well,” said Nika Kurdiani, General Director of Bank Constanta. “TBC Bank has been operating very successfully on the retail banking market. It has many products, a huge technological base which gives us and our customers many opportunities. Bank Constanta is already well developed which means it is already time to think about further development. It would cost a lot for us, but after merging with TBC Bank we will benefit from its products without paying anything. TBC Bank is one of the biggest and most preferred employers in Georgia and it is very beneficial for our employees as well as they will automatically become TBC Bank’s employees. The customers will still be able to use Constanta products, just the variety of products available will be increased via particular offers from TBC Bank. I also want to say that Constanta does not plan to change its field of specialisation. For example, we were always focused on agro credits, and so we will continue to be focused on this field,” he added.

In order to carry out the merger smoothly, quickly and effectively, Bank Constanta customers will be informed on a timely basis about the formal procedures related to the merger, in particular, regarding the renewal of agreements.

Bank Constanta has operated as a commercial bank since 2008. Its strategic area of operations is providing financial services to micro and small enterprises. TBC Bank became the owner of Bank Constanta in 2011. Since then, TBC Bank has invested almost GEL 226 million in the development of Bank Constanta. As a result of this investment, the Bank’s total portfolio increased by 400%. This enabled Bank Constanta customers from other cities and regions to receive the necessary financial support for the development of their micro or small businesses.

Currently, Bank Constanta provides financial services to micro and small enterprises through 60 branches located throughout Georgia. The majority of its credit portfolio consists of micro business and agro loans.



Source : The Financial
 

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More