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- Country Name: Georgia
- Assets: GEL 1,578,357
- Profits: GEL 21,774
- Ownership: 70.83% Liberty Holding Georgia LLC,
12.04% Foreign Institutional Shareholders,
7.12% JSC Liberty Capital (Lado Gurgenidze),
- Date Modified: Nov-2015
Syndicated Analyses:Reuters "Fitch Affirms Six Georgian Banks; Outlook Stable" 28-May-2015:
Fitch Ratings has affirmed Bank of Georgia (BoG, BB-/Stable/bb-), TBC Bank (BB-/Stable/bb-), ProCredit Bank (Georgia) (PCBG, BB/Stable/bb-), JSC Liberty Bank (LB, B/Stable/b), Basisbank (BB, B/Stable/b) and Halyk Bank Georgia (HBG, BB-/Stable).
The affirmation of BoG's, TBC's, PCBG's, LB's and BB's VRs, and (with the exception of PCBG) their Long-term IDRs with Stable Outlooks, reflects their generally robust capitalisation, ample liquidity and still sound financial metrics notwithstanding a challenging operating environment in Georgia. The economic slowdown, depreciation of the Georgian lari (GEL) and higher funding costs are likely to have a moderate negative impact on banks' performance in 2015, but Fitch expects that this will be within the tolerance range of the ratings.
Direct losses from devaluation will be limited, as the rated Georgian banks do not run significant short open currency positions. Nonetheless, with over 60% of banks' loan portfolios US dollar denominated (with the notable exception of LB, 4%), the fall of the lari could create asset quality pressures and a slight decrease in regulatory capital ratios due to asset inflation.
Liquidity is adequate, underpinned by high levels of liquid assets on balance sheets, which provide the banks with solid buffers to absorb unexpected funding outflows.
LB's VR of 'b' reflects its niche franchise and moderate loss absorption capacity, particularly in light of its focus on potentially risky retail lending. It also considers concentration and volatility in the funding base resulting from significant government, municipal and corporate funding. There is also some uncertainty regarding LB's future ownership, strategy and governance, as a majority stake in the bank is now controlled by three private individuals, following the foreclosure of pledged shares. However, this is balanced by the bank's improving performance, growing scale, the status of exclusive payment agent for the distribution of social payments and a low level of foreign currency-denominated loans in the loan portfolio.
In Fitch's view, the authorities would likely have a high propensity to support BoG and TBC in light of the banks' systemic importance, and LB given its social function as the country's primary distributor of pensions and social benefits.Fitch Ratings "Fitch Revises Outlooks on Procredit Bank Georgia & JSC Liberty Bank to Stable; Affirms IDRs" 21-Apr-2015:
Fitch Ratings has revised the Outlooks on the Long-term Issuer Default Ratings (IDRs) of ProCredit Bank Georgia (PCBG) and JSC Liberty Bank (LB) to Stable from Positive and affirmed the IDRs at 'BB' and 'B', respectively.
The revision of the Outlooks follows the revision of the Outlook on Georgia's sovereign rating to Stable from Positive
The affirmation of LB's IDRs, Support Rating and SRF reflects Fitch's view that the authorities would still likely have a high propensity to support LB, given the bank's important social function in Georgia as the country's primary distributor of pensions and welfare payments and the banks' track record of government support.Daily Mail "Ex-Romanian politician, oil tycoon dies at 64" 19-Aug-2014:
Dinu Patriciu, an emblematic politician from Romania's early post-communist years whose later career as an oil tycoon was marred by legal troubles, died Tuesday after a series of illnesses. He was 64.Wikileaks Global Intelligence Files "Georgia's Liberty Bank Boosts Assets By 20% in H1, Doubles Net Profit" 05-Aug-2011:
The owner of Liberty Bank is investment fund Liberty Capital, which was founded by Georgia's former Prime Minister, Vladimir Gurgenidze and the founder of Romanian oil company Rompetrol Group, Dinu Patriciu. This investment fund purchased 91.218% in People's Bank of Georgia in September 2009 from Eurooil.Wikileaks Public Library of US Diplomacy "Lado Gurgenidze Named New Prime Minister Of Georgia" 16-Nov-2007:
Gurgenidze has been Chairman of the Supervisory Board of the Bank of Georgia, a Tbilisi commercial bank, since May 2006. Prior to that he was the bank's Chief Executive Officer.
While the timing Gurgenidze's appointment is unexpected, he is known to be pro-Western and pro-business and it is likely his selection as Prime Minister will be seen as a positive change in the government.
Gurgenidze has ten years of investment banking experience. Prior to joining the Bank of Georgia, he worked as the Managing Director and Regional Manager for Europe at National Bank of Canada's Putnam Lovell NBF, a boutique investment banking firm focused on the financial services sector. He also held positions at ABN AMRO Corporate Finance as Director of Russia and CIS and Director of Mergers and Acquisitions in the Emerging European Markets, and in corporate finance at MeesPierson, a Dutch bank. 3. (U) Born in Tbilisi, Gurgenidze left in 1990 to study in the United States. He attended Middlebury College and received an MBA from Emory University. He is a dual national of Georgia and the UK.Wikileaks Public Library of US Diplomacy "Money And Politics: Who Really Owns Romania?" 03-Aug-2007:
Dan Costache "Dinu" Patriciu: Patriciu is the chairman and majority shareholder of the Rompetrol Group and a prominent member of the PNL. Closely tied to PM Tariceanu, Patriciu essentially controls the PNL's upper echelons and has an enormous amount of leverage over the current government.
In May 2005 he was arrested (but released immediately) on a variety of economic charges in connection to the privatization of the Petromedia refinery, including fraud, money laundering, and tax evasion (reftel B). Progress in the case has been slow, particularly since the beginning of this year.