The Messenger #144 (1411) - HSBC gets banking license for Georgia

Tuesday, July 31, 2007, #144 (1411)

HSBC gets banking license for Georgia
By Christina Tashkevich

The National Bank of Georgia (NBG) issued HSBC, one of the world's largest companies, a license to start banking operations in the country.

HSBC's Tbilisi branch had no trouble showing the required startup capital of USD 10 million. The head office of HSBC Bank Georgia is to be on Rustaveli Avenue, and is slated to start serving its first customers in November.

NBG president Roman Gotsiridze said after meeting with HSBC officials July 30 that the gargantuan banking group's entry into Georgia means there's growing interest from investors around the world in the country.

The rise in foreign investments is clearly visible in the banking industry, Gotsiridze added. "This is a precondition for strengthening competition in the sector, as well as improvements in banking services," he said.

The general director of HSBC Bank Georgia, Steven Bennett, noted that the National Bank "quickly, but at the same time scrupulously" reviewed the HSBC's application.

Praising structural reforms as well as the improvement of the business environment in Georgia, he said HSBC plans to open a top-notch foreign bank in Tbilisi at an important period in Georgia's development.

HSBC, headquartered in London, has an international network of more than 10 000 offices in 83 countries.

A week earlier, Ireland's largest bank, Allied Irish Bank, announced it is also looking at investment opportunities in Georgia.

Tbilisi expects that the domestic banking sector will attract USD 700 million in foreign money by the end of the year, predicting that more foreign banks will step into the market before long.

The Economic Development Ministry estimates the growth of the banking sector over the last two years at 45 percent. In the first quarter of 2007, assets of commercial banks in Georgia increased by 62 percent to GEL 5 billion, while the share capital of the banks is up 97 percent.

National Bank figures put assets of the country's banks at GEL 5.7 billion in June, a 70.2 percent rise over June 2006.

Last month figures also show a sharp rise in loans made in lari, up 52.8 percent over the last year to GEL 911 million. Loans in dollars are up even more, hitting USD 1.56 billion this June, an increase of 69 percent over June 2006.