TBC Bank purchases Progress Bank, takes lead in Georgian market
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TBC Bank’s ambition to build the leading banking group in Georgia has become reality after it purchased another local bank, Progress Bank, initially founded by Georgia’s former Minister of Energy Kakha Kaladze.
This will be the second major transaction in Georgia’s banking sector, following after the first transaction in September when TBC Bank purchased Bank Republic, a member of French Societe Generale.
Both transactions were expected to be completed by the end of this year and both transitions would reinforce TBC Bank’s positions in all operating segments with special strengths in retail banking, including among affluent customers.
Meanwhile several mergers between TBC Bank and Bank Republic, and TBC Bank and Progress Bank was already underway.
The National Bank of Georgia (NBG) has cancelled Progress Bank's license for operations yesterday.
After merging with these two large banks TBC Bank is becoming the leading bank in Georgia in terms of loans and deposits.
TBC Bank agrees to acquire 93.64 percent stake in Bank Republic for 315 million GEL and selected assets and liabilities of Progress Bank, creating the largest Georgian bank by both loans and deposits,” announced TBC Bank last week.
TBC Bank also announced yesterday that it agreed to acquire the remaining 6.36 percent stake in Bank Republic from the European Bank of Reconstruction and Development (EBRD), for 22 million GEL as part of its previously announced transaction to create the largest Georgian bank by both loans and deposits.
Creation of the largest bank in Georgia by both loans and deposits, with TBC Bank’s loan market share increasing by 7.3 percent to 35.7 percent and the deposit market share increasing by 5.3 percent to 34.5 percent.
We believe the acquisition of Bank Republic is a critical step in delivering on TBC Bank’s strategy and represents a major step forward in TBC Bank’s ambition to build the leading banking group in Georgia and the broader Caucasus region,” said Vakhtang Butskhrikidze, Chief Executive Officer of TBC Bank.
The TBC Bank management team promised to ensure "a smooth integration” of the businesses and even welcomed Bank Republic employees into TBC Bank.
We are delighted to merge with such a motivated and professional management team and believe that we have selected the best partner for our subsidiary in Georgia. We are looking forward to successfully complete the transaction and will closely collaborate to ensure the transition process is smooth,” Antoine Gabizon, Chief Executive Officer of Bank Republic added.
Meanwhile, several Progress Bank branches have already closed and its webpage has been shut down.
Progress Bank was founded in 2008 by Kakha Kaladze, who is now the Secretary General of the Georgian Dream. Local bank co-owned by Kaladze and the former Prime Minister and multi-billionaire Bidzina Ivanishvili.
After coming to power in October 2012 Kaladze sold his shares. In December 2013 a 78.29 percent stock in Progress Bank was sold to the International Investment Group Vebion while Ivanishvili increased his own share in the bank from 8.67 percent to 21.71 percent.
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