With Over 1 billion Lari in assets, Bank Republic Société Générale Group continues its market growth
By William King

Established in 1991, Bank Republic Société Générale Group currently holds a leading position on Georgia's retail and corporate banking market. Reporting total assets of more than 1 billion GEL, the bank enjoys status as one of the most successful financial institutions in the country. Thanks to its universal business model, Bank Republic Société Générale Group remains a reliable long-term financial partner for individuals, micro, small and medium-sized enterprises, organizations, and large corporations. Today, Bank Republic Société Générale Group ranks fourth on the Georgian market by total assets and is third by lending, generating a hefty GEL 88 million Net Banking Income (Net Interest Income + Net Fee Income)

In 2006, the French international financial group Société Générale purchased 60% of Bank Republic shares. Later, in 2009, the group increased its shares to 80%. The European Bank for Reconstruction and Development (EBRD) has also been a shareholder of the bank since 2006. Currently, the Société Générale Group owns 93.64% of Bank Republic's stock, with the EBRD holding 6.36% of shares, making Bank Republic Société Générale Group a purely European-owned bank.
Much of Bank Republic Société Générale's current success can be attributed to a major overhaul in management that took place in 2011. After assembling a team of some of the brightest and most finance-savvy banking professionals within the Georgian banking sector, Bank Republic Société Générale Group set out to increase its share on the Georgian market. In doing so, the bank embarked on a new brand platform, which is embodied by the slogan Each of us Matters. This new approach is based on the team spirit principle. This concept embraces the idea that the bank's employees, partners, suppliers and clients are all on the same team, and stresses the idea that the overall success of the bank depends on all members of the team. This is a very inclusive approach, and reflects the bank's goal of fostering long-term, trust-based relationships with its clients, which in turn makes them feel like a part of the team while serving their best interests in the process.

Relationship Banking Approach in Corporate Banking: A Model for Success
In 2012 - 2013, the bank's new management focused on restructuring the Corporate Banking Division. The bank's valued corporate clients are not only large enterprises, but also small and medium-sized businesses, to which Bank Republic pays equal attention. Bank Republic understands that each and every business is unique, and attributes significant importance to actually understanding the characteristics and intrinsic details of each company, from both the micro perspective and from the macro market setting. This approach entails a detailed study of the client, after which the bank then advises its clients on the best possible solutions, services and products, which are tailor-made to suit the company's individual needs.
Simplifying the bank's processes and procedures, as well as ensuring that services and products were delivered to the client in a timely and efficient manner was another important goal of the bank's new management. This approach paid immediate dividends, leading to increased deal flow, improved client satisfaction and greater customer loyalty.
"Corporate banking is of the utmost importance for Bank Republic. Therefore we simplified the procedures and processes for our corporate clients. We are proud to offer our personal experience and expertise, as well as the 150 years of experience Société Générale brings to the table to assist our loyal customers and corporate clients in the development of their businesses and in making them successful. The success of the Georgian economy strongly depends on corporate clients - and this includes primarily small and medium-sized businesses," explains Ramaz Kukuladze, the Chief Commercial Officer at Bank Republic Société General Group.
Throughout the whole process, Bank Republic's team of talented professionals offer follow-up services to their clients at every stage of their development. This follow-up includes providing ongoing advisory services and free corporate training courses. The Bank Republic teamwork around the clock to ensure that the client is happy, which in turn lays the foundation for facilitating the long-term, trusting relationships the bank enjoys with its clients today.
With the shift to a relationship-focused banking philosophy, Bank Republic Société Générale Group began to grow along with the bank's profits and market share, which saw a 16.3% y-o-y increase in their corporate loan portfolio.
Bank Republic Société Générale Group continues to strengthen its corporate portfolio amid a very competitive Georgian banking sector. With its new model of success, the bank hopes to continue with its steady growth and progress on the Georgian market.

A Relationship is Formed

Client: Georgian Industrial Group Holding
Founded in 2006, Georgian Industrial Group (GIG) is the largest industrial holding in Georgia, and boasts a broad business portfolio comprised of several subsidiary companies. These companies are involved in electricity generation, distribution of compressed natural gas (Georgian International Energy Corporation), coal mining (Saqnakhshiri), and real estate. As a member of the EU-Georgia business Council, GIG has been involved in several high-profile international projects throughout Georgia.
The Georgian International Energy Corporation (GIEC), a GIG subsidiary company dealing in energy production, is one of the key companies within the group. GIEC is a prominent player within Georgia's energy sector. The company focuses on two core directions- electricity generation/trade and the distribution of compressed natural gas. Having several HPP's at its disposal, GIEC is one of the most important private energy suppliers in Georgia. Currently, GIEC operates 8 small HPP's throughout the country, as well as a strategically important Gardabani thermo-power plant, all of which combine to contribute to the country's electricity system. The company secures a 21% market share in Georgia's electricity generation in the winter months, and an annual share of 10%. GIEC also exports electricity to neighboring countries (mainly Turkey and Armenia).
GIG Holdings gradually improve the value of GIEC with its experienced management and aggressive development strategies. This in turn, paved the way to the company's success. However, in order for the company to grow and realize its potential, it required the assistance of a dedicated financial partner.
I had a chance to sit down and speak with the Chief Financial Officer/Deputy CEO of Georgian Industrial Group, Zurab Gelenidze, and ask him a few questions about the company and its working relationship with Bank Republic.
"We first started working with Bank Republic Société Générale Group in August of 2012. We received an initial credit of $2 million USD from the bank for the purpose of constructing the Alazani II hydro-power plant (HPP) in eastern Georgia. The Alazani II HPP has an installed capacity of 6 MW and an annual output 40 GWh of electricity. Bank Republic was one of the lenders in syndication with TBC Bank, Caucasus Growth Fund and the Georgian Regional Development Foundation (GRDF) to offer the loan we needed to complete the project," Gelenidze said, underscoring that the funds were targeted towards the development of the Georgian economy, especially the energy sector.
"Bank Republic Société Générale Group recognized the positive signs of the project in terms of the successful launch of the station. As such, the bank decided to extend their exposure to the company, not only on a corporate level, but in other directions as well. This decision was conditioned on the strong performance of the holding in general and on the mutually beneficial rapport we developed during the course of the relationship," Gelenidze explains.
In order to improve initial terms and structure of its other loans from other lending institutions, GIG sought to structure its terms to better suit its business interests and began the refinancing process with Bank Republic. Bank Republic, in step with its pledge to provide specialized services tailored to the specific development needs of its client, accommodated GIG without delay.
"At the end of 2013, the $2 million USD financing obtained from Bank Republic Societe Generale Group was increased to $8.5 million," explained Gelenidze. As such, GIEC's loan terms were extended to 8 years, and the interest rate was reduced. This resulted in freeing-up substantial funds, as well as a much more efficient financing structure for the company."
In shattering a previous misconception about Bank Republic, Gelenidze pointed out "there was a stereotype that existed within the market... that these guys were quite slow with the introduction of credit decisions. However, in this case, the credit decision was made smoothly, effectively and within a couple of weeks' time. It was the whole attitude of Bank Republic that made everything so easy - their overall timetable, their approach and the close relationship they fostered between us. Bank Republic's corporate team did a great job and we really appreciate this," he said.
Asked about his relationship and experience with Bank Republic Société Générale Group, Gelenidze offered only positive remarks, saying that Bank Republic's corporate team "were very helpful, and made timely decisions for our company. It was truly a pleasure working with them."