By Martin Banks
The World Bank forecasts 5% growth in 2019, 2020 and 2021 and the economy is becoming increasingly diverse and competitive. Its strategic location on the Belt and Road project means that attention on this small, culturally rich, nation is likely to grow in coming years.
Georgia’s growing economic and political proximity to the European Union means its dynamic private sector is of interest with increasing attention being paid to its key economic players. In this context, TBC Bank is an important actor worth a closer look. TBC is listed on the Premium Segment of London Stock Exchange and is part FTSE 250 index; a major achievement for a bank operating in a region with residual political instability.
Commenting on the choice of London, CEO Vakhtang Butskhrikidze describes London as “the deepest and most liquid stock market in Europe” and that it “benefits from being the best center of regional expertise”. The London listing also gives Georgia an anchor in Western Europe, consistent with its Euro-Atlantic aspirations. Butskhrikidze is conscious of this: “As Georgian citizens we are delighted to be closer to our country’s friends in Europe and North America”. As he acknowledges, the relationship with the EU is particularly important as it “supports the country’s long-term stability and prosperity”.
Although much of this work towards closer integration is driven politically from above, it is essential that it is supported by the private sector and civil society; TBC is a key part of this.
In addition to supporting and underpinning Georgia’s integration with the European Union, TBC has plans for regional expansion with an “ambition to expand well beyond the borders of our country of origin”. In recent months the Bank has expanded to Uzbekistan following the purchase of payment service Payme, and to Azerbaijan following a merger with Nikoil Bank. Further expansion is planned in the coming months and years and TBC is well-placed to enlarge across the region, further supporting regional integration.
A notable feature of TBC is the extent to which it has become integrated within Georgian society and culture. Its team are committed to their role as a wider force for good in Georgian society. Although most large businesses undertake some kind of Corporate Social Responsibility (CSR), TBC goes further than most.
Alongside sponsorship partnerships including with the popular Georgian Rugby team, TBC supports a breathtakingly wide range of cultural initiatives including the Tbilisi Open Air Festival and supports its own art gallery.
Aside from its traditional banking services, TBC has moved forward with its digital banking offer. It has recently launched Space – its digital-only bank – and has developed an online shopping app, Vendoo. This is in line with a wider trend towards rapid adoption of e-commerce throughout the country; something that will increase its accessibility to Western investment.
Although many in the West might be concerned about regional stability and the impact of any sudden change in the security situation, TBC appears to be well-placed to be deal with any disruption.
Despite seeing the situation with Russia as “stable”, TBC builds potential adverse developments into its contingency plans and in the words of Butskhrikidze “has no direct material exposure to Russia”. This reflects a growing trend throughout the Georgia economy that has seen it tilt towards the EU and the West whilst developing a pivotal role in broader Eurasian integration.
Like most nations that were previously members of the Soviet Union, Georgia has encountered difficulties since it achieved independence. However it has a thriving and rapidly modernising private sector, making it a welcome target for inward investment. This trend is likely to increase over the next few years as China advances its Belt and Road Agenda.
Georgia is in a perfect position to act as a transit point sitting between Europe and Asia and is likely to see investment from both sides in the near future. The role of TBC – as Georgia’s leading bank and a cornerstone of Georgia society – appears therefore be key in the country’s emergence as a regional economic power in the coming years.