EBRD Buys Equity Stake in Basis Bank
OREANDA-NEWS. May 19, 2008. The EBRD is acquiring a 15 percent-stake in Basis Bank, a privately-owned Georgian bank through subscription to new shares, reported the press-centre of EBRD.
The investment will strengthen Basis Bank’s capital base in order to support its further growth. The EBRD’s involvement as a shareholder will improve Basis Bank’s business operations and corporate governance over the next 3 years through the implementation of an extensive institution building plan developed by the EBRD.
This plan will focus on improvements in the bank’s corporate governance, organisational restructuring, business development, operations, risk management and internal systems. The EBRD will also nominate a member to the Supervisory Board of the bank.
Basis Bank and the EBRD have been partners since last year, when the bank became the first recipient of a \\$6 million loan for lending to Micro, Small and Medium Enterprises under the newly-introduced Georgian Financial Sector Framework and trade finance line worth \\$1 million under the EBRD’s Trade Facilitation Programme.
With the acquisition of equity stake in Basis Bank the EBRD now intends to build on this successful relationship and strengthen the position of an independent competitor in the highly concentrated Georgian banking sector. Basis Bank has a long history, stable and transparent ownership and a branch network that will provide an attractive platform for future growth.
Basis Bank was founded in 1993 and has successfully established itself in the Georgian banking sector. It is a universal bank providing services to selected customers, SMEs as well as entrepreneurs and middle-class consumers. The bank’s strategy for the next five years will be focused on the expansion of its branch network, the strengthening of its retail and corporate businesses, the optimisation of corporate governance and organisational structure and improving the efficiency of risk management.
Kurt Geiger, EBRD Business Group Director Financial Institutions said “our investment in Basis Bank will be EBRD’s only shareholding in a Georgian bank without the presence of a strategic investor. The acquisition of equity stake will provide us with an opportunity to support the growth of a small privately-owned bank and to encourage competition in the Georgian banking sector”.
Zurab Tsikhistavi, CEO of Basis Bank, added: “Since last year we have established an excellent relationship with the EBRD and it has been our express wish to get the EBRD on board as a minority shareholder. We look forward to benefiting from the EBRD’s expertise and know-how in our country and sector.”
To date, the EBRD has invested into almost 80 projects with a total project value of ?780 million in Georgia. 85 percent of the investments are in the private sector. Among the Bank’s other priorities in the country are energy efficiency and infrastructure projects.