09TBILISI346, GEORGIA SUBJECT: JSC PROCREDIT BANK GEORGIA

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Reference ID Created Released Classification Origin
09TBILISI346 2009-02-20 13:20 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Tbilisi

VZCZCXRO7972
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSI #0346 0511320
ZNR UUUUU ZZH
R 201320Z FEB 09
FM AMEMBASSY TBILISI
TO RUEHC/SECSTATE WASHDC 1011
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS TBILISI 000346 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/CARC, EEB, OPIC for DEBORAH HOWARD 
 
E.O. 12958: N/A 
TAGS: EINV EFIN GG
SUBJECT: GEORGIA SUBJECT: JSC PROCREDIT BANK GEORGIA 
 
REF STATE 8834 
 
1. Summary: In response to the reftel, Post's inquiry into JSC 
ProCredit Bank Georgia from both an international financial 
institution and a competitor revealed no negative information.  End 
Summary. 
 
2. Post has no reports questioning the credibility or positive image 
of JSC ProCredit Bank Georgia (PCBG).  Post contacted IFC 
(International Financial Corporation ) which is familiar with PCBG's 
affairs and activities in the Georgian banking sector.  IFC 
confirmed that PBG is a legitimate bank in good standing.  A 
representative of HSBC confirmed the same. 
 
3. In December last year, PCBG's Fitch Ratings were the following: 
Long-term foreign currency Issuer Default Rating (IDR) at B+; 
long-term local currency IDR at BB-; short-term foreign and local 
currency IDR at B; individual at D; and support at 4.  The outlook 
for the long-term IDR ratings is negative.  According to Fitch, the 
individual ratings reflect PCBG's reasonable asset quality and 
performance to date, satisfactory liquidity, sound capitalization 
and significant domestic franchise.  However, the ratings also note 
the high-risk operating environment, credit and operational risks 
associated with recent rapid growth, and PCBG's high proportion of 
foreign currency lending. 
 
4. PCBG is the fourth-largest bank in Georgia in loan and customer 
deposits, with a market share of about 8%.  Like other banks in the 
ProCredit group, PCBG is a development-oriented bank which 
specializes in micro and SME lending in emerging economies. 
ProCredit Bank has 57 branches countrywide and serves more than 
220,000 clients. 
 
 
5. On December 19, 2008, PCBG signed an agreement to receive $47.5 
million credit from the German Development Bank (KfW), backed by the 
guarantees of the Austrian Development Bank OeEB.  The credit will 
be used to increase the credit portfolios of small and middle size 
enterprises.  Credit will be issued in 5 year terms with an annual 
interest rate of 19-34%. IFC (the World Bank Group) is also planning 
to issue a credit to PCBG consistent with their pledge at the Donors 
Conference in Brussels (October 2008). 
 
6. PCBG plans to construct a new head office in the center of 
Tbilisi, and on February 17 announced a tender for construction 
companies. 
 
7. Post has no information that PCBG has links to corruption or 
terrorism.  (Embassy Note: Maya Meredova, deputy General Director fo 
PCBG is married to the CFO of Georgia's largest bank - Bank of 
Georgia. End Note.)

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