Banking
Posted: 1 week ago

Economic Forecasts by TBC Bank and Its Leader

The Business Partner TV program broadcast by Channel One of the Georgian Public Broadcaster (GBP), has discussed the economic forecasts of TBC Bank and its leader.

The TBC Bank Director General, Vakhtang Butskhrikidze, noted that TBC follows only one objective – the simplification of the life of Georgian citizens and partner companies. This is a fundamental value for TBC. Therefore, the bank aims to shape an ecosystem capable of granting more free time to people. 

Today, TBC Bank is thought of as a commercial bank, but it is not only the commercial components that generate incomes. The corporation has embraced an expanding number of institutions. Consequently, the commercial bank is not supposed to remain a key source of income for TBC. 

Participants on Business Partner noted that their current success seemed unimaginable 25 years ago. Today, we can talk about TBC as a technological corporation that has introduced a lot of technological innovations. So, where will TBC Bank be in 25 years, both in Georgia and abroad, and will TBC be perceived only as a commercial bank? – When talking about these issues, Butskhrikidze noted that the size of major companies has essentially changed at the London Stock Exchange and in the US over the past 50 years. 

For companies in the 19th century  an average age was 100 years;  this age narrowed in the 20th century, and today in the 21st century technologies change rapidly. Consequently, companies pass through different phases very quickly. Therefore, our team believes  that TBC has passed a very important phase, but, at the same time, changes and necessary adaptation are necessary, including the shaping of an ecosystem. 

When developing similar ecosystems, commercial banks frequently go out of their action range and enter non-core businesses. Regarding this issue, Butskhrikidze noted that a commercial bank does not make investments in physical real estate, and this is not their objective. Investments are made in the only space that TBC puts money in jointly with partners. 

“Based on western research reports, commercial banks remain reliable institutions to invest in, and commercial banks have higher trustworthiness in this respect. In Georgia, like western countries, the banking sector is the most regulated field in terms of financing and information. Therefore, to protect TBC data, TBC has recently been investing tens of million of GEL in technologies”, Butskhrikidze noted. 

Vakhtang Butskhrikidze has also commented on the GEL exchange rate, as a major challenge for the business sector in Georgia. Today, the GEL has slightly declined, and its exchange rate came closer that of early August 2019, when 1 USD was worth 2.97 GEL. Then the rate slightly strengthened, and today the rate is at 2.96 GEL. 

The TV program’s co-presenter Mikheil Chkuaseli, Director General of the Gurieli company. noted that it is necessary to comprehensively explore the reasons behind currency depreciation, because the GEL exchange rate has declined despite the fact that all fundamental macroeconomic parameters affecting the GEL are positive. 

The co-presenter has also referred that GEL exchange rate forecasts made by the Galt & Taggart Analytical Company, a subsidiary of Bank of Georgia, and TBC Bank. According to an analysis by both financial companies, the GEL exchange rate has depreciated 10%-13% more than expected, and the national currency is expected to strengthen by the end of 2019. 

Butskhrikidze agreed with the co-presenter’s forecast, and noted that it is difficult to determine the exact time when the GEL will start strengthening, but there are theoretical expectations that GEL will strengthen. 

“I would refer to in-house reports by our analysts, under which, based on both external and internal factors, the GEL has devalued more than expected. I cannot specify the time, whether it happens in a week or several months, but there are theoretical grounds to assert that the GEL will strengthen, definitely”, the TBC Bank Director General noted.