Washington, D.C., and Tbilisi, Georgia
, December 5, 2003—The International Finance Corporation, the private sector financing arm of the World Bank Group, today announced the signing of an agreement with TBC Bank to allow for interest rate and currency swaps. The ISDA (International Swaps and Derivatives Association) Master Agreement, signed today by IFC and TBC Bank, establishes a framework for these transactions.
The agreement, the first of its kind for Georgia, will allow TBC Bank to improve its risk management capabilities. It will be used by TBC Bank to hedge the dollar interest rate risk and dollar/euro currency risk on its oustanding term borrowings. The agreement is part of a broader strategy to introduce innovative products to clients in the Central and Eastern Europe region.
Mr. Declan Duff, director of IFC’s Global Financial Markets department, said, “This agreement is an excellent use of IFC’s resources to promote the development of TBC Bank and the Georgian financial sector in general. It shows the value-added services that IFC can provide its clients. We are delighted to be introducing this modern financial technology to a leading bank in a frontier market.”
Mr. Edward Nassim, IFC's director for Central and Eastern Europe, commented, “This project builds upon IFC's track record for innovation in the Georgian financial sector. IFC is very pleased to continue supporting TBC Bank, our oldest banking client in the country.”
Mr. Vakhtang Butskhrikidze, TBC Bank’s general director, said, “TBC Bank is the first Georgian bank to use swaps as a risk management tool. Entering the swaps will help us better match our asset and liability positions and increase our ability to manage the bank’s finances for the benefit of our customers, depositors, and shareholders.”
TBC Bank was established in 1992 and is Georgia’s oldest private commercial bank. It is the largest Georgian bank in terms of total assets and has the largest market share of deposits. It specializes in lending to corporate clients and small and medium enterprises.
Georgia joined IFC in 1995. Since then, IFC has approved $103.8 million of investments to finance projects primarily in the financial, infrastructure, power, and real sectors. The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
