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
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.