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Thursday, 27 October 2016


The National Bank of Georgia is in British hands

2009-01-26 17:26

4/4/3/1443.jpegThe National Bank of Georgia has a new owner - the British company Euro Oil. This was revealed on 19th January. That means that one of the country's key banks is expecting significant investment.


69 percent of shares in this credit institution were sold for 12 million lari (1 lari equals 1.6 dollars). According to Kommersant radio, at the bank's last shareholders meeting there was a clash of interests connected with management issues and various substantial and pressing expenses. Commenting on the deal for the same radio station, one of the major investors until now Irina Dzhincharadze (with more than 20 percent of the shares) noted that most of the shareholders considered the aforementioned sum too low, however she personally could not see any other way out of the situation.

The indignation of most of the former co-owners is understandable. Back in the summer Ukrgazbank was intending to buy Georgia's National Bank. And back then the price in question was far higher - 83 million lari. But for reasons that were not divulged, the deal fell through.

This would perhaps not have happened if someone, including the shareholders themselves, could have predicted half a year ago that their relations would reach a deadlock.

There are some interesting details about the bank's new owner. Firstly, it should be stressed that Euro Oil is a company which, unlike Ukrgazbank, has nothing to do with the former Soviet republics. Furthermore, it is part of the Arabic holding RAK Investment. And since last year this in turn has been the full owner of Poti, one of Georgia's two largest ports.

It cannot be ruled out that these circumstances influenced the mixed reaction in Georgia to the sale of National Bank. Yes, some acknowledge, it means investment that the country sorely needs. But others are concerned that the interests of the very poor citizens could suffer, since it is through the National Bank that the state used to pay out its social benefits to them.

The authorities have made some statements intended to reassure the doubters. Hence on 22nd January Radio Kommersant broadcasted the comment of the minister for health and social protection Aleksandr Kvitashvili: "The National Bank is not planning to make any changes and will continue to issue pensions and social benefits". Meanwhile, the minister clarified that the agreement signed between his agency and the National Bank is only in effect until the end of the year. The head of the agency declined to comment on what will happen then.

The new owner has also not yet enlightened the people as to its plans.

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