Georgia’s biggest bank by assets, Bank of Georgia, has reported record earnings for 2013, as strategic initiatives have helped the firm increase its pretax profit by 15 per cent.

Georgia’s biggest bank by market share, Tbilisi-headquartered Bank of Georgia, has reported record earnings for 2013, as recent strategic initiatives have helped the firm increase its pretax profit by 15 per cent over the year. This comes at a time when the London-listed bank is gearing up to float its healthcare and insurance subsidiary on a stock exchange later this year.

Reporting its results for 2013, Bank of Georgia, which includes private banking and wealth management services, said it made a GEL245.3 million ($141.95 million) pretax profit, compared with GEL212.8 million in 2012, buoyed by net interest income and net insurance revenue growth. This proved more than enough to outweigh the effects of broadly flat fee and commission income and a small decline in healthcare revenue, as overall revenue growth soared 9.5 per cent to GEL545.5 million.

“The record revenue and profit figures were driven by strategic decisions taken over the last three years; diversifying revenue, controlling costs, growing the loan book and improving asset quality,” said chief executive Irakli Gilauri.

But Gilauri has no intention of resting on his laurels, he said in the statement, pointing to his plans for the future.

"Our market leadership is built on our strong retail and corporate banking businesses, which together are the backbone of the Bank of Georgia franchise. As to retail banking, our express banking is at the heart of our strategy. We believe that further development of our express banking businesses is directly linked to express technologies, and we intend to continue investing in IT, which we consider to be pivotal for the future of the banking industry," he said.

New focus on investment management

Bank of Georgia boasts a broad range of services, including the aforementioned private banking and wealth management divisions. In addition, the company intends to launch its first investment management products this year, with the longer-term aim of building them up to create, "an important fee-generating business".

"We plan to build the growth on the back of further diversified revenue sources. Knowledge and understanding of the market, both Georgian and regional, and proven superior access to international capital will be the drivers of our investment management business growth," said Gilauri, when commenting on the prospects for this part of the bank. 

Bank of Georgia was established in 1903 before becoming listed on the London Stock Exchange in 2006, and growing to become Georgia’s biggest bank by assets, serving more than one million clients in Georgia, Hungary, Israel and the UK.