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PASHA Bank will Launch Attractive Mortgage Offer in Georgia

Published: August 13, 2012 | 10:37 am
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Representative in Georgia: “In Post Soviet Countries Georgia has one of the most developed banking sector.”

PASHA Bank, the second largest bank in Azerbaijan, plans to start activities in Georgia till the end of the year. With its local head office located at Rustaveli Avenue, the bank  will begin serving Georgian clients and expand throughout the country. The COMMERCIAL TIMES interviewed Anar Ismayilov, PASHA Bank representative in Georgia, regarding the bank’s plans in the local market.


- Established in 2007, PASHA Bank is the second largest bank on Azeri market in terms of the volume of paid-in capital (AZN157.0 million). As for expansion abroad, which countries, besides Azerbaijan, does the bank operate or plans to be presented?

- PASHA Bank put an extra focus to grow along with its customers to meet their needs and provide them with a required banking service promptly and efficiently. Expecting further integration of some of the regional markets, we predict increasing of Azerbaijani entrepreneurs that broaden their business activities. Therefore, we naturally wish to increase our coverage, with the aim of backing such current and potential customers. Our aim is to advance the bank with the status of a regional financial institution.

On the other hand, access to international markets is required in terms of expanding and strengthening ties with foreign partners and learning international experience. In this context, PASHA Bank is also planing to set up an office in Geneva in the foreseeable future, which should facilitate the development of our private banking business line offering highly personalized services to affluent individuals.

- As for Georgia, reportedly, PASHA Bank will soon enter the local banking market. What’s the reason why the bank decided to expand to Georgia? What are the main features about the local banking sector that attracted PASHA Bank?

- We treat operating on the Georgian banking market as a good chance to increase the bank’s competitiveness in terms of foreign market. Among Post Soviet Countries Georgia is the one with the most developed banking sector with traditional and innovative technological products as the result of experience of a broad institutional investors’ participation. We would like to benefit from this experience in our business in Azerbaijan. Furthermore the combination of the country’s dynamic growth and pro-business legislation to protect investors is promoting Georgia well to become an attractive destination for foreign capital. Based on the above mentioned, we see the Georgian banking sector as continuously and strongly developing industry in a favourable macro-environment thereafter.



- Which regions of Georgia will be the priority? How many branches will PASHA Bank open initially?

- An intensive expansion of the branch infrastructure is not a priority issue for our business model. Therefore, in the mid-term perspective, the services to the clients will be provided from the only head office in the capital. Meantime we will be eying other active Georgian regions and evaluating the opportunities to expand our bank’s client service centers, especially towards the western area where business activity is rapidly increasing.

- What niche will PASHA Bank occupy in Georgia? Will it be a more retail or corporate market oriented bank?

- PASHA Bank is mainly oriented on corporate sector. Our only retail activity is maintaining the accounts of our employees, the salary accounts of our corporate clients, and personal accounts for entrepreneurs whose companies are banking with us.

- One of the major issues in Georgia’s banking sector is interest rates on loans, especially on mortgage loans. What’s minimum interest rate offered by PASHA Bank in Azerbaijan on mortgage lending and how competitive will the bank be presented in Georgia in this respect?

- Competition in pricing is well advanced in the banking industry of Georgia, and no participant may underestimate this factor if wants to be successful. I think there are enough contributory factors for PASHA Bank to meet expectations of the clients in this sense.

Major part of the mortgage business in Azerbaijan is nowadays boosted by the Azerbaijan Mortgage Fund (AMF), which is funded by state allocations and the AMF’s mortgage bonds. The mortgage loan has an annual interest rate fluctuating within 6-8%. The employees of our corporate clients were welcomed to benefit from this product in Azerbaijan. PASHA Bank is not just among of several agent banks offering such fixed mortgage loans, but also actively provides market-maker services for mortgage bonds of the AMF in the local security market. I believe that we will be able to propose our own attractive mortgage programme to the Georgian clients as well.

- As for corporate market, what will be the bank’s strategy? Will PASHA Bank be focused at large companies or SMEs?

- In Georgia, we will continue to maintain our brand of corporate bank primarily for large-sized companies. However we are determined to develop cooperation also with small and medium size businesses that have ambitions and good potential to convert into large corporate players.

- How important would you say agro loans could be for PASHA Bank in Georgia?

- Agribusiness is among of industries attracting our attention. Despite some factors of high risks are available for creditors in the industry, we are interested in financing of the companies with successful experience. This sector is of equal interest to us the transport, ICT, trading, services, hospitality, construction, and energy sectors.

- How would you evaluate the local banking sector and competitive do you expect will PASHA Bank will be in Georgia?

- As I mentioned earlier, Georgian banking system is very well developed and highly competitive; some of the participants have high credit rankings. We expect to face a strong competition and we want to become an able competitor. Without competition, there will also be weaker incentives for innovation and improvements in products/services etc. Although the local banks have gained loyal customers providing them with various services during many years, PASHA Bank will try to create value to its customers through establishing the sense of exclusivity, stability and reliability in the partnership.



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