The Ukrainian-based bank has a daughter company in Georgia and is currently the ninth largest bank by assets in Georgia.
BoG confirmed the deal and said it would pay $51 million USD (99 million GEL) for total ownership of the Georgian PrivatBank. The move would strengthen the bank’s leading position in retail banking sector, BoG officials said.
"Bank of Georgia Holdings Plc will issue 3.59 million new stocks and will succeed to attract $114 million USD investment. The attracted capital will be served [by] acquiring 100 percent of PrivatBank’s shares,” said BoG management in today’s statement.
The BoG officials believed the acquisition of PrivatBank would increase BoG’s market share in terms of loans by 5.3 percent and almost 2.6 percent by client deposits.
Looking ahead, BoG said it would expand its number of branches, as PrivatBank had 93 branches throughout the country. It did not specify whether it would merge with PrivatBank branches or rebrand them.
Meanwhile PrivatBank is the largest commercial bank in Ukraine in terms of the number of clients, assets value, loan portfolio and taxes paid to the national budget. It’s headquarters are in Dnipropetrovsk, in central Ukraine. In March 2014, American magazine Global Finance reviewed it as "the Best Bank in Ukraine for 2014".
BoG is the country’s leading bank. It accounted for 32 percent of the Georgian market by assets, 31 percent by loans and almost 29 percent by client deposits. Furthermore, it is also the leading corporate bank in Georgia, where the energy sector holds 8.1 percent of the corporate loan portfolio of the bank.
Bank of Georgia Holdings Plc revenues for the full 2013 year reached $545.45 million USD. This was 9.47 percent above the prior year's results.
BoG was the first Georgian bank to debut on the Main Market of London Stock Exchange in February 2012.
Overall, Georgia’s banking sector is represented by 21 commercial banks, including 18 with foreign capital and the branches of two non-resident banks.