Caspian Energy Journal Caspian European Club
Tuesday, 17 October 2017 10:15

SME will be increasing its contribution into GDP of the country in the coming 5-7 years, - Shahin Mammadov Featured

Caspian Energy (CE): How would you assess the development of the banking sector of Georgia? Which factors promote and hinder the development process? What role does PASHA Bank Georgia play in this market segment?

Chairman of the Board of Directors and Chief Executive Officer of PASHA Bank Georgia Shahin Mammadov: When we entered Georgian market it was already a matured and in a very competitive landscape where 2 big banks were listed on London Stock Exchange and with hands-on approach regulator. We are observing the consolidation in the banking sector on the backdrop of increasing competition in SME and retail segments. PASHA Bank is offering corporate and investment banking services for now mainly to the large companies. This is a very competitive niche where we try to compete by capitalizing on our capital markets experience gained in our home Azerbaijani market as well as on our ability to play a significant advisory as well as capital provider roles in syndicated deals.


CE: Transport projects are being actively developed in both countries today. Do you feel the market revival in this regard? How will the launch of the Baku-Tbilisi-Kars railway impact on the regional banking sector and its integration? 

Shahin Mammadov: We believe that definitely such type of projects aiming to improve the infrastructure of all there countries involved will positively impact the whole situation in this area and as PASHA Bank we always support such type of regional projects and believe that after this railway becomes operating there will be needs for strong financial partner and we will be glad to be part of this process in case of possibility.   


CE: In your opinion, what will be the impact of the free trade with China agreement, which is famous for its dumping methods, on your work, as well as on work of other international banks? Don’t you fear that this can change the structure of the banking sector? 

Shahin Mammadov: Let me start from the last part of the question. Definitely there is no any fear because of we see more opportunities in this development as any change in itself is an opportunity which we hope to take an advantage of considering our stable position in the Georgian banking market. Such agreements usually boost the trade between countries and as a financial institution we can only be glad to see it and also play our role by financing increased trade flows.


CE: Could you please tell about the preliminary indicators of the Bank’s performance for this year? What are your forecasts for 2018?

Shahin Mammadov: 2017 year is our 3rd and last year within our 2015-2017 strategic period in which the main aim as to build the Bank as an institution with all processes, make stronger the financial position and increase market share in corporate banking business. We expect the profitability level will be within the budget estimations and targeting moderate growth of our loan portfolio. We just finalized our 2018-2020 strategy document and we will inform about our future plans and operating model for the next 3 year till end of 2017 year.


CE: Do you see any fundamental changes in the small-business lending market? How would you assess its volumes, growth rates, development trends?

Shahin Mammadov: We see the trend that more and more banks are switching the focus on MSME business and also as you know non-banking credit organizations are also strong enough especially in micro lending and some of them transformed into Banks. We see the growth opportunities of that segment and believe that SME will be increasing its contribution into GDP of the country in the coming 5-7 years.

CE: What are the competitive advantages of your Bank in the lending market of Georgia?

Shahin Mammadov: We feel that our exclusive focus on large corporate segment has allowed us to develop an expertise, over several years’ operation, and brand awareness that had allowed us to offer innovative solutions to our client base in a timely and efficient manner. We pride ourselves on significant analytical capabilities that we have built and rely on to differentiate us from the competition and allow to provide top-notch services to our clients.


CE: How did the last devaluation of Lari affect the banking operations of Pasha Bank Georgia? Has the Bank developed a plan for overcoming the crisis?

Shahin Mammadov: We are paying big attentions to managing the market and other types of risks that we face in our everyday operations. Major part of our loan portfolio is in local currency. So we were well positioned to weather the devaluation with minimum if any negative effects. Our clients have also  been protected to some extent as Lari financing allowed them to avoid FX risk.


CE: Could you please tell about the plans on external markets? Which sectors of economy are the most attractive for Pasha Bank Georgia in terms of investment?

Shahin Mammadov: Our current portfolio is quite diversified in terms of sectors and we have exposures in energy, utilities, trade and other industries. We are aiming to increase our exposure to hospitality sector, hydro power and other sectors in which we see the opportunities to grow without limitation of other sectors on which we will continue to focus based on our Bank risk appetite and possibility of finding ways of cooperating productively with any corporate that is fundamentally bankable.


Thank you for the interview

Caspian Energy

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