Bank of Georgia sells Ukraine subsidiary

TBILISI Fri Feb 18, 2011 8:57am EST

Related Topics

TBILISI Feb 18 (Reuters) - The Bank of Georgia BGEOq.L, the country's largest lender, said on Friday it sold its unprofitable subsidiary in Ukraine to several parties as part of its strategy to focus on its domestic operations.

The bank said in a statement it sold an 80 percent equity interest in BG Bank Ukraine to "a number of Ukrainian individuals" for $9.6 million, of which $5.0 million has already been paid. It will receive the rest later this year.

"The move ... aligns well with the Bank's strategy to focus on the Georgian market as it has suspended its international expansion plans," Irakly Gilauri, the bank's chief executive officer, said in a statement.

Bank of Georgia will retain a 19.4 percent stake in the Ukrainian bank.

Bank of Georgia returned to a growth in 2010, ending the year with a net profit of $46.7 million as deposits grew and bad loan provisions fell as the country's economy recovered.

The global financial meltdown hit Georgian banks already reeling from the impact of the Russia-Georgia war in August 2008, leaving the Bank of Georgia with a 2009 net loss of $58.7 million. (Reporting by Margarita Antidze; editing by Alfred Kueppers )

FILED UNDER: