Bank Republic Bank Republic (BR or the Bank) was founded in 1991, when Georgia was making its first steps towards democracy and free market economy by a group of private entrepreneurs and companies from aviation, transport, telecom, and energy sectors.  Since inception, the Bank has focused on corporate banking including large state-owned and private companies of strategic importance to Georgia.  Acquisitions of two smaller local banks in 1995-96 contributed to the Bank''s growth of assets and resource base.  In 1996, the Banks first international audit was performed by KPMG.  In 2002-2003 BR broadened its product range by adding retail banking, which is now the second major business line for the Bank.    As of December 31, 2006 the Banks total assets amounted to GEL 350 million ($204 million equivalent) representing 8.3% of the total assets of the Georgian banking sector.  Bank Republics equity amounted to GEL 63 million ($36.6 million equivalent).  The Bank holds a 11.3% share of total deposits and 12.2% share of deposits of individuals.     Most of the Banks business has historically concentrated in Tbilisi, but in 2000-2001, the management developed and started to implement a branch network expansion plan.  Currently, BR operates 7 branches and 16 offices (service centers) located in Georgias main industrial and economic centers.  All of Banks branches serve both corporate and individual clients, while offices (service centers) provide banking service solely to individuals.  Over time, BR is planning to convert all offices into universal ones.      Bank Republic stands out among its peers in three respects:    - its strong record of profitability in the past few years;  - clearly formulated SME- and retail-oriented business development strategy; and  - as the first strategic acquisition of a Georgian bank by a leading West European banking group with the purchase of 60% of the Banks shares by Societe Generale (SG) in September 2006.   These three factors, and in particular, an opportunity to support growth of lending to private SMEs in a frontier country such as Georgia through IFCs relationship with SG constitute the main rationale for this transaction.    The acquisition of a controlling stake in Bank Republic, one of Georgias leading banks, is in line with the development strategy of Societe Generales international retail business.  It is expected that SG will build on strategic efforts of BRs local shareholders in the past two years to develop retail lending in one of the most frontier countries of Eastern Europe. The expected development impact of this project is high, because of achieving the following objectives in a frontier country:  - Contribute to further development of one of the leading Georgian banks by assisting BR in meeting increasing demand for credit from SMEs.  BR plays an important role in terms of strengthening public confidence in the banking sector in general, providing financial intermediation in the Georgian economy and providing a role model for other banking institutions in the market. The importance of BR for Georgian banking sector increased after its acquisition by SG, since the latter is expected to bring to the Bank best international practices in product structuring and risk management. The partnership of Societe Generale and Bank Republic is expected to result in a transfer of SGs universal banking expertise and product know-how to Georgia. Combined with BRs well-known local brand, its strong domestic distribution channels, local expertise, and high-quality local management, this is likely to make Bank Republic a leading financial institution in Georgia and broaden access of Georgian companies, including SMEs, and individuals to high quality banking services and products. - Facilitate the development of the SME sector and subsequent job creation in the country by improving SME access to finance from a well-managed local bank supported by an international strategic investor.  - Support efforts of one of the leading Georgian banks to diversify and to increase the maturity of its liabilities and therefore, better manage its asset and liability position.