A topic of possession of non-core assets by commercial banks is relevant not only in Georgia, but also in many other countries.
The World Bank (WB) conducted a study of bank management and supervision of the banking system in 2012, and one of its themes was devoted to non-core assets.
According to a survey, in 63 out of 137 surveyed countries commercial banks have the right to possession of securities – we are talking about the right to conduct the full spectrum of activities in this area.
In 46 countries, banks have the right to ownership of shares, but only through subsidiaries or companies belonging to a single holding.
In 17 countries, ownership of securities is limited, and some activities associated with the shares are allowed through subsidiaries or members of holding company.
In nine countries, banks are completely banned to own non-core assets, including through subsidiaries or members of holding company.
With regard to insurance companies , in 7 countries out of 137 banks have an unlimited right to conduct activities in the insurance business, in 72 they are allowed under certain conditions, in 36 – the activities are severely restricted, in 22 – prohibited.
Banks are allowed to work in real estate without any conditions in 20 countries, in 29 their activities are allowed with certain conditions, in 35 countries- limited and in 50 countries – are prohibited.
The statistics indicate that in most countries, commercial banks are allowed to operate in the securities market, participation in the insurance business is permitted under certain conditions while activities in the construction business are prohibited.
“Citibank” founded in New York in 1812 (now has branches in 160 countries and serves 200 million clients) owns large non-core assets – GAAP shares in the amount of USD 156 billion, OneMain Financial (USD 10 billion) , MSSB JV (USD 8 billion.), etc.
In 2014, German “Deutsche Bank” sold “Cosmopolitan” hotel in Las Vegas to “Blackstone Group” company for USD 1, 7 billion, which was bought by the bank in 2008. In 2013, the German bank made investment Maher Terminals), BHF-Bank, etc.