Page 41 - GEORptNov20

Georgian insurers’ profit ‘up 23% in first half to GEL83.5mn’
EIB extends €60mn credit line to Bank of Georgia
o The penetration ratio for mobile banking9 stood at 45% for 2Q 2020 (2Q 2019: 39%)
For the first half 2020, TBC Bank said its financial results were affected by the following non-recurring charges related to the COVID-19 pandemic:
o a net modification loss of financial instruments, in the amount of GEL 34.2 million (out of which GEL 30.6 million was accounted for in the first quarter and GEL 3.5 million in the second quarter) to reflect the decrease in the present value of cash-flows resulting from the loan repayment grace periods granted to borrowers; and
o an extra credit loss allowance booked in the first quarter, in the amount of GEL 215.7 million (or GEL 210.9 million for loans), to prepare for the potential impact of the COVID-19 pandemic on our borrowers. In the second quarter, we also created additional GEL 9.0 million COVID-19 related credit loss allowances for loans in our Azeri subsidiary, TBC Kredit. These charges resulted in additional COVID-19 related, not annualized cost of risk in the amount of 1.7% in 2Q and 1H 2020.
o Without the above mentioned COVID-19 related charges, ROE and ROA amounted to 19.6% and 2.8% respectively in 2Q 2020, while in 1H 2020, ROE and ROA stood at 21.2% and 3.0% respectively.
The total profit of Georgian insurers amounted to Georgian lari (GEL) 89.5mn(€26.1mn) in the first half of this year, marking a 23% y/y gain, primm.com ​reported​ on August 25 citing a ​Business Georgia ​report. Net profit of the insurance companies was reportedly up 49% y/y, reaching GEL29.2mn. Total assets of Georgia’s insurance sector at the end of the six months were given as GEL976.7mn and total equity as GEL273.9mn.
In terms of the structure of gross written premiums (GWP), health insurance continues were said to lead the market portfolio with 45% of all GWP, while 16% was in transport insurance, another 16% in property insurance, 7% in life insurance, 5% in civil liability insurance of vehicle owners, 4% in general third party liability and 7% in other insurance types.
The European Investment Bank Group and the Bank of Georgia (BoG) have signed an agreement to supply a €60mn credit line for loans to small and medium-sized enterprises (SMEs).
The sum will improve access to finance for over 100 businesses, particularly those which are affected by the coronavirus (COVID-19) crisis.
50% of every loan disbursed by the BoG that targets SMEs and mid-caps that require investment and working capital to finance research, development and innovation activities are covered by the InnovFin Guarantee, the EIB announced.
The InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing between €25 000 and €7.5mn, in order to improve access to loan finance for innovative SMEs and small mid-caps (up to 499 employees). This facility is being rolled out through financial intermediaries, which are guaranteed or counter-guaranteed against a portion of their potential losses by the European Investment Fund (EIF).
Moreover, as a response to the coronavirus crisis, the guarantee also covers 80% of loans provided by the BoG to SMEs and mid-caps impacted by the coronavirus crisis for their working capital needs.
This operation is covered by the EU4Business Initiative.
“Addressing the economic well-being of smaller innovative businesses is a key element of the EIB Group's response to the COVID-19 crisis,” said EIB vice-president Lilyana Pavlova.
41​ GEORGIA Country Report ​November 2020 ​ ​www.intellinews.com