Page 40 - GEORptDec21

assets for each year, as the assets at the end of October will be released on November 25.
8.1.2 Loans
Georgian loan and deposit growth accelerated in October
Georgian banks’ loan portfolios grow by 15% y/y at end October
Loan and deposit growth in Georgia’s banking sector accelerated in October, reported Georgian brokerage Galt & Taggart in a November 29 weekly market watch update.
In October, the banking sector loan portfolio growth was 16.1% y/y (+1.1% m/m), excluding FX effects, after a 15.8% y/y growth in the previous month. In unadjusted terms, the loan portfolio was up 14.7% y/y (+1.7% m/m), amounting to GEL41.7bn ($13.2bn). By sector, corporate loan growth slowed slightly to 16.5% y/y (excluding FX effects) in October, from a 16.9% y/y growth in the previous month, while retail loan growth accelerated to 15.7% y/y from 14.8% y/y in the previous month. In October, loan dollarization came in at 51.3% (-4.37pp y/y and -0.09pp m/m) and non-performing loans (NPLs) stood at 2.1% (-0.21pp y/y and -0.05pp m/m).
Bank deposit growth accelerated to 14.2% y/y (+0.6% m/m, excluding FX effects) to GEL36.4bn ($11.5bn) in October, from 12.7% y/y in the previous month. By currency, GEL deposits were up 17.0% y/y and FX deposits increased 12.4% y/y (excluding FX effects) in October. The deposit dollarisation stood at 60.8% (-1.46pp y/y and +0.05pp m/m).
Georgia’s banking system, dominated by TBC and Bank of Georgia, has expanded the volume of its aggregate assets by 11% y/y to GEL59.6bn ($18.86bn) at the end of October, driven by the robust 15% y/y advance of the loan portfolio to GEL41.7bn ($13.19bn), according to data provided by the National Bank of Georgia (NBG).
A broader picture shows that the expansion of the country’s banking system’s over the past decade has not been correlated with (or has not supported) similar expansion in the real sector. The robust wage remittances (reflecting Georgians’ economic activity abroad) and certain improvements in the country’s foreign trade have fuelled the banking system’s expansion.
When expressed in US dollars, the banks’ assets rose by 13% y/y and the loans by 17% y/y.
40 GEORGIA Country Report December 2021 www.intellinews.com