Page 36 - GEORptNov19

8.1.1​ Earnings
Profits of Georgian banks down 10% y/y in H1
Georgia’s TBC Bank Group maintains rising profits in Q2 but profitability ratios weaken
In the first half of 2019, profits dropped for seven out of 15 commercial banks registered in Georgia and the aggregate net profit of the banking system decreased by 10% year on year to GEL361mn ($124mn), ​according to a report of the National Bank of Georgia. Some 96% of the profits was realised by the two largest banks: TBC Bank and Bank of Georgia.
According to consolidated statistics published by NBG, the total income of Georgian banks grew by 6.3% in the first six months of the year to GEL2.10bn, while expenses increased by 16.6% y/y to GEL 1.69bn.
According to reports, in the first two quarters of 2019 TBC Bank had the highest profit, GEL153.05, during the reporting period. It was followed by Bank of Georgia, which reported a net profit of GEL148.45bn.
Georgia’s TBC Bank Group has reported a second-quarter unadjusted net profit of GEL120.2mn ($41.4mn), up 17.3% y/y. Adjusted for one-off costs, the Q2 bottom line increased by 4.3% y/y to GEL125.0mn.
In the whole H1 period, the bank accumulated a net profit of GEL253.5mn, a gain of 26.8% y/y. In adjusted terms, the net profit rose 18.8% y/y to GEL258.3mn.
Total assets of the group—which includes major Georgian lender TBC Bank—amounted to GEL 17.28bn ($5.96bn) as of the end of June, up 27.2%y/y.
The adjusted return on equity (ROE) amounted to 21.5% in Q2, down from 24.9% in the same period a year earlier. The unadjusted return on equity amounted to 20.7%, compared to 21.3% a year ago.
Loans & advances to customers made in the first half rose 11% to GEL 582.9mn from GEL 526.4mn the year before.
The lender's net interest margin in the half worsened to 5.8% compared to 7.0% the year before.
"The pressure on net interest income was related to a continued impact of the regulation implemented in January 2019, that limits the ability of banks to lend money to higher-yield retail customers, an increase in minimum reserve requirements for foreign currency funds, as well as competition in interest rates," the lender explained in a press release.
36​ GEORGIA Country Report​ November 2019 ​ ​www.intellinews.com