Page 32 - GEORptJul19

The goal of the programme is to support SMEs which either operate in sectors where loan issuance is restricted or do not have enough property to secure a loan. Entrepreneurs with an average turnover over the past three years of below GEL20mn and loan liabilities of not more than GEL8mn are eligible for the programme.
The credit guarantees will be issued only on loans taken out in Georgian lari. The maximum period of a guarantee will be 10 years.
The minimum loan amount is GEL50,000 and the maximum is GEL2mn.
8.1.6 Bank news
Bank of Georgia’s earnings rise 10% y/y boosted by lending in robust economy
Earnings at Georgia’s TBC Bank up 37% y/y in Q1
ADB extends loan to Georgia to spur mortgage lending in rural areas
One of Georgia’s two largest lenders, London-listed Bank of Georgia, on May 14 announced that its first-quarter adjusted earnings rose by 10.4% y/y as lending advanced supported by a robust economy. However, the bank’s net interest margin shrunk as new rules hit unsecured consumer lending.
The bank said adjusted net profit rose to GEL112.2mn (€36.7mn) in Q1, up from GEL101.7mn reported a year earlier. Reported profit, edged up by only 0.3%, hit by one-off costs related to executive terminations.
Bank of Georgia’s net interest margin dropped to 5.8% from 7% due to a sharper focus on lending in the mortgage segment and to lower-margin corporate and small and medium sized enterprise clients on the back of tighter rules applied to unsecured consumer lending.
In comparison, Georgia’s biggest retail lender and Bank of Georgia’s main rival TBC Bank Group the previous day reported a surge in first-quarter profit by 36.7% y/y to GEL133.3mn (EUR43.4mn), helped by a strong loan book.
FTSE-250-listed TBC, which serves retail, corporate and small and medium-sized enterprise customers across the country, said gross loans and advances to customers rose 22.9% to GEL10.37bn (€3.37bn) from last year. TBC’s net interest margin (NIM), seen as the main indicator of a bank’s financial strength, dropped to 6.1% from 6.9%, with new regulations restricting its ability to lend to higher-yield retail customers.
Economic growth in Georgia, a former Soviet republic, slowed in the first quarter, but jumped 6% in March.
After becoming Georgia’s biggest retail lender following its purchase of JSC Bank Republic a few years ago, TBC now has roughly 2.4mm customers and around 7,300 employees.
Georgian lender Credo Bank and the Asian Development Bank (ADB) on April 17 announced t hat they have signed a GEL60mn (€20mn) loan agreement aimed at helping the local bank extend long-term financing in local currency to support low-income customers in home purchase, renovation and construction in rural areas and on the outskirts of Georgia’s capital, Tbilisi.
Associated technical assistance will suport Credo Bank’s efforts to extend the reach of its branchless banking services to rural clients, with a specific focus on improving financial and business literacy as well as access to finance for women.
The loan is provided in Georgian lari supporting Georgia’s strategy to increase the use of local currency and reduce the foreign currency-induced credit risks of loan beneficiaries and banks.
32 GEORGIA Country Report July 2019 www.intellinews.com