Page 47 - GEORptSep21

At the end of April, the annual growth of loans, filtering out the exchange rate effect, was 9.8% y/y - largely due to corporate lending - and the ratio of loans to GDP outperformed the long-term trend, reflecting the effects of high credit growth and exchange rates in previous periods, NBG conceded. The ratio of loans to GDP has outperformed the long-term trend since the end of 2018, according to the central bank's chart included in the statement.
However, the national lender argued that the growth of the loan portfolio this year should be commensurate with nominal economic growth. Consequently, there would be no need to activate countercyclical macroprudential instruments during this period, the central bank concluded.
NBG anticipated that the country’s banking system would end with significant profits this year.
If the current profit trend from the beginning of the year continued, banks would be expected to end up with solid profits in 2021, NBG said. Increased profitability would be helped by robust lending activity and low reserve requirements.
It is noteworthy that currently, 10% of the loan portfolio is still under a repayment moratorium.
The assessment of asset quality continues, although a material increase in the rate of non-performing loans (NPLs) was not expected.
In the first four months of 2021, the Georgian banking system generated a net profit of GEL584mn ($175mn). The data submitted to the NBG showed that the profitability of the banking system improved in January-April. The highest net profit, GEL173mn, was recorded in April.
8.1.5 Bank news
Bank of Georgia publishes Q2 financials
Bank of Georgia has published its Q2 2021 financials. The lender, Georgia's second largest after TBC, previously swung back to profit in Q1.
Bank of Georgia announced that it has reinstated its dividend, declaring an interim dividend of GEL 1.48 per share, implying an annualised dividend yield of 4.6%. The bank said it will update its dividend policy later this year.
Net income totalled GEL 202mn in Q2 2021, up 76% y/y and 46% q/q, with 29.4% ROE, bringing H1 2021 earnings to GEL 341mn with 25.4% ROE. Core revenues were very strong, said analysts, with pre-provision operating income up 10% q/q in 2Q21. NII rose 30% y/y and 7% q/q, with NIM up about
47 GEORGIA Country Report September 2021 www.intellinews.com