Page 31 - GEORptApr20

8.0​ Financial & capital markets
Georgia - Commercial banks lead As of Feb 2019 2018 2017 2016 indicators (end of period) 2020
Interest income (GEL mn)
307.37 339.9 296.86 275.70 227.44
Net profit / loss (GEL mn)
196.06 953.64 914.72 869.80 679.11
Bank assets (GEL mn)
46,235.35 47,183.37 39,682.98 34,593.50 30,149.32
Bank deposits (GEL mn)
20,511.39 21,390.76 18,273.92 15,717.54 13,662.0
Bank loans (GEL mn)
30,845.21 31,078.64 25,918.14 21,761.90 18,512.30
ROA (%)
/ 2.5% 3.0% 3.1% 3.1%
ROE (%)
/ 20.3% 23.3% 23.3% 22.1%
CAR (%)
/ 19.0% 18.4% 19.1% 15.1%
NPL to total gross loans (%)
/ 2.6% 2.6% 2.8% 3.4%
Source: National Bank of Georgia
8.1​ Bank sector overview
Georgia starts talks with IMF as currency slumps
The monetary board of the National Bank of Georgia (NBG) on March 18 kept its refinancing rate​ ​at 9%, but the central bank’s president Koba Gvenetadze announced at the same time that the national lender has already​ ​entered into talks​ w​ ith the International Monetary Fund (IMF) to obtain financial aid in the context of imminent balance of payments (BoP) problems resulting from an extreme weakening of the Georgian lari (GEL).
According to Gvenetadze, discussions with international donors had begun and the size of the assistance and other details would be announced later. The NBG stood ready to use all instruments, including sales of foreign currency reserves, to support the national currency, he said.
Finance minister Ivane Machavariani said there were now fundamental threats to the exchange rate in a world roiled by the coronavirus (COVID-19) pandemic.
"The biggest hit in the world will be the tourism and related sectors. In this regard, Georgia is relatively vulnerable as these sectors are the driving force of our economy. In addition, the collapse of global oil prices is a very negative factor for us [since oil transit fees are also dropping]," Machavariani said.
Annual inflation in Georgia in February stood at 6.4% y/y, up 2.3% y/y but in line with what was seen in January. However, the worst is still to come for the country’s economic fundamentals. The GEL has plunged by double digits in a matter of weeks and similar episodes last year indicate that investor and public sentiment can hardly be stabilised.
31​ GEORGIA Country Report ​April 2020 ​ ​www.intellinews.com