Page 36 - Small Stans and Causcasus Outlook 2022

3.1.2 Banks

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).

When expressed in US dollars, the banks’ assets rose by 13% y/y and
the loans by 17% y/y.

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.

Thus, the bank loan portfolio at the end of October 2021 accounts for
76.7% of GDP – calculated based on the latest four-quarter GDP
available (end-June). Calculated under the same methodology for
comparability, the loan-to-GDP ratio was 74.0% in October 2020 and
66.6% in October 2019. The ratio was only 31.6% 10 years ago in
October 2011.

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