Page 37 - Small Stans and Causcasus Outlook 2022

The aggregated net profit of Georgia’s banking system in
January-October rose by 38% compared to the same period in 2019 (a
comparison aimed at filtering out the base effects caused by the costly
provisioning that took place in 2020), to GEL 1.76bn ($567mn).

In the same period of 2020, the banks reported GEL85mn in net losses,
caused by the mandatory provisions set aside for the expected
deterioration in the quality of their loans.

Since then, part of the provisions was released – which contributed to
the robust profits in 2021. The increase in the profit marked in 2021
was thus partly an effect of the one-off financial incomes, just as
previous year’s losses reflected the build-up of provisions. Overall,
Georgian banks’ profitability remains robust and apparently not touched
by the crisis.

3.1.3 Industry

Georgia’s manufacturing sector is highly concentrated and severely
underdeveloped compared to its potential, with the production of food
and beverages accounting for nearly half of the total production value
(45% in 2020 and 2019). The production of construction materials,
basic metals and metallic constructions account for another 30% –

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