Page 35 - GEORptAug20

remittances) would result in the deterioration of Georgian banks' asset quality, earnings and capitalisation.
8.1.1​ Earnings
Georgian banks post Q1 losses after making COVID-19 provisions
The 15 commercial banks operating in Georgia lost a total of Georgian lari (GEL) 747mn ($233mn) in the first quarter, according to financial statements submitted by the lenders to the country’s central bank.
The Georgian banking system's aggregate profit before reserves was GEL355mn ($110mn), or 0.71% of aggregate assets, resulting in a robust annualised return on assets of 2.8%.
The main reason for the recorded loss was the banks' designated reserves for possible losses due to the economic impact of the coronavirus (COVID-19) pandemic. In total, the commercial banks placed GEL1.22bn in the "possible losses of assets" buffer, reflecting the size of possible losses on loans due to the ongoing crisis. Prior to the provisioning, 14 of the 15 banks were in profit.
According to the financial statements, in the first quarter the largest net loss was recorded by TBC Bank. It amounted to GEL277.4mn. Its profit before the reserve was created, however, was GEL149.9mn. Bank of Georgia was in second place in the net loss column, posting GEL276mn, alongside a profit before the formation of the reserve of GEL135.7mn.
As for the banks' asset sizes, in this regard TBC Bank was also in first place, with assets exceeding GEL19.2bn. Bank of Georgia was second with GEL17.9bn in assets and Liberty Bank was third with GEL2bn in assets.
35​ GEORGIA Country Report ​August 2020 ​ ​www.intellinews.com