Page 28 - GEORptFeb19

one year earlier to 2.2% at the end of August. The stock of loans to industry accounted for 11% of total loans after having increased by 22.7% y/y.
8.1.3 NPLs
8.1.4 Banks specific issues
Georgian banks have weathered the depreciation well, with non-performing loans (NPLs) at a manageable rate of 2.8% of total loan portfolio at end-2017 , compared with a ratio of 3.4% at end-2016, according to the National Bank of Georgia. NPLs account for around 3% of total lending. Banks are well capitalised and positioned to absorb a moderate deterioration in their loan portfolios, according to Fitch ratings agency.
Georgia’s TBC Bank claims “dark PR” as it fights laundering probe
Loans written off ‘without grounds’
Georgia’s London-listed TBC Bank is under investigation for “activities [that] clearly showed the characteristics of legalization of illegal income, i.e. money laundering, and other illicit acts”, according to a statement from the Office of the Prosecutor General (POG) of Georgia.
Largest Georgian lender TBC— included in the London Stock Exchange’s FTSE 250 Index since June 2017—responded to the announcement by saying it is the target of “dark PR” and a “deliberate attempt to discredit and tarnish its reputation”.
POG is probing events said to have occurred more than a decade ago. It said that in May 2008 two companies, Samgori Trade LLC and Samgori M LLC, received a loan worth $17mn from TBC, without the provision of any security and through an accelerated procedure. “As soon as the loaned funds were credited in the accounts of the companies, [TBC co-founder and chairman] Mamuka Khazaradze and [TBC co-founder and deputy chairman] Badri Japaridze borrowed the same amount which TBC Bank had lent to the aforementioned companies for the purpose of financing working capital,” POG added.
By the end of 2008, said POG, TBC wrote off the loans to the Samgori companies without any grounds and earlier than stipulated by banking regulations, prior to moving them to an external balance account and, in 2012, exempting the companies from liabilities owed when agreeing to transfer the liabilities to an offshore company. The offshore entity was said to have not yet
28 GEORGIA Country Report February 2019 www.intellinews.com