Page 35 - GEORptNov18

this stage of the economic cycle (while hiding potential threats). In fact, new, tighter regulations were enforced.
The stock of loans was pushed up as of the end of August by mortgage lending to households, with that accounting for a significant share of total loans: 32.7% at the end of August up from 29.3% one year earlier. In nominal terms, the stock of mortgage loans to households increased by 36.8% y/y (33.8% y/y real terms), well above the average.
A high growth rate was posted by the transport and communication sector. It saw growth of 84.6% y/y (nominal terms), and went from 1.5% of total loans 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.
Tighter Georgia lending regulations said to push down durable goods sales by 35%
Georgia helps banks monitor financial status of
Sales of durable goods in Georgia’s stores have dropped by 35% since new bank regulations were enforced in May, according to the country's Business Ombudsman Irakli Lekvinadze as cited by commersant.ge. Under the regulations, banks are required to extend a loan only after an outlined full analysis of the client's creditworthiness.
Lekvinadze reportedly said that active consultations were held with the central bank on the regulations prior to adjusting the technical details of the credit analysis. The current conditions imposed on debtors under the provision were too strict, Lekvinadze argued.
Commercial banks in Georgia are to have real-time access to the incomes of their retail clients from the revenues service, under regulations issued with the required information transfer system set in place by the government and the
35 GEORGIA Country Report November 2018 www.intellinews.com