Page 28 - GEORptMar19

8.0 Financial & capital markets
Georgia - Commercial banks lead Jan-Dec’ Sep-18 Jun-18 Mar-18 Dec- 2017 Dec-2016 indicators (as of) 18
Interest income (GEL mn)
296.86 278.43 274.15 269.49 275.70 227.44
Net profit / loss (GEL mn)
914.72 602.34 410.4 234.2 869.80 679.11
Bank assets (GEL mn)
39,682.98 37,782.32 35,665.08 34,272.35 34,593.50 30,149.32
Bank deposits (GEL mn)
18,273.92 16,698.19 15,563.09 15,346.53 15,717.54 13,662.0
Bank loans (GEL mn)
25,473.45 23,700.85 22,388.53 21,708.98 21,761.90 18,512.30
ROA (%)
3.0% 2.7% 3.0% 3.0% 3.1% 3.1%
ROE (%)
23.3% 21.2% 22.6% 22.6% 23.3% 22.1%
CAR (%)
18.4% 17.6% 18.9% 19.0% 19.1% 15.1%
NPL (%)
2.7% 2.7% 2.4% 2.4% 2.8% 3.4%
Source: National Bank of Georgia
8.1 Bank sector overview 8.1.1 Earnings
Georgian banks’ achieve high profitability in 2018
The aggregate net profits of Georgia’s banks rose by 5.3% y/y to GEL915mn (€340mn) in 2018, resulting in a return on assets (ROA) ratio of 2.5% and a return on equity (ROE) ratio of 20%, according to central banks reports.
The banks’ incomes increased by 16.4% y/y to GEL4.2bn driven by a 19% rise in interest incomes to GEL3.29bn. Expenses rose as well, moving up by 17.4% y/y to GEL3.06bn.
Provisions for asset losses climbed 45% y/y to a still moderate level of GEL396mn. Provisions for loan losses surged by 87% y/y to GEL377mn.
The Georgian banking sector is dominated by TBC Bank and Bank of Georgia, two lenders that are listed on the London Stock Exchange and that, together, account for two thirds of total banking assets. In total, 16 commercial banks operate in the country, after TBC Bank merged with Bank Republic, the country's fifth largest lender, last October. The sector has performed well in recent years, but financial services penetration in the market remains modest.
Georgian banks constantly posted rising profits from 2010 to 2017, following the losses incurred in 2009. But their profitability stagnated in 2017 and the lenders have struggled in 2018.
28 GEORGIA Country Report March 2019 www.intellinews.com