Page 24 - Caucasus Outlook 2025

5.1.2 Banks
Georgia’s banking system is stable, with banks demonstrating strong capitalisation levels and maintaining adequate liquidity buffers. The country's banking regulations are effective and "largely consistent with international standards, featuring solid corporate governance and commendable transparency," according to a report by Standard & Poor’s (S&P).
The banking sector is dominated by two major players: TBC Bank and Bank of Georgia. Together, these banks control approximately 35-40% of the market.
TBC Bank Group reported record-breaking profits in Q3 2024, with a net profit of GEL347mn ($128mn), marking a 16% y/y increase. The bank achieved an impressive return on equity (ROE) of 26.6%. For the first nine months of 2024, the group reported a total profit of GEL973mn, up by 15% y/y, with an ROE of 26.2%.
CEO Vakhtang Butskhrikidze attributed this success to robust economic growth in Georgia and the rapid expansion of TBC’s digital banking ecosystem in Uzbekistan, which played a pivotal role in the group’s performance.
The latest results from Bank of Georgia Group PLC show the group achieved a record 3Q24 profit of GEL509.3mn and 9M24 adjusted consolidated profit of GEL1,308.3mn. Return on average equity stood at 32.1%.
Among the other banks active in Georgia, Pasha Bank Georgia, a subsidiary of Azerbaijan’s Pasha Holding, has undertaken significant restructuring in 2024 to refocus on corporate banking. The bank exited retail banking by selling its retail loan portfolio, closing branches, and reducing its workforce. This strategic shift is aimed at doubling its corporate loan portfolio within 30 months.
In 2024, the National Bank of Georgia introduced stricter regulations for foreign currency loans as part of its strategy to reduce dollarisation in the economy. Starting in May, individuals earning less than GEL400,000 annually in foreign currency are no longer eligible for foreign currency loans.
While the regulation aims to mitigate risks associated with exchange rate volatility and variable interest rates, critics argue it limits borrowing options. Loans in Georgian lari (GEL) typically come with higher interest rates – averaging 15.42% in February 2024, compared with 8.57% for foreign currency loans. However, the Central Bank maintains that reducing reliance on foreign currency loans is essential for long-term financial stability, particularly given the uncertainties in regional currencies and global markets.
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