Page 39 - GEORptAug22

NPLs doubled compared to the previous year and accounted for 8.4% of the banking system’s loan portfolio. The NPL ratios increased by 4.8pp and 4.6pp in 2020 at the systemic banks, Bank of Georgia and TBC Bank, respectively. Their NPL ratios were 8.4% and 7.7% respectively.
According to the official classification in Georgia, "non-performing loans" are loans of "non-standard, doubtful and loss category".
8.1.5 Bank news
Russia bank VTB to leave Georgia
Fitch revises outlook on Terabank to negative noting higher risks in Georgia’s operating environment
The Russian bank VTB intends to leave Georgia, according to Andrey Kostin, chairman of the board of the bank, but will retain its presence in the banking markets of Azerbaijan, Armenia, Belarus, Kazakhstan, China and India. "With the exception of one single case, we do not sell any subsidiary banks, anywhere. We have a principled position, we have remained everywhere", he said in an interview with Interfax. While in other countries, the bank is discussing interaction with national banks.
“We are only leaving Georgia, but the situation there is somewhat different. But in Azerbaijan, Armenia, Belarus, Kazakhstan, China, and India, we remain and promote the issue of interaction with national banks, with local banks, in order to be the key bank for settlements in bilateral trade in national currencies. We see prospects for our business in these countries", he said.
VTB has subsidiaries or associated banks in Belarus, Armenia, Kazakhstan, Azerbaijan, Georgia, Germany, Italy, Great Britain, and Cyprus, and owns a 50% stake in the joint Russian-Vietnamese bank VRB and 50.1% in the Angolan Banco VTB Africa. The bank's branches also operate in China and India.
The bank announced the launch of money transfers in national currencies to neighbouring countries – Belarus, Kazakhstan, Armenia and Azerbaijan – in June. The maximum amount of a cross-border transfer by details to Belarus, Kazakhstan, Armenia and Azerbaijan complies with the requirements of the Central Bank of the Russian Federation and is RUB150,000 (or the equivalent in another foreign currency) per month, the commission is 1% of the transfer amount. Transfers are available to both individuals and legal entities.
Fitch Ratings has revised the Outlook on Terabank's Long-Term Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'B+' and Viability Rating (VR) at 'b+', with the Outlook revision primarily reflecting its view “that increased downside risks coming from the Georgian operating environment has reduced Terabank's rating headroom, given its limited franchise, focus on riskier customers and only moderate capital buffers”.
Fitch has withdrawn Terabank's Support Rating and Support Rating Floor as they are no longer relevant to the agency's coverage following the publication of its updated Bank Rating Criteria on 12 November 2021. In line with the updated criteria, it has assigned Terabank a Government Support Rating (GSR) of 'ns'.
Fitch said: “Terabank's 'B+' IDR is driven by the bank's standalone profile, as captured by its VR. The affirmation of the VR at 'b+' reflects the bank's reasonable financial metrics and moderate capital buffers. It also considers the bank's highly dollarised balance sheet and narrow, but growing franchise in the SME and micro-lending segments. Its Short-Term IDR of 'B' maps to the
39 GEORGIA Country Report August 2022 www.intellinews.com