Page 43 - GEORptJul22

8.1.4 NPLs
NPL ratio for Georgia’s banks doubles during 2020 to 8.4%
The Financial Stability Committee of the National Bank of Georgia (NBG) has announced that, against the background of the crisis of 2020, the volume of non-performing loans (NPLs) in the country has doubled compared to the previous year and accounts for 8.4% of the banking system’s loan portfolio.
According to NBG forecast, the NPL ratio in the banking system is expected to reach 10% in the first half of 2021.
Silk Road bank also posts a high NPL ratio of 26.7% after a 7.2pp rise over the past 12 months.
As for the highest annual growth, Pasha Bank and Silk Road Bank are the first place with the annual rise of their NPL ratios at 7.2pp.
The NPL ratios have 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
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.
The bank’s majority shareholder is the Russian Federation, which owns 60.93% of the bank’s ordinary shares through the Federal Agency for State Property Management. The Ministry of Finance of the Russian Federation holds 100% of Type 1 preference shares, and the Deposit Insurance Agency
43 GEORGIA Country Report July 2022 www.intellinews.com