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Georgian Banks’ Association: There are no Signs of a Banking Crisis in the Country

There are no signs of a banking crisis in the country. President  of the Association of Banks of Georgia  Zurab Gvasalia says that despite the drop in the exchange rate, there are no signs of the crisis.

He notes that proof of this  are non-bank deposits  increased by  almost 2.5 billion compared to the same period of last year.

According to the National Bank’s data, the banking sector decreased by 57% in January compared with January of 2014. As per the NBG data, the banking sector’s profits amounted to  GEL 15.8 million in January, while  in January 2014 – GEL 37 million.

NBG says that the profit of the banking sector increased by 183% (13,039 million) in January 2014 in comparison to the previous year. It should be noted that the sector’s profit for December 2014 totaled GEL 93.2 million.

Gvasalia says that in January this year  the banking sector’s revenues amounted to GEL 297 million that is  GEL 70 million or 30% more compared to January of  last year. In January 2013, the banking sector’s revenues amounted to GEL 181 million.

As for the net profit, Gvasalia explains that while the net profit figure  reduced from GEL 36 million to 15 million compared to last  January,  but compared to 2013 this figure grew by GEL   2 million.

In Gvasalia’s words,  interest income increased from  GEL 138 million to 163 million, as well as non-interest income from  GEL  88 million to 134 million, but costs have also increased. Non-interest expenses led to the decline in net profit. Gvasalia says that the net profit decline was mainly due to two factors:

Compared to last January, losses from the  conversion amounted to  GEL  8 million while in the previous year the figure was 10 million in profit.

Another important article, which lowered the rate of profit, is the damages from  the possible asset destruction, which compared to last year increased from GEL  17 million to 60 million, including in loans from GEL 51 million to 16 million.