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National Bank of Georgia Evaluates Current Conditions of Banking Sector

The National Bank of Georgia evaluates current conditions of Banking sector in Georgia, three reports show conditions of commercial banks’ assets, loans and deposits.

Current Condition Of Commercial Banks’ Assets

As Of February 1, 2016, The Banking Sector In Georgia Is Represented By 19 Commercial Banks, Including 17 Foreign-Controlled Banks And One Branch Of Non-Resident Banks.

In January 2016, Compared To The Previous Month, The Total Assets Of Georgian Commercial Banks Increased (In Current Prices) By 0.2 Billion GEL (Or By 0.7 Percent) And Constituted 25.3 Billion GEL (Exchange Rate Effect Excluded Above Mentioned Indicator Decreased By 1.2 Percent). The Banking Sector’s Own Funds (Equity Capital) Equal 3.5 Billion GEL, Which Makes Up 13.9 Percent Of The Commercial Banks’ Total Assets.

Current Condition Of Commercial Banks’ Loan Portfolio

The volume of lending by commercial banks (including loans to non-residents) in January 2016 increased by 176.1 million GEL or by 1.1 percent compared to the previous month (exchange rate effect excluded volume of lending decreased by 1.0 percent) and constituted 16.2 billion GEL by February 1, 2016.

The volume of loans in the national currency decreased by 129.6 million GEL (2.3 percent) and the volume of loans in foreign currencies increased by 305.7 million GEL or by 3.0 percent in the same period (as a result of operations, or exchange rate effect excluded, above mentioned indicator decreased by 0.3 percent).

By the end of January 2016, commercial banks issued 1.6 billion GEL worth of national currency-denominated loans (6.4 percent less compared to the previous month), and 5.2 billion GEL worth of foreign currency denominated loans (5.4 percent less) to resident legal entities (exchange rate effect excluded volume of lending in the foreign currency decreased by 8.5 percent). During January 2016 the volume of lending to resident individuals increased by 1.6 percent or 128.7 million GEL, and constituted 8.1 billion GEL by February 1, 2016.

Larization ratio for total loans constituted 34.23 percent by February 1 2016. Compared to January 1, 2016 exchange rate effect excluded larization ratio decreased by 0.47 percentage point.

Current Tendencies Of Bank Deposits

The total volume of non-bank deposits in the country’s banking sector increased by 1.4 percent (exchange rate effect excluded volume of deposits decreased by 0.9 percent), or by 198.7 million GEL, compared to January 1, 2016 and exceeded 14.5 billion GEL by February 1, 2016.

In January, the volume of term deposits increased by 323.0 million GEL (4.0 percent; exchange rate effect excluded volume of term deposits increased by 1.4 percent).

Demand deposits decreased by 124.3 million GEL (2.0 percent; exchange rate effect excluded volume of demand deposits decreased by 3.7 percent). The larization ratio of total non-bank deposits constituted 28.66 percent by February 1, 2016; It decreased by 1.87 percentage point (decreased by 1.22 percentage point exchange rate effect excluded) compared to January 1, 2016.

The annual average weighted interest rate on term deposits constituted 5.2 percent. In particular, the interest rate for national currency denominated deposits was 10.8 percent and the interest rate for foreign currency denominated deposits 3.8 percent.

The share of the US dollar in the total volume of foreign currency denominated deposits equals 81.2 percent and the share of the Euro equals 16.4 percent.