Silk Road Bank Ended 5 Months with a Loss of ₾1.5 Million

The dollarization of deposits at Silk Road Bank has increased. As of June 1, GEL 14.6 million is in the non-bank deposit portfolio of GEL 7.4 million in foreign currency. The dollarization rate is 50%.

The reserve requirement is determined by this ratio. If the larization is high (> 60%) the reserve norm for the bank in foreign currency attracted funds is reduced from 25% to 10%.

This is offset by a reduction in the currency credit risk buffer. Silk Road Bank has foreign currency loans equivalent to GEL 5.4 million in a portfolio of GEL 15.5 million, thus reducing the capital requirement. (With up to 40% dollarization, the weight of risk equals 40%, with each additional 1% P requiring 3% more capital).

The bank ended 5 months of 2022 with a loss of 1.6 million GEL.