Georgian banks net profit on upward trend
Friday, September 19Georgia’s banking sector finished the first seven months of 2014 on a positive note with a net profit of 214.9 million GEL. This was a continuation of banks’ remarkable growth this year due to recently implemented economic reforms, foreign investments and aggressive lending, say experts.
Policy and Management Consulting Group’s (PMCG) Banking Sector July, 2014 report stated commercial banks’ net profit witnessed an 11.6 percent increase.
Based on data from state statistics office Geostat and National Bank of Georgia, the volume of deposits’ stocks increased by 19.1 percent and constituted 10.95 million GEL.
By August, funds deposited in national currency (GEL) increased 20 percent and foreign currency increased by 17.9 percent.
The share of funds deposited in foreign currency (60.9%) still exceeded the share of deposits made in the Georgian national currency (GEL) (39.1%).
However despite the positive figures, the share of deposits made in foreign currency recorded a decreasing trend and as of July 2014, figures were lower (-0.6% points) than in July 2013.
"This fact indicates reduction of lev¬el of dollarization, which is due to the policy implemented by National Bank’s policies, including an approval of Commercial Banks’ standard certificate of de¬posits and an extension of the base of mortgage, which is used for operations with National Bank,” PMCG said.
In July 2014, the interest rate on deposits decreased by -0.4 percentage points compared to July 2013 and equaled 6.1 percent.
Banks Loan Portfolio
According to PMCG, the volume of lending by commercial banks by August 2014 had increased by 10.816 million GEL (23.2 percent).
In the reported period, 50.8 percent of loans granted by commercial banks to the total economy were loans in various sectors of the economy. Among them the largest loans went to the trade sector (31.1%) and manufacturing (22.7%) sector. (Agenda.ge)