Banking sector assets to GDP ratio in Georgia reaches all-time high

Business Materials 16 September 2019 16:58 (UTC +04:00)

Baku, Azerbaijan, September 16

By Tamilla Mammadova – Trend:

The banking sector assets to GDP ratio in Georgia reached an all-time high at close of 96 percent in January 2019, Trend reports via the report of European Investment Bank (EIB).

The banking sector’s loan and deposit portfolios in Georgia have followed a somewhat similar trend. However, the gap between the two has been slowly increasing. They stood at 64 percent and 56 percent of GDP in January 2019, respectively.

Overall, the increasing gap between the loan and deposit stock points to an increase in the leverage of the banking sector, representing a loan to deposit ratio (LTD) of around 110 percent. The expansion in financial activity reflects a favorable economic environment in Georgia. Credit growth reached almost 20 percent year-on-year in 2018 (18 percent for enterprises and 20 percent for households).

Looking at loan distribution across economic sectors, agriculture (4.9 percent), real estate management (4.6 percent) and services (4.4 percent). Additionally, the construction sector (including construction companies and materials) also accounts for a significant share of the total.

Loans to hotels and the tourism sector have grown quite significantly over the recent past. Now, this segment stands at 4.2 percent of total loans. This is another reflection of the increasing importance of the tourism sector in total value added.

In January 2019, there were 34 registered companies at the Georgian Stock Exchange. About 14 companies were listed and 20 were admitted for trading. There are 38 securities, of which 18 are either A or B listings, two are listed equity securities and 20 are securities admitted for trading.