Commercial banking lending increases in Georgia

Finance Materials 1 November 2019 19:19 (UTC +04:00)

BAKU, Azerbaijan, November 1

By Tamilla Mammadova – Trend:

Lending to the economy by commercial banks in Georgia increased by 550.2 million lari ($186.5 million) to 30.45 billion lari (over $1.0 billion) in September 2019, compared to August, Trend reports citing the report of the National Bank of Georgia (NBG).

According to the NBG report, the annual growth rate of the loan portfolio of commercial banks amounted to 21.2 percent.

Without the impact of the exchange rate, annual lending growth amounted to 13.2 percent.

The growth of the loan portfolio was influenced by the growth of loans in the national currency, said the bank.

Some 87.5 percent of the loan portfolio accounted for long-term loans, of which 57.3 percent were denominated in foreign currency. For short-term loans, the share of foreign currency loans amounted to 40.4 percent.

According to NBG, during the reporting period, loans in national currency increased by 430.6 million lari ($145.9 million) or 3.3 percent to 13.69 billion lari ($4.6 billion). At the same time, the volume of loans in foreign currency in September increased by $22.6 million or 0.4 percent compared with the previous month and amounted to $5.67 billion.

Some 58.9 percent of these loans were loans to legal entities, and 88.6 percent - long-term loans. The increase in lending in foreign currency is mainly due to the growth in lending to legal entities.

In addition, in September, overdue loans increased by 2.5 million lari ($847,537) to 494.6 million lari ($167.6 million). Their share in the loan portfolio of commercial banks amounted to 1.6 percent.

About 43.3 percent of overdue loans are denominated in national currency. During the reporting period, the dollarization level of the entire loan portfolio decreased by 0.6 percentage points to 55 percent.

(1 USD = 2.95 GEL on November 1)