BAKU, Azerbaijan, May 16
Tamilla Mammadova – Trend:
Against the background of the economic crisis of 2020, restrictions, and depreciation of the lari, the share of non-performing loans in the banking system of Georgia doubled and amounted to 8.4 percent, Trend reports via the National Bank of Georgia.
At the same time, banks signed restructuring agreements with clients to further protect their existing loan portfolio.
If by the end of 2019, 5 percent of loans in the banking system were restructured, then by the end of 2020 this figure increased to 20 percent, which means the restructuring of 7.6 billion lari ($2.2 billion) out of 38 billion lari ($11.1 billion) of the loan portfolio in the banking system.
According to the National Bank of Georgia, in 2021 the share of non-performing loans in the banking system will reach 10 percent.
By the end of 2020, non-performing loans accounted for 8.4 percent of total loans, or 3.2 billion lari ($936.1 million). The greatest risk in this regard is in the segment of foreign currency loans.
“It is also noteworthy that the share of foreign currency loans was especially high in vulnerable sectors that were most affected by the economic shock of COVID-19,” the National Bank said in a statement.
At the same time, according to the document, the dollarization of loans in certain segments is almost 100 percent, which increases the risks of turning them into non-performing loans against the background of the depreciation of the lari:
1. Real estate development - loans in foreign currency 94 percent;
2. Real estate management - loans in foreign currency 89 percent;
3. Hotels and tourism - credit in foreign currency 88 percent;
4. Restaurants, bars, cafes and fast food outlets - loan in foreign currency 85 percent;
5. Car dealerships - loan in foreign currency 57 percent.
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