Issue 78: Banking Sector – 2016, I-II Quarters

12.08.2016

 













Banking Sector – 2016, I-II Quarters

Issue  #78 / 12.08.2016

 

In June 2016 compared to the corresponding period in 2015:

• The volume of deposits (13.5%) and the volume of loans (11.2%) increased.
• Taking the effect of exchange rate into consideration, the volume of deposits increased by 10.4% while the volume of loans increased by 8.2%.
• There was a significant growth in the number of loans in construction (41.9%) as well as in the industrial sector (11.2%).
• The average annual interest rate on deposits (-0.4 percentage point) as well as on loans (-1.5 percentage point) decreased.
• The volume of non-performing loans increased by 8.4%.

 

             1

Source: National Bank of Georgia

 

 

In June 2016, the volume of total deposits, excluding interbank deposits, amounted to 15.6 mln GEL, which exceeds the indicator of 2015 by 13.5%. The volume of deposits denominated in the national currency increased by 4.8%, while the volume of deposits denominated in foreign currencies increased by 18.1%. However, taking exchange rates into consideration, the growth rate of deposits denominated in foreign currencies was actually only 13.4%.

In June 2016, the average interest rate on the deposits is 4.8% which is less than the corresponding indicator in 2015 by 0.4%. Average interest rates denominated in foreign currencies is 3.3%, which is lower (-1.2%) than the same indicator of the previous year. In this period, the average interest rate on the deposits denominated in the national currency increased (0.7%) and equalled 8.4%.

 

 

In June 2016, the volume of loans issued by commercial banks (excluding interbank loans) reached 16.5 mln GEL, which exceeds the corresponding indicator in 2014 by 11.2%. Here, the volume of loans denominated in the national currency increased by 5.7%, while the volume of the loans denominated in foreign currencies increased by 14.3%. However, taking exchange rates into consideration, the growth rate of the loans denominated in foreign currencies was actually only 9.7%.

In June 2016, the average interest rate on the loans reduced and equals 13.5%. In the same month of this year, loans denominated in foreign currencies was 9.2%, which is 2.3% lower than the indicator of 2015. On the other hand, the average interest rate on loans denominated in the national currency increased by 0.8% and equalled 19.2%.

 

 

 

 2

Source: National Bank of Georgia

3
Source: National Bank of Georgia   

 

 

 

 

 

 

 

In June 2016, the largest sectors by volume of loans to the economy are trade (12.5%), industry (11.0%) and construction (4.1%).

In this period, compared to June 2015, the volume of loans to the construction sector (41.9%; 199.1 mln GEL) and to industry (11.9%; 194.5 mln GEL) increased significantly, while loans declined to trade (-11.3%; 194.0 mln GEL).

    

 

 

In June 2016, the number of loans secured by real estate (53.5%) and consumer loans (29.4%) make up the largest share of household loans.

Overall, 79.4% of the consumer loans are denominated in the national currency, while 20.6% of this indicator are denominated in foreign currency. Loans secured by real estate have a different structure, with 84.3% denominated in foreign currencies, and 15.7% denominated in the national currency.

In June 2016, the volume of consumer loans increased by 1.8% while the volume of loans secured by real estate increased by 25.4%.

 

 4

Source: National Bank of Georgia

 5

Source: National Bank of Georgia

 

 

 

 

The quality of the credit portfolio of a commercial bank is determined by its share of non-performing loans and overdue loans in the total loans.

In June 2016, the volume of the non-performing loans increased by 8.4% (103.5 mln GEL) compared to the previous year and amounted to 1340.9 mln GEL. The share of non-performing loans in the total loans declined by 0.2% and equalled 8.1%. In this period, the reserves of non-performing loans amounted to 50.3%.

In June 2016, the volume of overdue loans also increased (16.7%; 50.6 mln GEL). Its share (374.2 mln GEL) in the total loans equalled 2.3%.

In the first half of 2016, the income of commercial banks decreased (-13.7%; 250.5 mln GEL) compared to the corresponding period of 2015. Income from interest increased (10.1%; 105.8 mln GEL), while non-interest income reduced (-72.3%; 436.7 mln GEL).

In this period, in the category of interest income, the income from loans (8.6%; 83.3 mln GEL), from securities (33.3%; 25.5 mln GEL), from “nostro” accounts* (49.1%; 1.8 mln GEL), and there was also an increase from other sources (-22.7%; 3.9 mln GEL).

In the category of non-interest income, income from securities trading declined (-11.7 mln GEL) while other non-interest income (-72.3%; 436.7 mln GEL) declined, which includes dividends received, profit/loss from re-evaluation of currency resources and from property sales. On the other hand, income reduced from conversion operations (-2.7%; 76.3 mln GEL) from fees and commissions (13.6%; 15.8 mln GEL).

In the first half of 2016, the net profit of commercial banks increased by 19.6% compared to the previous year, amounting to 290.7 mln GEL.

 


 * Bank accounts at the corresponding bank on which interpayments are reflected.

 

 

 6

Source: National Bank of Georgia

6  

        Source: Ministry of Finance of Georgia                                                                                                                                           * Forecasted 
                         National Statistics Office of Georgia
                         National Bank of Georgia                              

Footer MayaGrigolia 

 

 

Subscribe to Newsletter

Sign up for the news, job announcements, and events.

Subscribe Newsletter block

Consent(Required)

Sector

Select All
Sector

Periodic Issues

Select All
Periodic Issues
This field is for validation purposes and should be left unchanged.