TBILISI

Commercial banks in Georgia reported a total net profit of 584 million lari ($172 million) in January-April compared to a loss of 667 million lari in the same period last year when the banking sector was first hit by strict restrictions imposed to stop a spread of the COVID-19 pandemic.

The country’s National Bank said that total income stood at 1.827 billion lari compared to 1.552 billion lari in January-April last year. Expenses amounted to 1.186 billion lari compared to 2.331 billion lari.

The banks’ total assets rose to 58.668 million lari by May 1 from 49.118 million lari a year ago.

Total liabilities rose to 52.264 million lari from 44.063 million lari. Capital rose 6.404 million lari from 5.055 million lari.

There are 15 commercial banks in Georgia, including 14 with foreign capital.

Georgia’s banking sector started to demonstrate first signs of recovery since the beginning of this year when some of the COVID-related restrictions had been eased.

In March, Fitch Ratings revised the outlooks on three major commercial banks in Georgia – TBC Bank JSC (TBC), Bank of Georgia (BOG) and JSC Liberty Bank (LB) to “stable” from “negative”, while affirming their long-term Issuer Default Ratings (IDRs).

The agency said that the revision of the outlooks to “stable” on TBC, BOG and LB reflected “reduced pressure on the banks’ credit profiles from the pandemic and contraction of the Georgian economy.”

“We expect their pre-impairment profits will be sufficient to absorb additional credit losses from the pandemic without jeopardising their financial profiles, it said in a statement.

Fitch said that the funding and liquidity profiles of both TBC and BOG had been stable as banks were largely funded by customer deposits (66 percent and 73 percent of liabilities at TBC and BOG, respectively) and there had been no material outflows at times of market turbulence in 2020.

“Banks entered the crisis with healthy capital cushions and sound performance metrics and we believe the ratings of BOG, TBC and LB can tolerate further moderate deterioration of asset quality,” the Fitch said.

TBC and BOG are the biggest commercial banks in Georgia, and are both listed on the London Stock Exchange.