At no more 2015 the sector’s net profits will exceed 0.5 billion GEL to kick a historical maximum. An analysis of monetary indicators of economic banks shows the GEL exchange rate volatility has inspired this type of extreme boost the sector’s profits, in addition to the development tendencies.
The sector has recently made the primary record. In September commercial banks’ net profits rose by 86 million GEL and marked 377 million? GEL inside the January to September period, up 24% when compared to same period of 2014 and assend 37% as opposed to same time of 2013. This signifies, at the end of 2015, the sector’s profits will exceed 0.5 billion GEL, as you move the figure marked 475 million GEL in 2014.
The sector’s total revenues inside January to September period marked 2.643 billion GEL. Interest revenues extremely increased to one.606? billion GEL. A month-to-month upturn made up 190 million GEL. Revenues from retail loans exceed revenues from corporate loans by 262 million GEL. Revenues from commission fees have in addition extremely increased to 40 million GEL.
The Georgian bank sector registers 19 commercial banks as of October 1, 2015, including 17 commercial banks with foreign capital co-participation then one as the branch of foreign commercial bank.
Despite the restriction after the GEL exchange rate volatility effects, your budget sector confidently keeps increasing and total assets of commercial banks rose by 2.6% from October 1 when compared to September 1. Whenever we reflect website in absolute indicators, the identical indicator has risen by 3.5% to 24.79 billion GEL, Vakhtang Charaia, a head with the Tbilisi State University Center for Analysis and Prognosis says
“This success on the bank sector represents an indisputable achievement within the Georgian finance market, but it is interesting what steps and activities were taken by commercial banks to earn similar huge net profits. Also, it is interesting your house historical a lot more net profits (the January to September period) was achieved through only currency exchange conversions”, Vakhtang Charaia said.
A detailed analysis demonstrates commercial banks earned 19.2 million GEL from the September net profits (total profits equal 85.3 million GEL) through conversion operations, as well as 92.5 million GEL in the January to September net profits (total profits equal 377 million GEL). These indicators constitute about 24.5% altogether profits. These indicators exceed the 2014 same indicators by 27.8%, exceed the 2013 same figures by 35.1% and surpass the 2012 same figures by 57%, he added.
“Consequently, we will conclude that despite huge net profits commercial banks have received from conversion operations, their ratio in whole net profits is declining, as commercial banks are expanding all the different activities and services therefore we welcome this fact”, Vakhtang Charaia noted.
The GEL exchange rate changes have partly driven accurate documentation profits of commercial banks, Mikheil Tokmazishvili, the first kind an affiliate the Georgian National Bank (NBG) board, said.
“Money has real value on time. This signifies the price of money changes in the course of time. Consequently, commercial banks and finance organizations know adequately they will should never issue such family of money which will depreciate after having a certain period. The currency depreciation natural process seemed to be accompanying this period”, Mikheil Tokmazishvili said and added that? commercial banks attached GEL denominated credits on the USD exchange rate to go back the loans as a consequence of current forex rates. Consequently, commercial banks have made profits from besides USD denominated loans, and also from GEL denominated loans.
“Thanks to those calculations the GEL devaluation has gotten significant profits to commercial banks. Due to this fact, the devaluation has grown the nominal property value their money”, Mikheil Tokmazishvili said.
It is definitely worth noting in September, as compared with August, commercial banks’ credit portfolio increased by 327.A million GEL (up 2.1%). Without worrying about exchange rate volatility effects, in September the credit portfolio growth marked 1.2% to fifteen.7 billion GEL at the time of October 1, 2015. In the same period, the GEL denominated loans portfolio increased by 89.Six million GEL (up 1.6%) and foreign currency denominated loans portfolio rose by 237.6 million GEL (up 2.4%).
The Larization coefficient of total loans marked 35.87% at the time of October 1, 2015. This signifies the dollarization coefficient exceeds 64% and specialists consider this to be figure alarming and urge the NBG to use efficient decisions. However, similar proportion of loans nourish commercial banks and grows their profits.
Irakli Mekvabishvili-?EBRD Chief Banker
“The Georgian bank sector is distinguished in your neighborhood in terms of quality of assets and probability. Rapidly GEL depreciation, commercial banks have were retain the credit portfolio in the adequate level. Exactely bad loans has considerably declined. Right after all seasons the portfolio may worsen, however the expected losses could possibly be remunerated through current profits and capital”.
Lado Gurgenidze-?Executive Chairman within the Supervisory Board of Liberty Bank
“The Bank carries on work well, specializing in the profitability and return on equity while our capital buffer high. In truth, our capital base is now so robust, that in Q3 2015 we paid our maiden (post-2009 turnaround) common dividend of GEL 8 million or GEL 0.0014986 per common share”.
Ramaz Kukuladze-?Deputy CEO at Bank Republic, Societe Generale Group
?The final 75 percent have brought excellent results. The financial institution has strengthened. The level of assets has improved. The nine months of 2015 were successful for the bank in terms of profits”.