According to the regulations on financial transparency approved by the National Bank president by N.145 decree in 2006, Georgia based commercial banks must publish quarter financial reports. Therefore, commercial banks have already published the 1Q15 report (31.03.2015).
We introduce ratings of commercial banks in terms of main parameters that give comprehensive information on the performance and development tendencies of the whole sector and separate commercial banks. The previous issue of the Banks&Finances newspaper (N404) has published quarter financial reports of Georgia based commercial banks. Today we introduce ratings of commercial banks based on these reports.
We introduce ratings in terms of total assets, stock capital, total loans, term deposits, net profits and reserves on expected loan losses. To better outline the existing dynamics in the bank sector, indicators reflect various periods, namely, the ongoing period (March 31, 2015), the same period of 2014 (March 31, 2014) and the same period of 2013. Consequently, you are able to receive information on the bank sector’s development tendencies through the last three years.
It should be also noted JSC Bank Constanta has recently merged with JSC TBC Bank and therefore, Bank Constanta is not registered in the Georgian bank sector. The same situation is expected in relation to JSC Privatbank that will merge with Bank of Georgia. Consequently, at this stage, the Georgian Bank sector registers 20 commercial banks and this quantity will shrink to 19 ones in several months.
Total assets of commercial banks have considerably increased compared to the same period of 2014. Namely, the bank sector has increased by over 5 billion GEL year on year. Growth tendency is discerned in relation to total assets and term deposits. Commercial banks have also grown net profits indicators. Namely, the sector’s net profits exceeded 65 million GEL as of March 31, 2013, while the figure marked 95 million GEL as of March 31, 2014 and 105 million GEL as of March 31, 2015.
The below charter reflects the existing situation in the bank sector in terms of several concrete important indicators.
Analytical Group of the Banks & Finances
Rating of Commercial Banks in terms of Total Assets (in thousands of GEL)
The Georgian bank sector’s upturn made up over 5 billion GEL year on year. A major stake of growth in assets is registered for Bank of Georgia and TBC Bank. Bank of Georgia assets have risen by 1.789 million GEL year on year, while TBC Bank assets have grown by 1.710 billion GEL. Only Silk Road Bank assets have decreased by 32 million GEL in the reporting period. Cartu Bank assets have jumped up by 350 million GEL from 579 million GEL to 920 million GEL. Moreover, Bank Republic assets have increased by 350 million GEL. Basisbank assets have increased by 270 million GEL.
VTB Bank Georgia assets have risen by over 200 million GEL. Liberty Bank and ProCredit Bank have increased assets from 100 million GEL to 200 million GEL each. The Batumi Branch of Turkish IS Bank has increased assets by 110 million GEL from March 31, 2013 to March 31, 2015, including 80 million GEL upturn was registered for the last reporting year. Other commercial banks have also recorded growth in terms of assets, excluding Silk Road Bank.
Rating of Commercial Banks in terms of Stock Capital (in thousands of GEL)
Stock Capital Shrink in Three Commercial Banks.
The Bank sector has increased stock capital year on year. TBC Bank has recorded a major upturn and its stock capital has increased by 340 million GEL. Bank of Georgia stock capital has grown by over 160 million GEL. Cartu Bank capital has increased by about 50 million GEL. Bank Republic stock capital has risen by nearly 40 million GEL. Liberty Bank, ProCredit Bank, Basisbank, VTB Bank, Silk Road Bank and Caucasus Development Bank – Georgia have increased their stock capitals by 5-20 million GEL.
The reporting period has recorded a contraction in stock capital for three commercial banks: PASHA Bank Georgia (from 99 million GEL to 89 million GEL), KOR Standard Bank (from 93 million GEL to 83 million GEL) and Capital Bank stock capital dropped by 6.77 million GEL to 3.921 million GEL.
Rating of Commercial Banks in terms of Total Loans (in thousands of GEL)
In the reporting year TBC Bank and Bank of Georgia have increased their credit portfolios by over 1 billion GEL. The bank sector’s total credit portfolio has also increased. Bank of Georgia credit portfolio has climbed up by 552 million GEL, and TBC Bank credit portfolio has grown by 518 million GEL. Liberty Bank credit portfolio has risen by 178 million GEL. Basisbank and Cartu Bank loans portfolios have jumped up by 157 million GEL and 104 million GEL respectively. After the 2011-2012 losses as a result of political oppression, Cartu Bank seems to be regaining the previous positions.
VTB Bank credis portfolio has increased by 96 million GEL year on year, while Bank Republic’s portfolio has risen by 90 million GEL. Only Ziraat Bank, Silk Road Bank and International Bank of Azerbaijan are reported with contraction in credit portfolios. The sector’s total loans have increased by 1.854 million GEL year on year.
Rating of Commercial Banks in terms of Reserves on Expected Loan Losses (%)
The sector’s outsiders: Silk Road Bank and Privatbank
Rating of commercial banks in this category gives valuable information on the health condition of credit portfolio of this or that bank, which have reserved funds from their total loans. The charter shows the indicator of expected loan losses within the acceptable normative (2-7%) is registered for the Batumi Branch of IS Bank and Tbilisi Branch of Ziraat Bank, as well as Halyk Bank, Progress Bank, FINCA Bank, Basisbank, ProCredit Bank, Bank of Georgia, Bank Republic, VTB Bank Georgia, TBC Bank and KOR Standard Bank.
Liberty Bank, Cartu Bank and Capital Bank remain within the 10% risk zone. Year on year indicators have worsen for Privatbank (from 10.28% to 18.52%) and Silk Road Bank (from 16.34% to 25.5%).
Rating of Commercial Banks in terms of Net Profits (in thousands of GEL)
The bank sector’s net profits marked 105 million GEL as of March 31, 2015.
The last year has recorded a growth in net profits of the bank sector. The same tendency was maintained in the first quarter of 2015. The sector’s net profits have increased by nearly 7 million GEL compared to the same period of 2014 and equaled 105 million GEL (104 999 328 GEL). TBC Bank net profits marked 31 million GEL and Bank of Georgia net profits equaled 23 million GEL. The report shows an over 50% stake of total net profits is recorded for two leading commercial banks.
Cartu Bank net profits have considerably increased by 13.5 million GEL year on year. Liberty Bank’s net profits grew by 3.5 million GEL compared to the same period of 2014. ProCredit Bank’s net profits grew by 2 million GEL and Silk Road Bank net profits climbed up by 3 million GEL. In the reporting period FINCA Bank Georgia net profits decreased by 0.9 million GEL and Caucasus Development Bank Georgia net profits shrank by 0.125 million GEL.
Rating of Commercial Banks in terms of Term Deposits (in thousands of GEL)
Bank of Georgia is leader with terms deposits of 2.057 billion GEL. TBC Bank term deposits account for 1.7 billion GEL. Both leading commercial banks have drawn over 0.5 billion GEL terms deposits each year on year. The system has shown a growth in this category. The bank sector has drawn over 6.2 billion GEL term deposits, up 1.9 billion GEL compared to the same period of 2014. Liberty Bank has showed a 178 million GEL upturn, Basisbank growth marked 157 million GEL, Cartu Bank’s growth totaled 104 million GEL, VTB Bank – 96 million GEL, Bank Republic – 90 million EL and KOR Standard Bank – 75 million GEL.
Privatbank, ProCredit Bank and Progress Bank have increased term deposits by 35 million GEL to 45 million GEL. It is worth noting new market players FINCA Bank and PASHA Bank have already collected term deposits of over 3 million GEL. Deposits portfolio have shrunk to three commercial banks: Silk Road Bank lost 6 million GEL term deposits, Ziraat Bank losses marked 0.354 million GEL and International Bank of Azerbaijan losses equaled 4.8 million GEL.