Growth of the banking sector in Georgia: Assets and deposits reach new heights

Georgia's banking sector continues its steady growth, showing positive results in May 2023. According to the information published by the National Bank of Georgia, the total assets of commercial banks increased by 1.55 billion lari or 2.3% compared to the previous month. The volume of assets of the banking sector by the end of May amounted to an impressive amount of 67.8 billion lari (equivalent to 25.8 billion dollars). It is interesting to note that 13 out of 15 commercial banks in Georgia have foreign capital in their authorized capital.

Deposits are also one of the key indicators of the banking system, and in this aspect Georgia also shows positive trends. The volume of deposits in the banking sector by June 1, 2023 reached 45.48 billion lari, exceeding the indicator of the beginning of May by 2.39 billion lari or 5.54%. A study by the National Bank of Georgia indicates a noticeable increase in term deposits by GEL 640.93 million or 3.72%, as well as demand deposits by GEL 1.75 billion or 6.76% in May compared to the previous month.

Another important indicator is deposit larization, which determines the share of domestic currency in the total volume of deposits. According to the National Bank of Georgia, as of June 1 of this year, the larization rate was 49.52%, which is 0.82 percentage points higher than on May 1. It is interesting to note that the weighted average market interest rate on term deposits in May was 8.22%, including 11% on deposits in national currency and 1.26% on deposits in foreign currency.

Lending also continues to grow in the Georgian banking sector. The volume of loans issued by commercial banks in May 2023 increased by 959.72 million lari or 2.14%, reaching 45.73 billion lari by June 1 of this year. Loans in national currency increased by GEL 286.06 million or 1.14%, while loans in foreign currency increased by GEL 673.66 million or 3.41%.

According to the National Bank of Georgia, loans issued to resident legal entities amounted to 7.36 billion lari in national currency, which is 0.1% more than in the previous month, and 12.45 billion lari in foreign currency, which is 3.19% more than in the previous month, by the end of May 2023. In May 2023, the volume of lending to the residential household sector increased by 2.18% or 525.43 million lari, reaching 24.68 billion lari by June 1 of this year. The loan larization ratio at the end of May was 55.34%, which is 0.55 percentage points lower than on May 1, 2023.

Georgia's banking sector continues to show stable growth, with an increase in assets, deposits and lending volume. These indicators indicate the confidence and confidence of both local and foreign investors in the economic stability and prospects of the country. The developing banking sector is an important factor for economic growth and job creation in Georgia.