Outlook and Indicators

www.pmcg-i.com
Issue #21

Economic

EEEEEBanking Sector - 2013

19.03.2014

In January 2014, the indicator of the volume of loans exceeds (21.6%) to the corresponding indicator in January 2013. The weighted average interest rate on loans decreased (1 percentage point) and equals 18.4%. In January 2014, the indicator of the volume of deposits exceeds(21.0%) to the corresponding indicator in January 2013. In the mentioned period, the weighted average interest rate on deposits decreased (2.4 percentage points) and equals 6.2%. In 2013, compared to 2012, the profit of the commercial banks increased by 255 mln.GEL and equals 389 mln.GEL.
Deposits and its growth rate
12000 10000 8000
mln.GEL

35% 30% 25% 20%

6000 15% 4000 2000 0

May May 2011 Jan 2012 Jan 2013 Jan May 2014 Jan March March March Oct Oct Apr Apr July July Apr Sept Sept July Sept Aug Nov Aug Nov Aug Oct Jun Jun Jun Nov Dec Dec Dec Feb Feb Feb

10% 5% 0%

Deposits in National Currency (left)

Deposits in Foreign Currency (left)

Deposits Growth Rate (compared to the previous year) (right)

In January 2014, the indicator of deposits exceeds (21%) the corresponding indicator in January 2013. Both, the indicators of the volume of deposits denominated in GEL (27.0%) as well as in foreign currency increased (17.6%). The share of deposits denominated in foreign currency (62.0%) still exceeds to the share of deposits denominated in GEL (38.0%), but it is 1.8 percentage points lower than the indicator of January 2013 (63.8%). This points to the increase of the level of larization, which on its turn is a significant determinant for the implementation of the effective Monetary Policy and its impact on the economy. In January 2014, the weighted average interest rate on deposits is 6.2%, which is 2.4 percentage points lower than the corresponding indicator in January 2013. Besides, the interest rate on National currency denominated deposits reduced by 2.6 percentage points and equals 8.8% and on foreign currency denominated deposits reduced by 2.4 percentage point and equals 5.3%.
Monthly Dynamics of loans to the National Economy
10000 9000 8000 7000
mln.GEL

In January 2014, the indicator of the loans to the national economy exceeds (21.6%) the corresponding indicator in January 2013. The share of the loans to both, individuals as well as to legal entities increased (31.8%; 13.8%). In this period, the highest shares of the loans to National economy are for Trade (45.1%), Industry (17.4%) and Construction (8.1%) sectors. The share of consumer loans in total loans to individuals is 38.2% and the share of the loans secured by the real estate in total loans to individuals is 44.1%. In January 2014, the weighted average interest rate on loans is 18.4%. This indicator is 1 percentage point lower than the indicator of January 2013. The interest rate on National currency denominated loans reduced by 1.5 percentage point and equals 21.0%. The interest rate on foreign currency denominated loans reduced by 2.4 percentage point and equals 12.9%.
Dynamics of NPLs and its share in total loans
1000 900 800 700
m ln.GEL

Deposits growth rate (%)

35% 30% 25% 20% 15% 10% 5% 0%

2011 Jan 2012 Jan 2013 Jan Jun Jun March March March July July Jun May May May Aug Aug July Sept Sept Aug Sept Feb Feb Dec Nov Nov Dec Feb Oct Oct Apr Apr Apr Oct

6000 5000 4000 3000 2000 1000 0

Loans of Legal Entities (left)

Loans of Individuals (left)

Growth rate of Loans (compared to the previous year) (right)

14% 12% 10% 8% 6% 4% 2% 0%

Share,%

600 500 400 300 200 100 0

The share of the non-performing loans in total loans is an important indicator for determining the quality of the loan portfolio. In January 2014, the volume of NPLs decreased (-3.9%). Thus, the share of NPLs in total loans (9.6%) decreased by 2.0 percentage point (7.6%). In January 2014, 50.0% of non-performing loans is covered by the special reserves.

NPLs (left)

Share of NPLs in total loans (left)

Loans growth rate (%)

Outlook and Indicators

www.pmcg-i.com Issue #21
M19.03.2014

Economic

EEBanking Sector - 2013

250

The dynamic of the loans on agriculture, hotels and restaurants and financial intermediation

In January 2014, the indicator of loans on agriculture exceeds (167.3%) the corresponding indicator in January 2013. The volume of loans on hotels and restaurants and financial intermediation also increased significantly (129.3%; 467.7%). The increase of the loans to these sectors reflected on the growth of the mentioned sectors. According to the indicator of the first three quarters of real GDP 2013, agriculture increased by 9.0%, hotels and restaurants by 3.1% and financial intermediation by 7.6%.

200

150
mln.GEL

100

50

0
2011 Jan 2012 Jan 2013 Jan 2014 Jan Sept Sept March March March Sept Feb Feb July July Feb July Aug Aug Dec Dec Aug Jun Jun Jun May May May Nov Nov Nov Dec Oct Oct Apr Apr Apr Oct

Agriculture

Hotels and restaurants

Financial Intermediation

Financial Aggregates of the Commercial Banks' Activities

3000 2500 2000
mln.GEL

1500 1000 500 0 -500 2007 2008 Incomes 2009 2010 Expenses 2011 2012 Net Profit 2013

In 2013, compared to 2012, the profit of the commercial banks increased by 255 mln.GEL and achieved 389 mln. GEL. In 2013, the incomes of the commercial banks increased (13.1%, 281 mln.GEL). Non-Interest Income (Fees and Commissions, Net Gains/Losses from Currency Conversion Operations, Net Gains/Losses from Securities Trading, Other Non-Interest Income) and incomes from loans to households also increased significantly (23.3%, 149 mln. GEL; 20.9%, 148 mln.GEL). In 2013, the expenses of the commercial banks increased slightly (1.1%, 22 mln.GEL). In January 2014, the indicator of return on equity (ROE) is 15.1% and exceeds the corresponding indicator in January 2013 (6.4%).

Basic Economic Indicators

Nominal GDP in current prices (mln USD)
Per capita GDP (USD) GDP real growth, percent Consumer Price Index Foreign Direct Investment (USD) Unemployment Rate External Public Debt (mln USD) Poverty Level

III12
4156.1 924.1
7.50%

IV12
4367.6

2012
15 846.8 3 523.4 6.2% 99.1

I 13*
3487.6

II 13*
3958.4 882.8 1.5%

III 13*
4120.3 918.9 1.4%

IV 13*

2013
Contact Information

971.1
2.80%

777.8
2.40%

PMCG Research
99.5

195.4
-

181

911.6 15% 4357.1 9.7%

226.2

Tamar Jugheli
E-mail: research@pmcg.ge
www.pmcg-i.com E-mail: t.jugheli@pmcg.ge T: (+995) 2 921171

232.4

238.7

217.1

914.4

4202

Source:

National Statistics Office of Georgia, Ministry of Finance of Georgia, National Bank of Georgia

*projected

-2-