ASSETS OF GEORGIA'S BANKING SECTOR ESTIMATED AT $794 MLN

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TBILISI, August 21 (RIA Novosti) - The assets of the banking sector in the former Soviet republic of Georgia total an estimated 1,436.6 million lari (or $793.7 million, on current rates), as of the end of the second quarter of 2004, the National Bank reports. This is 7.8% more than at the year's start.

Fifty-two percent of the assets (739.8 million lari) were credit investments, which shrank by 5.2% (40.9 million lari) since the beginning of the year. The reduction is mainly attributable to the fact that the banking system's financial data has stopped counting in the statistics from Georgia's Maritime Bank, currently undergoing a bankruptcy procedure.

Credit investments fluctuated within the range of 50% to 60% of the banking assets. As compared with the year's start, the amount of money in the banking sector grew by 17%, or 66 million lari.

In the first two quarters of 2004, the sector's liabilities grew by 10.8% (105.98 million lari), to reach 1,089,600,000 lari.

Georgia's corporate and individual deposits grew, respectively, by 9.8% and 13.4% January through June 2004, to amount to 806 million and 439 million lari. In the structure of bank liabilities, deposits stayed within the range of 70% to 80%.

In the year's first half, the Georgian banks' total income came to 18.8 million lari. But owing to the fact that one problem bank lost 7.1 million lari over the period, the banking sector's earnings totaled a mere 9.6 million lari as of June 30.

The sector's shareholder capital shrank by 1.7 million lari January through June, down to 347 million lari. The reduction is down to the Maritime Bank's insolvency and to the heavy losses incurred by another problem bank.

The Georgian banking sector's assets and liabilities are denominated largely in foreign currencies. This applies to 66 percent of all the assets, 83% of the liabilities, and 80% of the deposits.

By and large, Georgia's banking sector continues to grow, with 81%of the assets, 85% of the liabilities and 84% of the deposits concentrated in the country's six largest banks. Each of these

owns over 5% of the sector's aggregate assets. The financial solvency of the nation's top six banks is a determining factor for the stability of the banking sector.

By the end of June, there were 23 crediting organizations in Georgia's banking system, including two subsidiaries of an Azerbaijani and a Turkish banks. In the January-to-June period, the private Maritime Bank had its license revoked.

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