S&P assessing the Georgian banking system

S&P assessing the Georgian banking system

The rating agency Standard & Poor’s positively assesses the changes planned for Georgia’s banking system. The agency positively assesses also the National Bank’s future regulation issues for non-banking institutions, limitation of loan issuance without income verification and requiring additional commercial capital from banks. The agency reports that these regulations will reduce possible risks.

Besides, S&P estimates that crediting within the country will increase during the next 4 years and will be similar to the recent trends.

“Monetary policy is still limited by high dollarization rate. We approve of the government’s actions, which serve the goal of reduction of dollarization. Although, the deposit dollarization rate is still high – 63%,” – reports the agency and states that the country’s banking system is strong.

“In 2015-2018, despite significant depreciation of GEL, the share of inactive loans was within the limits of 7%-8%. With IMF methodology, the volume of such loans reduced by 2.4% in the beginning of 2018,” – reports the agency.

 

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