Georgian banks earnings fell 20%  in February

Georgian banks earnings fell 20% in February

access_time2019-03-25 15:13:47

In February the profit of commercial banks decreased by 20% in comparison with the same period of 2018 and amounted to GEL 55. 7 million which is 34, 2 million less than last February.

Net profit of the microfinance sector is also declining - in 2018 the profit of MFOs made GEL 21.1 million which is 13 million less than in 2017.

Not only banks, but the entire financial sector, sees its profitability decline. Experts say the main reason for this is the introduction of numerous new regulations that have significantly tightened lending. All this has led to a decline in bank  lending and profits.

Experts do not expect the situation will improve; moreover, they predict a further deterioration in financial performance if  the regulations are not either canceled or softened.

The regulations have created problems not only for the financial sector, but also for other sectors of the economy.  Sales are falling in the construction sector as banks have practically stopped issuing mortgage loans, consumer electronics sales have sharply declined due unavailability of consumer loans.

If everything continues like this, the decline  will keep growing, deepening, and will affect related sectors, such as the building materials production.


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