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.
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.