Georgian financial system “maintaining stability”, “supporting” economy, says central bank

The National Bank of Georgia on Wednesday said the domestic financial system was “maintaining stability” and “continuing to support” the domestic economy.

The body added domestic banks had “healthy” capital and liquidity ratios, noting an annual growth rate of 19 percent for loans had been recorded in May, with business loans driving much of the increase.

Unsecured consumer loans exceed the overall trend of credit activity, with their growth in recent months partially attributed to changes in the maturity limit, the Bank said.

The body’s Financial Stability Committee also opted to keep the cyclical component of the capital countercyclical buffer unchanged in its latest assessment.

The ratio of loans to gross domestic product remained below the long-term trend as of the first quarter of the year, the Committee said, attributing the dynamic to a lower credit activity “typical of the first quarter” and a “notable increase” in the gross domestic product.

It also said it expected the negative gap in the ratio of loans to the GDP to close this year as economic growth “gradually normalises”.