Senior Moody Analyst forecasts “robust growth” for Georgian economy, support for operating environment for banks

Alexis Philippides, the Vice President and Senior Analyst at Moody’s Ratings, on Thursday said Georgia’s economy was expected to continue growing at a “robust pace” according to the base scenario of the Agency, which would support the operating environment for domestic banks.

Speaking at a conference on mortgage-backed bonds organised by the National Bank of Georgia, Philippides emphasised the “stable environment” had contributed to the profitability and asset quality of the country’s banking sector.

In recent years, we have seen positive developments in terms of asset quality and profitability in Georgia’s banking sector, aided by a favourable operating environment. Of course, there are certain risks, including geopolitical risks. But if these risks do not materialise, Georgian banks should continue to perform well, similarly to previous years”, he said.

The official also highlighted the “proactive” and “involved” regulatory role of the central bank of the country, saying the institution had implemented measures to “improve liquidity” in the sector and “mitigate risks”.

Rada Tomova, the Head of the Regional Policy Department of Capital and Financial Markets of the European Bank for Reconstruction and Development, told the conference the issuance of mortgage-backed bonds in the country had “high” potential to develop the local capital market, create new long-term sources of finance, and improve investment ratings.

She said the legal framework for mortgage-backed bonds in Georgia, developed with the assistance of the EBRD, complied with European Union standards, adding the EBRD was “looking forward” to issuing its first mortgage-backed bonds in Georgia, as the legal framework met European standards and had been rated by Moody's.

The focus is now on the industry, as banks are prepared to introduce this new instrument to the Georgian market”, she said.

The goal of the conference was to promote the development of the mortgage-backed bond market in Georgia, the NBG noted.