Georgian Banking system in 2010

The Georgian banking sector emerged from the global financial crisis and the domestic economic downturn in substantially good condition. This was a result of the solid pre-crisis capital and liquidity positions of banks, the support of international financial institutions as well as the countercyclical monetary and supervision policies of the National Bank of Georgia, all of which softened the impact of the global crisis on the domestic economy and asset quality of the Georgian banks. Following losses in 2008 and 2009 due to the deterioration in asset quality, the Georgian banking sector returned to profitability, more preciously, refer to table below:

With the aim to ensure financial stability, National Bank of Georgia started to implement Risk based Supervision, which means to use individual approach for each individual institution - according to their risk profile and influence on the financial system. The advantage of risk based supervision is that such method concentrates not only on materialized risks, but also it is forward looking and enables more efficient detection of micro as well as of macro-prudential risks. Additionally, this approach leads to the optimal distribution of scarce supervisory resources to mitigate risks.

There are about 120 branches of local and foreign Commercial Banks in Georgia. At present subsidiaries and branches of commercial banks from Turkey (HALYK BANK, Ziraat Bank), Azerbaijan (The International Bank of Azerbaijan), Russia (VTB), Kazakhstan (BTA), Germany (Procredit Bank), France (Bank Republic-Societe General), Ukraine (TAO-Privat Bank) and Great Britain (HSBC) are operating in Georgia.

Source: National Bank of Georgia