BOGG's profit accounts for more than half of the sector's total profit

Annual inflation remains below the target level of 3%. In February 2025, the overall price level increased by 2.4% year-on-year, while core inflation stood at 2.0%. Inflation for domestically produced goods and services, which tend to be stickier and better reflects long-term inflation expectations, remains aligned with the target level, reaching 3.0% in February. Compared to previous months, the moderate increase in inflation and its convergence toward the target can be attributed, on the one hand, to the realization of risks in international markets. Specifically, the increase in international food commodity prices has been partly passed on to the domestic market, leading to a slight rise in inflation compared to the previous month. On the other hand, the moderate increase in inflation is related to the fading base effect of the reduction in electricity tariffs.Notably, based on data from January-February 2025, current dynamics are largely in line with the central scenario assumptions of the NBG’s latest forecast. Against the backdrop of increased pressure from international markets, inflation is gradually converging toward the target level and is expected to be close to it in the first half of 2025. Subsequently, partly due to the base effect, inflation will temporarily exceed the target before stabilizing around 3% in the medium term. However, economic activity appears stronger than initially expected. According to preliminary data, economic growth in January stood at 11.1%. At this stage, according to the latest estimates from the NBG, economic potential remains high, alongside strong aggregate demand, which partially offsets demand pressures on prices. Robust aggregate demand is also supported by credit activity, primarily driven by business loans, which contribute positively to economic potential growth.Amid elevated global uncertainty, the Monetary Policy Committee has, on one hand, considered a high-inflation risk scenario, where the realization of fundamental factors would require a higher path for the policy rate compared to the central scenario. Recently rising global uncertainty has been largely driven by tariff policies in international markets. Such policies highlight signs of economic fragmentation at the international level, intensifying the likelihood of supply chain disruptions and the emergence of a global high-inflation environment. On the domestic front, demand-driven price pressures remain a notable concern.On the other hand, the Monetary Policy Committee has considered a low-inflation risk scenario, where the realization of fundamental factors would require a lower trajectory for the monetary policy rate compared to the central scenario. In the wake of global uncertainty and tariff policies, the U.S. dollar index (DXY) is weakening. Against this backdrop, the appreciated exchange rate will exert downward pressure on headline inflation through imported goods inflation.As a result of macroeconomic analysis and the assessment of existing risks, the Monetary Policy Committee has considered it optimal to adopt a cautious approach toward further normalizing the monetary policy rate, keeping it unchanged at 8%. Upcoming decisions on the monetary policy rate will depend on updated macroeconomic forecast scenarios and risk assessments.The NBG will use all available instruments to maintain price stability. This means keeping the overall price level increase close to the 3% target over the medium term.The next meeting of the Monetary Policy Committee will be held on May 7, 2025.

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According to Creditinfo, as of March 1, active loan contracts worth 49.55 billion GEL have been signed with commercial bank clients (L/Y – GEL 39.8 billion)The portfolio of leasing companies is within 591 million GEL (L/Y – GEL 501 million) within 0.5 billion GEL.As you know, Creditinfo only records loans up to 10 million GEL. The limit was increased at the end of 2022. Previously, it included loans of 3 million.As of 01.03.2025, 90,047 loans of 931 million GEL from 50,055 borrowers of the bank are in 1-year arrears (L/Y - 840 million);A portfolio of GEL 595 million is in 2/3 years arrears (L/Y - GEL 555 million).The problem loan portfolio of banks has increased, unlike previous years (2024, 2023). In addition, the annual growth rate of lending has increased. As of 02/2025, it is 17.9% (01.03.2024: + 17.35%Y.Y).The CreditInfo database also includes loans issued based on income received through remittances.

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As of 01.02.2025, it has a market share of 38.4% (01.02.2024 – 39.3%).The sector's large-asset (GEL 36.9 billion) systemic bank is the leader in deposits of legal entities. At the end of January, it has a portfolio of 8.3 billion GEL (01/2024 – 8.5 billion GEL). It is ranked second in terms of total (19.6 billion) and retail deposits (11.3 billion) (01/2024 – 18.1 billion, 9.6 billion).TBC is second in terms of Return on Assets. As of 01.02.2025, the bank's ROE (annualized) is 20% (01.02.2024 – 22.1%).

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As of the document, the United Kingdom reaching USD 222.6 million in Q4 2024 (60.6 percent) was the major foreign direct investor country. Malta was the second with USD 67.9 million (18.5 percent) followed by the Netherlands with USD 36.3 (9.9 percent).The largest share of FDI was registered in the financial and insurance activities sector, reaching USD 314.9 million (85.7 percent) in Q4 2024. Real estate activities sector was the second with USD 65.8 million (17.9 percent), followed by the manufacturing sector with USD 23.1 million (6.3 percent).

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As for the foreign direct investments by components, the equity capital totaling USD 483.7 million, 60.1% down than the adjusted data of the previous year and the volume of reinvestment totaling USD 1 billion 170 million, 26.4% down than the adjusted data of the previous year.The share of the three largest investor countries in the total volume of foreign direct investment, in 2024 (preliminary data), amounted to 58.2%.The shares of major foreign direct investor countries in FDI stand as follows: The United Kingdom (33.6 percent), Malta (13.2 percent) and Netherlands (11.4 percent).The share of three major economic sectors in FDI reached 63.9 percent in 2024. The largest share of FDI was registered in the financial and insurance activities sector, totaling USD 526.5 million (39.5 percent), manufacturing was the second with USD 170.2 million (12.8 percent), followed by real estate activities sector with USD 155.3 million (11.6 percent).

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Lion Finance Group (BGEO LN) shares closed at GBP 54.40/share (+2.84% w/w and +12.98% m/m). More than 307k shares traded in the range of GBP 50.50 - 54.70/share. Average daily traded volume was 51k in the last 4 weeks. The volume of BGEO shares traded was at 0.69% of its capitalization.TBC Bank Group (TBCG LN) closed the week at GBP 44.00/share (+2.33% w/w and +24.29% m/m). More than 496k shares changed hands in the range of GBP 41.10 - 44.25/share. Average daily traded volume was 149k in the last 4 weeks. The volume of TBCG shares traded was at 0.88% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 14.94/share (+3.46% w/w and +24.50% m/m). More than 584k shares traded in the range of GBP 14.42 - 15.78/share. Average daily traded volume was 76k in the last 4 weeks. The volume of CGEO shares traded was at 1.48% of its capitalization. 

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Building on the achievements of the first Roadmap (2019–2024), which established a solid foundation for sustainable finance in Georgia, the second one (2025-2028) focuses on further strengthening the regulatory framework by updating, improving, and enhancing existing regulations, guidelines, and tools, as well as introducing new ones. It also emphasizes monitoring implementation, assessing compliance, identifying gaps, and providing feedback for continuous improvement.The development of the new Roadmap was made possible through extensive consultations with local and international stakeholders, including Sparkassenstiftung for International Cooperation (DSIK), the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Sustainable Banking and IFC-supported Sustainable Banking and Finance Network (SBFN).The Phase II of Sustainable Finance Roadmap outlines the future actions that NBG intends to undertake to support sustainable finance development in Georgia. It is structured around six pillars, divided into Core and Supporting Pillars. The Core Pillars include several key areas like embedding ESG considerations-including climate and nature-related issues-into risk-assessment frameworks and decision-making processes of financial institutions; supporting transparency and accurate reporting that would eventually guide more capital flows towards sustainable activities; and embedding sustainability principles into the internal operations and workflows of the National Bank of Georgia. The Supporting Pillars cover areas such as increasing awareness and capacity building on sustainable finance; and, strengthening collaboration with local and international partners to ensure policy alignment and knowledge sharing.The Second Sustainable Finance Roadmap was presented and approved by the Financial Stability Committee. The Governor of the National Bank of Georgia, Ms. Natia Turnava, stated: “Phase II of the Sustainable Finance Roadmap marks a significant milestone in our journey toward sustainable finance. By enhancing regulatory tools, promoting transparency, and supporting the integration of ESG factors into decision-making by financial institutions, we aim to position Georgia as a regional leader in sustainable finance. This roadmap reaffirms our commitment to advancing sustainable finance and ensuring that Georgia’s financial institutions remain resilient, innovative, and aligned with the country’s sustainable development goals.”The Roadmap will be periodically reviewed and adjusted to reflect evolving market conditions, emerging risks, and global trends in sustainable finance.

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In her speech, Turnava highlighted the NBG's ongoing efforts to enhance consumer protection standards and foster a competitive financial environment. She emphasized that the effective implementation of legislative innovations and regulations requires continuous consultation and close cooperation with financial sector representatives. Accordingly, regulatory changes in consumer protection are regularly introduced in response to sectoral challenges and evolving consumer needs.“In 2024, like in previous years, the National Bank of Georgia actively worked to further improve the customer-focused environment in the financial sector, and a number of important activities/changes were implemented in this regard, including amendments made to the regulation on protecting consumer rights. Additional regulatory requirements extended to payment service providers, including detailed procedures for consumer complaints and mandatory reporting to the NBG, effective April 15, 2024.“We have also reinforced market conduct supervision, incorporating risk-based oversight to foster a regulatory environment that prioritizes consumer protection and ensures sector-wide compliance. To this end, we have developed a draft Market Conduct Supervision Strategy, which we will soon present to the public and hope to see adopted this year,” noted the NBG Governor.Turnava also underscored the importance of raising public awareness and sharing key updates through events like Consumer Protection Week."In recent years, the number of customers reaching out to the National Bank of Georgia has steadily increased, further demonstrating the positive impact of our efforts to enhance consumer awareness. In late 2023, the National Bank of Georgia established a Dispute Resolution Commission, which addresses disputes related to payment services, offering consumers a fast, effective, and free resolution mechanism. In 2024, the Commission reviewed approximately 90 disputes between consumers and payment service providers, including banks. Remarkably, 85% of these cases were resolved in favor of consumers, with a total of 300,000 GEL paid to consumers by the service providers," - said Natia Turnava.A major focus of Consumer Protection Week is enhancing accessibility for consumers with disabilities. Six regulatory agencies presented specially developed materials aimed at empowering individuals with disabilities and ensuring equal access to consumer rights information."One of today's key topics is ensuring that persons with disabilities have access to information about their rights. To support this, the National Bank of Georgia has developed a concise booklet that provides essential information to help users better understand their rights and responsibilities. It is worth noting that the financial sector is actively working to create and enhance an inclusive environment for persons with disabilities. The National Bank of Georgia fully supports this process and remains committed to further refining and advancing these efforts in the future," - said Natia Turnava.The opening event was also attended by Ekaterine Galdava, Vice Governor of the NBG. The Third International Consumer Protection Week will take place from March 10-15 in Tbilisi, Akhalkalaki, Zugdidi, and Batumi.Participants include representatives of regulatory agencies, members of parliament, central and regional government officials, international organizations, the Georgian Union of the Deaf, the Union of the Blind, and representatives from the business, academic, and non-governmental sectors. The week’s objective is to strengthen consumer rights protection mechanisms in Georgia.

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