TBILISI/May 14 (The Bulletin) — Bank of Georgia on Thursday reported its first quarterly loss since listing on the London Stock exchange in 2012 because of the impact of the coronavirus.
It posted a pre-tax loss of 113m Georgian lari (around $35.2m) for the first three months of 2020 compared to a 111m lari profit during the same period in 2019. Its shares dropped 10% after the results to 791p each, their lowest ever level.
Bank of Georgia has now lost half its value since the start of March when coronavirus lockdowns were introduced.
“Our priority, in response to the Covid-19 global pandemic, was first and foremost the health and well-being of our staff and customers, maintaining robust business continuity and operational efficiency, and ensuring the long-term stability, strength and profitability of the Group,” Archil Gachechiladze said in the Q1 report. “I am confident that Bank of Georgia will emerge from this pandemic having achieved all of these priorities.”
Bank of Georgia quarterly results are important because they act as a yardstick for the Georgian economy. The EBRD has said that GDP in Georgia will shrink this year by 5%, compared to a pre-coronavirus estimate of a 5% rise in GDP. Bank of Georgia painted a slightly less nightmarish outlook for Georgia’s economy and said that it would shrink by 3%.
Scrutiny of the Bank of Georgia Q1 numbers showed the impact of the coronavirus. Bank of Georgia said that its costs increased by 15% from a year earlier. It also said that the cost of borrowing had increased, an indicator of demand for loans and a rise in risk, but that the proportion of non-performing loans was stable, an indicator of the bank’s health.
“At the beginning of the pandemic lockdown our non-performing loans were at historically low levels,” Mr Gachechiladze said.
ENDS
— This story was first published in issue 446 of the weekly Central Asia & South Caucasus Bulletin