Strong retail lending boosts Bank of Georgia interims
By Frank Prenesti
Date: Wednesday 14 Aug 2019
(Sharecast News) - Bank of Georgia on Wednesday posted a rise in first half profits on the back of strong retail lending, although net interest income fell as it moved towards providing higher quality loans.
Interim profits rose 36.9% to GEL 209.1m (£60.03 million). The bank's net interest margin fell to 5.6% from 7% "largely reflecting competition driven pricing pressure and our shift towards a higher quality, finer margin product mix on the back of tighter regulatory conditions for unsecured consumer lending".
The loan book increased 30.5% to GEL 10.58bn, of which 67.2% was made up of retail loans.
Recent regulatory changes in retail lending guidelines has hit growth in unsecured consumer loans at the bank although chief executive Archil Gachechiladze said it had "already reset its base for the coming years".
Second quarter operating income rose 1.7% year-on-year to GEL 257.3mln in 2Q19 and up 5.8% for the half compared with 2018 to GEL 516m primarily driven by strong growth in net fee and commission income and net foreign currency gains benefiting from a high level of currency volatility in 2019.
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