The banking sector makes perfect and biggest segment in Georgian economy. Despite commercial banks are thought as locomotives within the state economy, criticism against crediting institutions may be growing in the last years.

Georgian citizens express complaint in many directions, including against expensive credits, high commission fees and fines, enslaving contract conditions etc. As an example, credit or deposit agreements of business banks include clauses, under which commercial banks are capable of unilaterally revise the approved and signed agreements in addition to their conditions any moment in all forms. This really is alarming situation, when all commercial banks have the identical attitude to clients. Consequently, consumers ought to accept the enslaving conditions offered by crediting institutions. Subsequently, we have now low competition about the banking market. Used, two major commercial banks dominate in Georgia’s banking sector and they dictate the terms.

In his last Tv interview ex Pm Bidzina Ivanishvili “fought” with the two major commercial banks again. “Two banks have overeaten the whole country. Our citizens cannot dispose of bank debts. In this way, I’d say Bank of Georgia and TBC Bank rank first worldwide when it comes to profitability. ?Maybe, we should be proud, but concurrently, we come across that Georgia is leader with regards to excessive debts. Our citizens pay more than one third of the incomes to provide rates of economic banks and that is shameful”, Ivanishvili said in the Tv show of Georgia Public Broadcaster (GPB).

Public criticism, generally speaking, mainly hits two major commercial banks. Today, the Georgian banking sector registers 16 commercial banks as well as greater degree advisors hold an insignificant market ratio. There have been times with well over 20 commercial banks in Georgia. However, in the last years the amalgamation process continues. As an example, in the past couple of years TBC Bank bought Bank Republic and Constanta as well as the crediting portfolio of Progress Bank. Meanwhile, from the mentioned period Bank of Georgia absorbed Privatbank and acquired micro and small loans portfolio from ProCredit Bank. Bank of Georgia assets rose to 12.6 billion GEL from 9 billion GEL during the last Three years. Concerning TBC Bank, its assets increased to 12.9 billion GEL from 6.9 billion GEL, this is the figure has doubled in the last 36 months. Consequently, starting 2015, the market ratio of the two biggest commercial banks in total assets rose to 73% from 54%, this is the growth constituted about 20%. In respect of profits, the ratio of those two commercial banks in complete banking sector’s profits exceeds 80%.

When determining their competitors level over the banking market, the marketplace concentration is appraised, that could be, precisely system banks in complete assets. Such as, in Georgia the marketplace concertation is far greater than in central and eastern The eu. To compare and contrast, the banking service market of Georgia is more concentrated in comparison with The uk ?(CR5 = 33%, HSBC Holdings, Barclays, Lloyds Banking Group, Standard Chartered, Nationwide Building Society), France (CR5=40%, Credit Agricole, BNP Paribas, Societe Generale, Groupe BPCE, Credit Mutuel), Italy (CR5=27%, Intesa Sanpaolo, UBI Banca, Banco Popolare, Mediobanca), Germany (CR5=22%, Deutsche Bank, Commerzbank, DZ Bank, Landesbank Berlin Wurttemberg (LBBW), Bayerische Landesbank, Norddeutsche Landesbank (Nord LB), Helaba Bank, Hypo Housing Holding, WGZ Bank). As noted above, the ratio of two major commercial banks in Georgia makes up about 75%, while jointly when using the third bank


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