NPLs at 2.7% in September 2018

NPLs at 2.7% in September 2018

NPLs at 2.7% in September 2018

The FINANCIAL -- Economy -- In September 2018, the banking sector loan portfolio increased 18.8% y/y after growing 19.0% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 22.7% y/y and up 2.5% m/m to GEL 24.8bn (US$ 9.5bn).

Deposits were up 15.7% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 19.3% y/y and up 1.6% m/m to GEL 21.9bn (US$ 8.4bn). Deposit dollarization stood at 62.4% (-2.9ppts y/y and -0.3ppts m/m) and loan dollarization was 55.5% (-0.8ppts y/y and flat m/m). NPLs stood at 2.7% in September 2018 (-0.5ppts y/y and +0.06ppts m/m).

NBG keeps monetary policy rate unchanged at 7.0%

At its meeting on 24 October 2018, NBG’s monetary policy committee decided to keep its key rate unchanged at 7.0%. Annual inflation was 2.7% in September, slightly below the 3.0% target. The committee does not expect a significant deviation of inflation from its target throughout 2018 despite increased macroeconomic risks due to high volatility on regional financial markets. The next committee meeting is scheduled for 12 December 2018.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.4% yield, trading at 98.2 (+0.1% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. Georgia Capital Eurobonds (GEOCAP) were trading at 92.3 (unchanged w/w), yielding 7.9%.

GOGC Eurobonds (GEOROG) were trading at 102.9 (-0.1% w/w), yielding 5.5%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 106.2 (+0.1% w/w), yielding 5.9%.
Georgian Sovereign Eurobonds (GEORG) closed at 105.2 (+0.3% w/w) at 4.6% yield to maturity.

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 14.87/share (-7.56% w/w and -14.07% m/m). More than 235k shares traded in the range of GBP 14.47 – 16.30/share. Average daily traded volume was 54k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 2.65% w/w and lost 10.47% m/m. The volume of BGEO shares traded was at 0.48% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 11.50/share (+0.35% w/w and +5.0% m/m). More than 335k shares traded in the range of GBP 11.39 – 11.70/share. Average daily traded volume was 56k in the last 4 weeks. The volume of CGEO shares traded was at 0.88% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 15.74 (+3.69% w/w and -3.55% m/m). More than 98k shares changed hands in the range of GBP 14.72 – 15.94/share. Average daily traded volume was 23k in the last 4 weeks. The volume of TBCG shares traded was at 0.18% of its capitalization.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.40/share (+9.09% w/w and +7.38% m/m). More than 68k shares were traded in the range of GBP 2.21 – 2.50/share. Average daily traded volume was 25k in the last 4 weeks. The volume of GHG shares traded was at 0.05% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,190mn (US$ 440.3mn).

Ministry of Finance Benchmark Bonds:

5-year GEL 30.0mn (US$ 11.1mn) Benchmark Bonds of Ministry of Finance were sold at the auction held at NBG on October 24, 2018. The weighted average yield was fixed at 7.404%.