🔒 Banking Stability in Georgia

Banking Stability in Georgia

The Banking Stability indicator measures the solidity of the banking system — capital ratios, non-performing loan (NPL) shares, liquidity buffers, and systemic crisis resilience according to IMF FSAP assessments. Georgia achieves 65/100 and rank 58 out of 231 — a respectable figure that classifies the Georgian system as solid but not exceptionally robust.

Structure of the Georgian Banking System

The Georgian banking sector is highly concentrated: TBC Bank and Bank of Georgia together hold around 70–75% of total banking assets. This concentration enables effective oversight and investment in digitalisation, but also creates systemic concentration risk. The National Bank of Georgia (NBG) has progressively introduced Basel III requirements since 2016. As of 2024, Tier-1 capital requirements of 11.5% apply to systemically important institutions — comfortably exceeded by TBC (Tier-1 approx. 19%) and BoG (Tier-1 approx. 18%).

Strengths: Capitalisation and NPL Ratio

• Capital ratio: TBC and BoG are in the top quartile of comparable emerging-market banks
• NPL ratio: Approx. 2.8% of the loan portfolio (2023) — below the regional average
• Profitability: Return on equity of 25–35% (2022–2023) — very high by European standards

Risk Factors

• High dollarisation: Approx. 55–60% of all deposits held in foreign currency; a sharp Lari depreciation increases the debt burden of FX-exposed borrowers
• Geopolitical exposure: Russian tourism, remittances, and Georgian exports are all relevant; geographic proximity to active conflicts remains a background risk factor
• Limited deposit insurance: Only up to 5,000 GEL (approx. 1,800 USD) — well below EU standard (100,000 EUR)

Comparison

• Canada (97), Singapore (94), Australia (87): Exceptionally stable systems with strong regulatory oversight
• Portugal (72), Estonia (77): EU deposit insurance as a systemic advantage
• Georgia (65): Solid, well-capitalised, but without an EU safety net
• Armenia (58), Ukraine (32): Lower capital buffers and higher crisis risk

What Expats Should Note

TBC and BoG offer solid security for everyday-relevant amounts. Those wishing to hold substantial savings in Georgia (five-figure USD/EUR amounts upward) should factor in the limited deposit insurance and consider spreading volumes across multiple banks or international accounts.

Conclusion: Georgia's banking stability score of 65/100 is a realistic assessment of a solid emerging-market system: well-capitalised, profitable, under competent supervision — but without an EU backstop, with high currency concentration, and carrying a geopolitical background risk.

This article was created on April 13, 2026