Fitch Ratings has revised the outlooks on three major commercial banks in Georgia – TBC Bank JSC (TBC), Bank of Georgia (BOG) and JSC Liberty Bank (LB) to “stable” from “negative”, while affirming their long-term Issuer Default Ratings (IDRs), the ratings agency said on Wednesday.
Fitch has also affirmed the long-term IDRs of ProCredit Bank (PCBG) with a “negative” outlook, which mirrors the outlook on the sovereign rating.
The agency said that the revision of the outlooks to “stable” on TBC, BOG and LB reflected “reduced pressure on the banks’ credit profiles from the pandemic and contraction of the Georgian economy.”
“We expect their pre-impairment profits will be sufficient to absorb additional credit losses from the pandemic without jeopardising their financial profiles, it said in a statement.
Fitch said that funding and liquidity profiles of both TBC and BOG had been stable as banks were largely funded by customer deposits (66 percent and 73 percent of liabilities at TBC and BOG, respectively) and there had been no material outflows at times of market turbulence in 2020.
“Banks entered the crisis with healthy capital cushions and sound performance metrics and we believe the ratings of BOG, TBC and LB can tolerate further moderate deterioration of asset quality,” the Fitch said.
The agency said the rating affirmation of PCBG reflected limited changes in the ability and propensity of its parent, ProCredit Holding AG & Co. KGaA (PCH, BBB/Stable), to provide support to its subsidiary, in case of need.
TBC and BOG are the biggest commercial banks in Georgia, both are listed on the London Stock Exchange. PCBG is among top five banks in the former Soviet country.