Small Banks Offering Better Options to Depositors

Small Banks Offering Better Options to Depositors

The FINANCIAL -- Large scale banks, which make up the largest share of the deposit portfolio in Georgia, are offering the lowest interest rates on deposits and the highest on customer loans.

The FINANCIAL -- Large scale banks, which make up the largest share of the deposit portfolio in Georgia, are offering the lowest interest rates on deposits and the highest on customer loans. In the last two years, the interest rate for depositors decreased by 50%. The interest rate for loans also decreased slightly.

 

The bank KSB has the best offer for customers willing to take out a consumer loan this year. With a minimum annual interest rate of 8.1% KSB is followed by Halyk Bank offering customers loans for 12% annually. Liberty Bank, the Ukrainian Privat Bank, and Progress Bank offer the highest interest rates for depositors. They range from 12% to 13% in the national currency. The lowest interest rate on term deposit is offered by Bank Republic, SocGen Group. Here depositors receive almost a twice lower interest rate (6.75%).

An annual 7.5% is the best offer for depositors saving money in a foreign currency. Progress Bank and Privat Bank have the best offers. Depositors willing to save money in EUR may contemplate going to Liberty Bank or Privat Bank, which are the only banks offering 7.5% annually.

The lowest APY on deposits in a foreign currency is offered by Bank Republic and Procredit Bank, the interest rate is at 4.75%.

According to NBG, deposit liabilities of the banking system decreased by GEL 229.8 million (or 2.4 percent) in January 2014, compared with the previous month and amounted to GEL 9.43 billion.

The volume of the deposit portfolio increased by 22.9% in comparison with the same period of 2013. The gross deposit decrease is reasoned by the reduced deposit volume attracted in the national currency.

Commercial banks’ credit portfolio decreased by GEL 44.3 million in January 2014, compared with the previous month and amounted to GEL 10.19 billion. Annual growth of the loan portfolio of commercial banks increased by 20.9%.

Decreased loans in the foreign currency were the reason behind the reduced credit portfolio. Lending in the national currency has increased since that time.

By the end of January 2014 76.4% of the loan portfolio was made up by long-term loans. Out of this sum, 68.6 percent was issued in foreign currencies. Lending in a foreign currency made up 46.7% of short-term loans.

GEL 653,688 thousand was issued by commercial banks in the national currency as of January 2014. By comparison, GEL 319,802 thousand was issued in a foreign currency.

Consumer loans have made up the major part of the loan portfolio issued in the national currency. This is confirmed by the fact that the number of credit agreements is 640,584 and the majority of loans varies from GEL 1,000 to 5,000, and 30% of the credit portfolio amounts to over GEL 1,000.

Overdue loans increased by GEL 25.7 million in January 2014 and totalled GEL 256.7 million. Overdue loans constituted 2.4% of the credit portfolio of commercial banks. 46.7% of overdue loans are denominated in the national currency. Dollarization of the credit portfolio made up 61.8% during the reported period.

Recently, the committee of monetary policy of NBG increased the refinancing rate by 25 basis points and reached 4%. Due to this, the interest rates on loans, which are linked to the refinancing rate, increased by 0.25%.

Nodar Khaduri, Minister of Finance of Georgia, stated that the increasing refinancing rate will not impact on the interest rate on credits. “This should have neither a serious nor minor impact,” said Khaduri.

Central Bank explained its decision with the economic growth recovery observed in the most recent period, so there was no need to maintain moderated policies.

Name of the Bank    APY on Consumer Loan (starting from) GEL    APY on Term Deposit
GEL
TBC Bank    13.95%    8.50%
Bank of Georgia    13.5%    9%
Bank Republic    14,5%    6.75%
ProCredit Bank    15%    6.75%
Progress Bank    14%    12%
VTB Bank    14.9%    7%
Privat Bank    18%    13%
KSB    8.1%    9.5%
BTA Bank    16%    11%
Halyk Bank    12%    9%
Constanta    16%    10%
BasisBank     13.9%    9%
Liberty Bank    N/A    12%
Cartu Bank     N/A    8%

 

 

Author: The FINANCIAL