Return on equity (ROE) at leading banks in Georgia slumped last year as the eastern European country struggled with the impact of the Covid-19 pandemic. The country’s economy shrunk by 6.2% in 2020, according to the World Bank, as lockdown restrictions were implemented and tourism collapsed.
ROE at TBC Bank, the country’s largest bank by assets and Tier 1 capital, fell from 20.4% in 2019 to 11.0% in 2020, while at Bank of Georgia, the second-largest bank by both metrics, ROE dropped from 23.2% in 2019 to 11.6% in 2020, according to The Banker Database.
Liberty Bank, the third-largest bank by assets and fifth by Tier 1 capital, also saw a similar decrease from 12.0% in 2019 to –1.6% in 2020. However, VTB Bank Georgia, the fourth-largest by assets and seventh by Tier 1, saw a smaller contraction in ROE, from 10.5% in 2019 to 8.7% last year.
Before the pandemic, the country enjoyed several years of sustained growth, fuelling a rise in export volumes. In 2018, ROE at Bank of Georgia peaked at 27.2%, however Liberty Bank’s ROE has been on a downward trend since 2016.
Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.
