04.May .2022 18:00

43% Of Hotel Sector’s Credit Portfolio Accounts For 10 Hotels

43% Of Hotel Sector’s Credit Portfolio Accounts For 10 Hotels
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The National Bank of Georgia (NBG) reports, that bank loans to the hotel sector in Georgia are highly concentrated.

According to the NBG, the hotel sector has borrowed a total of GEL 2.9 billion from banks, of which 43% or GEL 1.25 billion includes loans of a total of 10 facilities. Among them, the volume of the 5 largest loans amounts to GEL 949 million, while the loan of the facility which ranks on the first place totals to GEL 381 million. The National Bank has not named which hotels are in the top ten borrowers, but it is likely to be the largest five-star hotel in the country.

"The quality of the loan portfolio has deteriorated due to the high valuation of loans in the sector. 87% of the portfolio is denominated in foreign currency and statistics show that the restructuring of foreign currency loans during the pandemic was more extensive than that of loans in the national currency."

As of December 2021, 27% of the hotel sector's 2.9 billion loan portfolio had negative loan status, of which 10% was non-performing and 17% - leveraged loans.

As of the Tourism Administration, 214,000 visitors visited the country last month. In April, the sector recovered to 39% of its pre-pandemic levels.