16.Aug .2021 11:00

Galt and Taggart Revises Bank Lending Growth Forecast Up at 15–17% Y/Y in 2021

Galt and Taggart Revises Bank Lending Growth Forecast Up at 15–17% Y/Y in 2021
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Reopening of the economy and strong recovery has boosted loan growth markedly from April 2021 – such is the assessment of the leading investment bank in Georgia, Galt and Taggart. In its recent report, Galt and Taggart highlights that bank loan growth accelerated in both corporate and retail segments hinting at improved sentiments, making bank lending one of the factors supporting investment growth this year along with public infrastructure spending.
 
According to the report, the deposit growth decelerated from May, which hints at continued recovery in demand. Amid stronger currency, higher interest rates, and improved sentiments the deposit dollarization reduced to 60.0% in June 2021 (- 1.39ppts y/y and -0.70ppts m/m). The loan dollarization also reduced to 52.4% (-4.07ppts y/y and -1.55ppts m/m) and NPLs remained low at 2.2%. The banking sector credit portfolio growth accelerated to 11.3% y/y and 12.6% y/y in May and June 2021, respectively, excluding FX effects, after single-digit growth in previous months. Notably, newly issued mortgages surged by 115.2% y/y in June, bringing mortgages stock growth to 13.0% y/y, improving compared to previous months (exc. FX effect).
 
“Amid improved growth figure, we also revised bank lending growth forecast, and expect at 15-17% y/y in 2021 up from 5-10% projected initially (exc. FX effect)” –says Galt and Taggart.