With two banks dominating 80% of Georgia’s banking sector, financier and former MP Irakli Kovzanadze says it's time for a strong third and fourth bank to emerge to ensure a healthier competitive environment.
Speaking at an event marking the 30th anniversary of the Georgian lari, Kovzanadze stressed that the current market concentration poses long-term risks to competition and interest rate flexibility.
“Georgia’s banking sector is one of the most developed in the post-Soviet and Eastern European space. But its key characteristic is a high level of concentration,” said Kovzanadze. “Two leading banks—both listed on the London Stock Exchange—control the vast majority of assets.”
According to recent data, Bank of Georgia and TBC Bank together hold over 75% of the country’s credit portfolio and 79% of its deposits.
Kovzanadze argued that building strong third and fourth banks would not only boost competition but also contribute to lowering interest rates—benefiting businesses, agriculture, and industry through improved access to financing.
“This is a fundamentally important issue,” he noted. “As interest rates fall, the effect will cascade into the real economy. A competitive financial system is critical for supporting long-term economic growth.”
His concerns were echoed by ProCredit Bank General Director Aleksi Matua, who described the current concentration as problematic.
“Many don’t acknowledge it, but market dominance by just one or two banks undermines true competition,” Matua told BMG. “A level playing field is essential—only then will consumers and businesses feel the real benefits of a healthy banking environment.”
