Bank of Georgia Growth and Reform Strategy
COST OF CREDIT RISK DECOMPOSITION
Cost of credit risk
Retail Banking cost of credit risk
2017
2018
2019
Retail Banking cost of credit risk, as reported
2.5%
2.1%
1.2%
Retail Banking cost of credit risk, excluding high-yield portfolio
1.3%
1.2%
1.0%
Retail Banking cost of credit risk decomposition
2017
2018
2019
Mortgage loans
0.1%
0.0%
0.1%
MSME loans
0.6%
0.4%
0.5%
Consumer loans, excluding high-yield portfolio
0.5%
0.7%
0.4%
High-yield portfolio
1.3%
1.0%
0.2%
Total
2.5%
2.1%
1.2%
Total cost of credit risk decomposition
2017
2018
2019
CIB loans
0.5%
0.2%
0.1%
Mortgage loans
0.0%
0.0%
0.1%
MSME loans
0.4%
0.3%
0.3%
Consumer loans, excluding high-yield portfolio
0.3%
0.5%
0.3%
High-yield portfolio
0.8%
0.6%
0.2%
Other (BNB and GLC)
0.2%
0.0%
-0.1%
Total
2.2%
1.6%
0.9%
BANK OF GEORGIA
Key takeaways
Of 2.5% of Retail Banking cost of credit risk ratio in 2017, 1.3% was attributable to the high-
yield loan portfolio, as compared to only 0.2% in 2019, as a result of change in regulatory
environment and phase-out of high-yield portfolio since 2nd quarter 2018
The cost of credit risk ratio of the Retail Banking loan portfolio excluding the high-yielding loans
has been around 1.0-1.3% historically, and has been improving during 2019
The decline in the overall cost of credit risk of the loan portfolio is attributable of the reshuffling
of the loan book on the back of regulatory changes since second quarter 2018
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