Georgia's Economic Outlook 2020
BANK OF GEORGIA'S BUSINESS CONTINGENCY PLAN - COVID-19
10
CAPITAL ADEQUACY
Robust capital position:
The Bank's capital position remains robust, and comfortably above our
minimum regulatory requirements. At 31 March 2020, having absorbed
the full upfront GEL 400 million local accounting general provision (see
details on page 28), the Bank's Basel III Common Equity Tier 1, Tier 1 and
Total capital adequacy ratios stood at 8.3%, 10.6% and 15.3%
respectively, all well above the minimum required levels of 6.9%. 8.7%
and 13.3%, respectively.
Strengthening capital position through Tier 2 instruments:
To further improve its capital position, in April 2020, the Bank drew-
down a $55 million second tranche of a Tier 2 capital instrument initially
arranged in December 2019.
Dividends:
In March 2020, given the level of uncertainty with regard to the global
impact of COVID-19 and the potential length of time of that impact,
the Board of Directors decided not to recommend a dividend for the
2019 year to shareholders at the 2020 Annual General Meeting. As a
result of the ongoing uncertainties, the Board has confirmed that the
Group will not be distributing a 2019 dividend to shareholders. At part
of the NBG's COVID-19 supervisory plan, during the period that banks
partially or fully utilise Pillar 2 or conservation buffers, they are
restricted from any form of capital distribution. Over time, the Group's
dividend policy remains unchanged, and the Board plans to return to a
targeted payout ratio range of 25-40% as soon as practically possible.
LIQUIDITY AND FUNDING
Strong liquidity and funding position:
The Bank's liquidity and funding position has remained strong, and
comfortably above minimum regulatory requirements. At 31 March
2020, the Bank's liquidity coverage ratio stood at 121.2% and net stable
funding ratio at 123.5%, compared to required minimum levels of 100%.
Strong support from IFIs:
The Bank has strong support from International Financial Institutions,
and has already attracted a number of new long-term borrowings both
in local and foreign currencies over the last couple of months. These
total more than US$100 million from a combination of International
Finance Corporation, European Investment Bank and FMO - the Dutch
entrepreneurial development bank (in collaboration with other
participating lenders), most of which has been drawn-down in April
2020.
Strong funding pipeline:
We continue to work with our partner financial institutions and, expect
to sign new long-term facilities of around US$500 million during the
next two to six months. This will further improve our liquidity position
and enable US to proactively support our customers and the
forthcoming economic recovery.View entire presentation