3rd Apr 2020 09:08
(Alliance News) - Bank of Georgia Group PLC said Friday Georgia's banking regulator has unveiled a series of measures to help with the fallout caused by Covid-19.
The initiatives under the National Bank of Georgia's revised supervisory plan are aimed at "alleviating the negative financial and economic challenges created by the global Covid-19 pandemic in Georgia", the bank said.
The lender added: "The measures, which have been introduced with immediate effect, are mainly focused on capital adequacy and liquidity initiatives that allow banks to use existing buffers to support customers in the current financially stressed circumstances, to continue normal business activities as far as possible, and to support the economy through ongoing lending operations."
The measures include reducing Georgian banks' conservation buffer requirement of 2.5% of risk-weighted assets to 0%.
Elsewhere, the currency induced credit risk buffer requirement has been reduced by two-thirds indefinitely. Coupled with this, the phase-in of additional credit portfolio concentration risk buffer and net Grape buffer requirements on CET1 and Tier 1 capital, planned for the end of March, has been postponed.
The regulator is also allowing lenders in the country to reduce their liquidity coverage ratios. The eligibility criteria for repo-eligible securities is also being reviewed, with the aim of improving Georgian lira liquidity.
Finally, the regulator has postponed national stress testing, which was scheduled for the end of May.
Bank of Georgia said its capital adequacy ratios, funding and liquidity positions have been "strong", with the lender noting they remain "comfortably" above the regulatory minimums.
As of February 29, the lender's liquidity coverage ratio stood at 133.9% and net stable funding ratio at 130.9%, compared to the 100% minimum required level.
The CET1, Tier 1 and total capital adequacy ratios were 12.2%, 14.2% and 18.6%, respectively, "comfortably" ahead of the minimum required levels of 10.2%, 12.2% and 17.1%.
As a result of these measures, Bank of Georgia expects its CET1, Tier 1 and Total Capital adequacy minimum ratio requirements of 6.9%, 8.7% and 13.3%, respectively, as of March 31.
Shares in Bank of Georgia were 0.8% lower in London on Friday morning at 899.12 pence each.
By Paul McGowan; [email protected]
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