NBG Financial Stability Committee maintains countercyclical capital buffer’s cyclical component unchanged

The National Bank of Georgia (NBG) published its 2025 Financial Stability Report. The report provides an assessment of vulnerabilities and risks within the financial system, with particular emphasis on the medium- and long-term outlooks.

The document also includes a review of financial sector characteristics and those aspects of Georgia’s economy that are significant for financial stability. The report examines external vulnerabilities, the household sector, non-financial companies, and the real estate market. It also offers a comprehensive review of the financial system and an analysis of its resilience.

Furthermore, the document outlines the measures implemented by the National Bank to maintain financial stability, along with an evaluation of their effectiveness. In particular, it provides a comprehensive review of macroprudential policies applied throughout the financial system, as well as microprudential instruments designed to enhance the resilience of individual financial institutions.

Additionally, the National Bank’s Financial Stability Committee has kept the cyclical component of the countercyclical capital buffer unchanged.

According to the NBG, as of August 2025, banks have sound capital and liquidity indicators. In August 2025, annual loan growth, excluding the exchange rate effect, stood at 14.8 per cent, which is largely driven by growth in business loans.

According to second-quarter data, the ratio of loans to gross domestic product (GDP) remains below the long-term trend, with the gap between them still negative. Although robust economic growth in the first half of 2025 has slowed the pace at which the loan-to-GDP ratio gap is closing, the ratio continues to gradually converge towards its long-term level.

“Accordingly, at the current stage, there is no need to change the cyclical component of the countercyclical capital buffer. At the same time, commercial banks continue the gradual accumulation of the neutral component of the countercyclical capital buffer,” the NBG states.