The international rating agency S&P Global Ratings released an updated assessment of banking sector risks.

According to the National Bank of Georgia (NBG), in its report, S&P Global Ratings reviews overall trends in the regional banking sectors, outlining their key strengths and vulnerabilities, principal challenges, and prevailing macroeconomic risks.

According to the agency’s combined assessment of economic and banking sector risks, Georgia has been placed in Group 7, which represents the most favourable category in the region and is shared with Kazakhstan.

“The report assigns particularly high marks to Georgia’s institutional framework, emphasising that the regulation and supervision of the banking sector are among the most advanced in the region.

The publication further notes that, in terms of the share of IFRS Stage 3 loans in total portfolios, Georgian banks demonstrate the strongest asset quality in the region. At the same time, the cost of credit risk remains minimal, reflecting both a supportive macroeconomic environment and the effective performance of the National Bank of Georgia as the sector’s regulator.

In addition, analysts underline that the governance framework of the National Bank continues to strengthen.

S&P Global Ratings also expects that Georgia, as a regional innovator, will further align its bank resolution framework with the relevant EU directive (BRRD), on which it is substantially based,” reads the NBG press release.