OREANDA-NEWS. Fitch Ratings has published a presentation on Georgian banking sector.

The presentation discusses the Georgian banking sector in the context of neighboring emerging markets and reviews the specifics of the domestic market.

Fitch highlights that Georgia's economic performance compares favourably with most of its neighbors. As a result, the banking sector was the fastest growing in the region, despite some moderation in lending growth from 2014. The presentation also considers high retail lending penetration and its underlying risks in the context of rapid recent retail growth and high dollarisation rates.

At the same time, Fitch notes that the asset quality and capitalisation metrics of Georgian banks have so far been more resilient than other Commonwealth of Independent States markets, albeit downside risks remain. The sector's profitability also remains solid, despite the challenging environment and rising loan impairment charges, and performance outlook is stable.

The presentation also discusses the funding structure of the banking sector, highlighting the high level of external debt, in particular relative to the country's official reserves, that constrains the authorities' ability to provide support to banks, especially in foreign currency.