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Bank of Georgia swung to a loss in the first quarter of the year as higher income was offset by higher credit loss provision as the Covid-19 pandemic was expected to increase loan defaults.
For the first quarter, the company reported a pre-tax loss of GEL 112,975K compared with a profit of 122,748K GEL on-year as operating income rose to 274,480K from 258,714K.
The cost of risk jumped to 241,403K from 42,652K and net interest income grew 3.7% even as net interest margin dropped to 5% from 6% on-year,
Its retail banking business recorded a loss of GEL 78.0m in 1Q20, compared with a profit of GEL 69.8m in 1Q19, resulted 'primarily from the increased cost of risk and non-recurring costs associated with the impact of Covid-19,' the company said.
'With the Covid-19 pandemic, Georgia's economic outlook has clearly deteriorated,' the company said. 'The IMF expects real GDP to decline by 4% in 2020 and the expectations of our investment arm, Galt & Taggart, are consistent with the IMF's projections,' it added.
At 8:57am: (LON:BGEO) Bank Of Georgia Group PLC share price was -55p at 827p