Macroeconomic Outlook and 5 Key Themes for 2024

Export income has also increased by 9%, exceeding USD 16.2 million. It should be noted that last year, in the same period, the income received from peaches and grapes made up USD 14.8 million.Also, the price of peaches increased by 5%, which, according to the latest data, amounted to USD 1.14 per kilogram.It should be noted that in the last 10 years, the export of peaches and plums exceeded 170 thousand tons; The income from exports reached USD 154 million.

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In parallel with the international marketing campaigns, the National Wine Agency implements the state program "Promoting Georgian Wine Production In The Local Market", which provides the financing of Georgian wine festivals, thematic exhibitions, competitions, educational activities planned throughout Georgia.The goal of the program is to make the mechanism of financial support from the state for the promotion of wine production in the local market. Within the framework of the program, during 2024, 22 events will be held with the financial support of the National Wine Agency. In 6 months of the current year, 6 events of various kinds have already been held with the funding of the state.The budget of the state program for the promotion of Georgian wine in 2024 was set at 16 million GEL, which is 2 million GEL more than the 2023 budget.

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GGU is the first company to reopen international debt capital markets for Georgian companies since the onset of May-June 2024 volatility. The fixed coupon rate for the bonds was set at 8.875%, with an issue price at 100% of the nominal value, with a maturity of 5 years. Investor interest, both foreign and Georgian, exceeded the issue volume by approximately 60%.J.P. Morgan acted as the sole lead manager and bookrunner for the transaction, with TBC Capital and Galt & Taggart serving as co-managers. Legal advisors for J.P. Morgan and GGU included Latham & Watkins, Baker & McKenzie LLP, BLC Law Office and Dentons, while EY served as the auditor.GGU intends to allocate an amount equal to the net proceeds to eligible projects within its strategic green initiatives. The funds raised will be used to finance new green capital investments and to refinance existing liabilities. GGU has obtained a second party opinion from the leading ESG research and analytics firm, DNV."I am pleased to announce the successful issuance of GGU's second green bond. GGU was the first private company in Georgia to issue green bonds in 2020. With this transaction we continue to uphold our environmental responsibilities and maintain our status as a leading sustainable company in Georgia.I would like to express special thanks to our partners, international financial institutions, for their support - the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the Germany’s Development Finance Institution for the private sector, subsidiary of KfW Group (DEG).The bond funds will be used to refinance GGU's existing liabilities and to finance capital investments in the water supply sector. This transaction will significantly improve the company's financial profile and liquidity, helping us to develop a healthy and sustainable business," said Jose Miguel Santos Gonzalez, General Director of GGU."The size, price, and investor base of this transaction are proof of GGU's strong financial position and great growth potential. The company's securities have attracted considerable interest from retail investors and international financial organizations in both local and international markets. I am delighted that Galt & Taggart played an active role in the successful completion of such a remarkable transaction," said Ketevan Toidze, Deputy Director of Galt & Taggart.“Congratulations to GGU on the successful issuance of green bonds, which has attracted significant interest from both international and local investors. We are pleased that TBC Capital served as the co-managing investment bank for both the company's first and second green Eurobond issuances. The issuance of the second green bond in the international market underscores GGU's long-term commitment to sustainable development. The financial resources obtained from this bond issue will not only enhance the company's financial standing but also support the execution of more green initiatives and projects in the market," said Mary Chachanidze, Managing Director of TBC Capital.According to Fitch Ratings, GGU holds a BB- (Outlook Stable) rating, and S&P Global assigns a BB- (CreditWatch Positive) rating.Georgia Global Utilities (GGU) manages the water supply systems of Tbilisi, Mtskheta and Rustavi (GWP) and energy facilities. GGU owns several hydro power plants with a total installed capacity of 149 MW, including the Zhinvali hydro power plant - the second largest with a reservoir in Georgia. Since 2022, 80% of the company's shares are owned by the Spanish company FCC Aqualia, a leading entity in the European water supply market, and 20% by the investment holding company Georgia Capital.

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According to the document, the volume of loans issued by commercial banks (excluding interbank loans) in June 2024 increased by 966.17 million GEL or by 1.71% compared to the previous month (exchange rate effect excluded, increased by 1.67%) and constituted 57.34 billion GEL by the end of June 2024.The volume of loans in national currency increased by 785.90 million GEL (2.56%) and the volume of loans in foreign currency increased by 180.28 million GEL or by 0.70% in the same period (exchange rate effect excluded, increased by 0.60%).By the end of June 2024, the total volume of national currency denominated loans to resident legal entities issued by commercial banks amounted to 9.36 billion GEL (4.21% more compared to the previous month), and foreign currency denominated loans constituted 16.55 billion GEL (1.05% more; exchange rate effect excluded volume of lending in foreign currency increased by 0.94%).During June 2024, the volume of lending to resident household sector increased by 1.31% or 382.81 million GEL, and constituted 29.52 billion GEL by the end of June 2024.Larization ratio for total loans constituted 54.83% by the end of June 2024 and increased by 0.45 percentage point (exchange rate effect excluded, increased by 0.48 percentage point), compared to the end of May 2024.

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According to the document, the total volume of non-bank deposits in the country′ s banking sector increased by 3.49% or by 1.85 billion GEL (exchange rate effect excluded volume of deposits increased by 3.36%), compared to the end of May 2024 and constituted 54.83 billion GEL by the end of June 2024. In June, the volume of term deposits increased by 885.53 million GEL (by 3.84%; exchange rate effect excluded volume of term deposits increased by 3.69%). Demand deposits increased by 965.10 million GEL (by 3.23%; exchange rate effect excluded volume of demand deposits increased by 3.10%).The larization ratio of total non-bank deposits constituted 50.95% by the end of June 2024 and increased by 0.74 percentage point (exchange rate effect excluded by 0.80 percentage point) compared to the end of May 2024.

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Business lending remains a key strength for Basisbank, solidifying their position among the top three lenders in the country. The credit portfolio for legal entities reached over 1.85 billion GEL, demonstrating their commitment to supporting businesses.  Individuals also benefited from Basisbank's growth, with the personal loan portfolio reaching 828 million GEL.Deposits showed similar positive trends. The overall deposit portfolio grew by 461 million GEL year-over-year to reach 2.37 billion GEL. This growth was driven by both businesses and individuals, with deposits from legal entities increasing by 143 million GEL and deposits from individuals increasing by 318 million GEL compared to the same period last year.Basisbank's subsidiaries, BB Leasing and BB Insurance, also performed well. BB Leasing's credit portfolio exceeded 34.9 million GEL, reflecting a remarkable 59% growth year-over-year. BB Insurance mirrored this success with premiums collected reaching 14.8 million GEL, representing a significant 57% increase compared to the same period last year.Overall, Basisbank's profitability remained strong. Their net profit exceeded 41 million GEL as of June 30, 2024, with a healthy Return on Assets (ROA) of 2.31% and a Return on Equity (ROE) of 14.61%."Basisbank is committed to achieving stable development and solidifying its position within the financial market," stated David Tsaava, General Director of Basisbank. "The robust growth in our financial indicators is a testament to the strength of our credit portfolio. Supporting businesses is a core strategic focus, as it contributes to the nation's economic vitality. We are proud of the growing number of businesses we partner with and remain dedicated to their success. With a 30-year legacy of growth and development, Basisbank is firmly established as a leading financial institution, promoting financial accessibility. The recent confirmation of our long-term credit rating at 'B+' with a 'positive' outlook by Fitch Ratings underscores the high level of trust placed in Basisbank. As a growth-oriented institution, Basisbank remains committed to delivering exceptional banking experiences for our customers in the years to come."

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The placement and payment and calculation agent of the aforementioned bond issuance is "Alpha Capital Advisory" LLC. The legal advisor of the transaction is "BLC Law Firm" LLC."Liberty Bank continues to advance its institutional development, evolving into a complex and sophisticated financial institution. As we progress, the bank is poised to attract interested investors, offering them the opportunity to become integral to our success story.The results of our core transformations in recent years are evident, as reflected in the bank's profitability. We are confident that by issuing subordinated bonds, Liberty Bank will further solidify its position in the financial market, advancing with increased momentum and innovative products. On behalf of the management team and the supervisory board, I extend my gratitude to our agent, Alpha Capital Advisory, and the entire Liberty team for making this achievement possible." – Vato Babunashvili, the CFO and Deputy CEO of JSC Liberty Bank."It should be noted that this debt security is the first inaugural, public issuance of the company in the capital market of Georgia. JSC "Liberty Bank" is one of the first banks that will seek financing in the local capital market through public bond issuance. The aspiration of Liberty Bank to provide business growth financing through the capital market is welcomed, which in turn, we believe, will contribute to deepening further diversification of funding and capitalization in the banking sector - and in turn strengthening the sector.We hope that in order for the company to achieve its goals, the activity of qualified investors will be high. I would like to thank the management, supervisory board and shareholders of JSC "Liberty Bank" for their contribution to the development of the sector and the capital markets of Georgia. Lastly, this transaction represents the third security transaction in the banking sector by Alpha Capital Advisory, as an independent player in the capital markets of Georgia. As an independent player in the market, we hope to contribute to the development of the capital markets through many more interesting and innovative transactions and introducing new issuers to the market." – announced Irakli Elashvili, the managing partner of Alpha Capital Advisory LLC.

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Kobakhidze mentioned "liberal fascism" 5 times in his 3-minute speech.He mentioned this phrase for the first time when he said that the election process will take place in a peaceful situation, if we do not count "a few liberal fascist attacks".Liberal fascism was mentioned by the Prime Minister for the second time when he said that "Parliamentarian Dachi Beraia was attacked by one of the active followers of liberal fascism, named Anania."For the third time, when he stated that these acts of liberal fascism were unfortunately actively supported and circulated by televisions and media outlets belonging to the collective "national movement".Fourthly, when he said: "Given many years of experience, we expect that the provocations will continue in the future as well. In the conditions when the collective "national movement", i.e. all their parties together, cannot gather even 30 percent, they are doubly motivated to organize this type of provocations of liberal fascism. Using technology, they will try to create an aggressive election environment. However, we will do everything in order for the elections to take place in a peaceful situation."For the fifth time, he said that the upcoming parliamentary elections, scheduled for October 26, would be a “referendum” between “war and peace” and between “dark past and bright, European future”.He said the latter could only be achieved through implementation of “decent policy”, “maintenance of peace” and strengthening of the country's economy.

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