Two-Bank Dominance and the Left-Behind Players – Early 2025 Trends in Georgia’s Financial Sector

The beginning of 2025 brought important figures for Georgia’s financial sector. According to data from January and February, commercial banks and microbanks collectively reported a net profit of 462.064 million GEL, reflecting a strong and profitable financial system. However, nearly 93% of this profit was generated by just two institutions — Bank of Georgia and TBC Bank — highlighting the highly oligopolistic structure of Georgia’s banking landscape and the overwhelming market concentration.

Bank of Georgia led the sector with a net profit of 256.610 million GEL, followed by TBC Bank with 172.440 million GEL. Combined, these two banks earned over 429 million GEL, covering almost the entirety of the system’s profits. Against this backdrop, the earnings of all other banks appear largely symbolic. Liberty Bank posted 18.435 million GEL, Basisbank earned 14.198 million GEL, and Credo Bank followed with 12.434 million GEL — relatively strong positions but still significantly behind the two dominant players. This division clearly reflects a split between systemic and non-systemic banks.

Several other institutions, such as Terabank, Cartu Bank, ProCredit Bank, and Halyk Bank, reported modest profits. Notably, the microbank Crystal achieved 2.786 million GEL in profit — an impressive figure for a microfinance institution, signaling its solid positioning in a growing segment of the market.

In contrast, five banks reported losses. The most significant was VTB Bank, with a loss of 28.028 million GEL — a figure that raises serious concerns and warrants attention. Other losses were recorded by Silk Bank (3.350 million), PASHA Bank (1.535 million), Hash Bank (1.417 million), and PayV Bank Georgia (57,000 GEL). These numbers suggest that for certain market players, their strategic models may have proven ineffective at the start of the year.

It is also noteworthy that during this period, 17 commercial banks and 2 microbanks were operating in Georgia — reflecting a relatively small market but one characterized by intense competition. However, such a high concentration of profit in just two banks poses questions about market diversity and raises concerns about systemic risk. How sustainable is a banking system where nearly all profit is generated by two institutions?

For the sake of economic stability, it is essential to strengthen small and mid-sized banks, and to promote microbank development, ensuring that financial services remain widely accessible, product offerings stay innovative, and customers maintain real choices. In the long run, a more balanced financial ecosystem will be crucial not only for stability, but for inclusive and resilient economic growth.