BAKU, Azerbaijan, June 26. The international rating agency Fitch Ratings has assigned the Georgian bank JSC Isbank Georgia (ISBG) a Long-Term Foreign-Currency Issuer Default Rating (IDR) of “B+” with a stable outlook.

This is stated in information posted on the agency’s website.

“The bank’s rating reflects potential support from its parent company, Turkiye Is Bankasi A.S. The Shareholder Support Rating has been set at ‘b+’.

The holding bank's willingness to provide support to its subsidiary remains high due to 100% ownership, the use of a single brand, a high degree of integration, and the relatively small size of Isbank Georgia. However, the ability to provide support is limited by the long-term rating of Turkiye Is Bankasi itself—‘BB-’.

Isbank Georgia’s rating is one notch below that of its parent bank, reflecting the subsidiary’s operations in a strategically important but not key and relatively small market. A potential sale of the Georgian bank would not have a significant impact on the group’s position,” the agency reports.

The agency did not assign the bank a Viability Rating, noting its high level of integration with its parent company in the areas of governance, strategy, and risk management: “As of the end of the first quarter of 2026, Isbank Georgia’s assets totaled $230 million, which represents 0.2% of Turkiye Is Bankasi’s assets.”

According to Fitch, the bank adheres to a more conservative risk management policy compared to most local banks: “Its main clients are the largest Georgian companies and Turkish firms operating in Georgia. As of the end of 2025, loans to the construction, real estate, and hospitality sectors accounted for 8% of the total loan portfolio, while retail lending remained limited. The dollarization of the loan portfolio reached 59%, which is in line with the average for the corporate segment of the country’s banking system.”

Fitch also highlights the high concentration of the loan portfolio: loans accounted for 52% of the bank’s assets, while corporate bonds accounted for 13%. The five largest borrowers accounted for 36% of the loan portfolio: “At the same time, the share of Stage 3 loans as of the end of the first quarter of 2026 stood at 0.3%, while Stage 2 loans accounted for 0.2%.”

"The Common Equity Tier 1 (CET1) capital adequacy ratio at the end of the first quarter of 2026 reached 26.3%, while the total capital adequacy ratio stood at 28.5%. The latter was supported by Tier 2 subordinated debt provided by the parent bank in the first quarter of 2026 to finance the growth of the loan portfolio.

“The bank’s main sources of funding are customer deposits, which account for 59% of liabilities, as well as borrowings from the parent bank (18%),” Fitch reports.

The agency also notes a high concentration in the deposit base: the three largest customers account for 57% of total customer deposits. At the same time, the agency points out that this risk is partially offset by a liquidity buffer amounting to 33% of assets, long-term relationships with key customers, and the ability to obtain liquidity support from the parent bank.