- Georgian lender Bank of Georgia has announced a return to profit in the second quarter, with the largest impact from the Covid-19 crisis felt in the retail banking business.

The bank reported a pre-tax profit in the second quarter of GEL 123,154, up 1.8% year on year, while first half 2020 pre-tax profit tumbled 95.8% year on year to GEL 10,179 following a loss in the first quarter of the year.

It said that client deposits increased significantly by 6.9% during the second quarter and that this demonstrated that the immediate outflow of customer funds in March 2020, was a 'temporary response' to the COVID-19 outbreak shock, which quickly stabilised.

Its retail banking business was impacted by the slow-down of economic activity on the back of the government's lock-down restrictions, temporary closure of the express branches, temporary removal of fees on transactions through digital channels and slower lending activity.

Bank of Georgia announced that it delivered 'resilient' operating income before cost of risk of GEL 134.6mln during the second quarter of 2020 and GEL 303.4mln in the first half of 2020.

Its net interest margin was significantly down in the second quarter and the first half of 2020, primarily driven by declines during April and May, which it attributed to the significant reduction in retail lending activity and high levels of liquidity during the quarter.

Chief executive Archil Gachechiladze said: 'Our performance during the second quarter of 2020 has been extremely resilient, delivering strong profitability during a time when the Georgian economy has experienced its worst reduction in economic activity for more than a few decades.'

At 9:27am: [LON:BGEO] Bank Of Georgia Group PLC share price was -18.5p at 786.5p

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