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.