S&P Global Ratings on Aug. 3 assigned JSC Cartu Bank B/B long- and short-term counterparty credit ratings with a stable outlook.
Georgia's sixth-largest lender has strong capital levels and earnings, as shown by its projected risk-adjusted capital ratio of over 10%, but its asset quality is worse than that of other local banks, with nonperforming loans constituting 13.6% of its loan book at the end of 2016, S&P noted.
The rating agency also pointed to Cartu's weak risk position, with significant exposure to construction projects and acquisition finance. The bank also has high individual loan concentrations, although this risk is somewhat offset by its high level of capitalization, S&P said.
The stable outlook reflects the agency's view that the bank will maintain its strong capitalization over the next 12 months to 18 months while gradually developing its lending activities in Georgia.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.