Why China is setting its sights on Georgia’s banks

Georgia’s banking sector continued to expand in the first quarter of 2026, driven primarily by growth in consumer lending. The quarter’s biggest corporate development was the acquisition of Liberty Bank, the country’s third-largest lender by assets, by China’s Basis Bank, ranked fourth. Once the merger is completed, the combined institution is expected to control more than 10% of the banking system’s assets, although it will remain well behind Georgia’s two dominant banks.

Read also: How a Chinese bank unit came to lead Kazakhstan’s deposit growth.

Total assets held by Georgian commercial banks increased 0.6%, or 669 million Georgian lari ($254 million), during the first quarter, reaching 108 billion lari (about $41 billion), according to Kursiv Research estimates based on data from the National Bank of Georgia.

Liquid assets declined by 1.6 billion lari ($607 million), including a 941 million lari ($357 million) reduction at Bank of Georgia, the country’s largest lender. According to the bank’s financial statements, the decrease reflected repayment of borrowings, which fell by 1.7 billion lari ($645 million) during the quarter.

Two digital banks — HashBank and Paysera — reported losses during the quarter. Both institutions currently operate under a regulatory sandbox framework that allows them to accept deposits, process money transfers and offer cryptocurrency-related services but limits their lending activities. Those restrictions are expected to be lifted once the banks increase their capital to the standard 50 million lari requirement and demonstrate sustainable business models.

Landmark acquisition reshapes the market

The defining event for Georgia’s banking sector in the first half of 2026 was the sale of Liberty Bank.

The transaction closed in April. The seller was investment firm Hunnewell Partners, while the buyer was Basis Bank, owned by China’s Hualing Group.

According to the Georgian Stock Exchange, the purchase price was 674 million lari ($251 million). The figure excludes dividends distributed to former Liberty Bank shareholders, estimated at as much as 158 million lari ($59 million). Irakli Rukhadze, chairman of Liberty Bank’s supervisory board, declined to disclose the transaction’s total value. Market estimates place it at roughly 860 million lari ($330 million).

Negotiations began about a year earlier, amid speculation that Rukhadze could face international sanctions. In addition to Liberty Bank, he also owned the pro-government television broadcaster Imedi TV. In February 2026, Rukhadze and his partners at Hunnewell Partners announced the sale of Imedi TV and GDS TV.

Complementary business models

Basis Bank has traditionally focused on corporate banking, leasing and insurance, while Liberty Bank has built one of Georgia’s strongest retail franchises.

Liberty operates the country’s largest branch network, with about 500 branches and 700 ATMs, serving approximately 1.7 million retail customers. Its business model centers on high-yield microloans, including loans secured by pension payments. The bank also distributes government payments to roughly 888,000 pension recipients and 700,000 social benefit recipients.

Liberty Bank will continue operating under its existing brand until the merger is completed, which is expected by the end of 2026.

By investing an estimated $330 million, Basis Bank transformed itself into a universal bank through a single acquisition.

The deal received a favorable assessment from Fitch Ratings, which revised Basis Bank’s outlook to Positive from Stable while affirming its ‘B+’ Long-Term Issuer Default Rating. Fitch said the acquisition should strengthen the combined group’s credit profile by significantly expanding its scale and improving its competitive position.

Market leaders remain firmly ahead

Following the merger, the combined assets of Basis Bank and Liberty Bank totaled 11.4 billion lari ($4.3 billion) as of April 1, representing approximately 10.5% of Georgia’s banking sector.

Even so, the country’s two largest banks — Bank of Georgia and TBC Bank — continue to dominate the market, together controlling more than 75% of total banking assets.

After the merger is completed, the number of licensed banks in Georgia will decline to 18.

Kazakhstan’s Freedom Bank eyes Georgia

The number of banks could increase again if Kazakhstan’s Freedom Bank enters the Georgian market.

In the fall of 2025, the bank received approval from Kazakhstan’s financial regulator to establish a subsidiary in Georgia. In April 2026, Natia Turnava, governor of the National Bank of Georgia, said she hoped the project would move forward. Turnava said Freedom Bank remains in close talks with the regulator as it readies the application documents for its banking license.

The planned expansion is part of the broader international strategy of Freedom Holding Corp. In 2026, the company also applied for a banking license in France and is nearing completion of its acquisition of Turkish Bank in Turkey.

Across these markets, Freedom intends to develop an integrated digital ecosystem combining banking, brokerage and lifestyle services within a single SuperApp. The company believes that building a unified digital platform will allow it to compete more effectively with established retail financial institutions in new markets.