Bank of Georgia Group Plc ((GB:BGEO)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Bank of Georgia Group Plc was marked by a positive sentiment, highlighting significant achievements in profitability, economic resilience, and digital banking advancements. The strategic growth from the Ameriabank acquisition was a key highlight, although challenges such as geopolitical tensions and capital concerns in Armenia were acknowledged.
Record Adjusted Profit
Bank of Georgia Group Plc reported a record adjusted profit of GEL 1.8 billion for the full year, marking a 32% increase compared to 2023. This impressive performance was accompanied by a return on equity of 30%, showcasing the company’s robust financial health.
Strong Macroeconomic Performance
The Georgian economy demonstrated remarkable resilience with a 9.5% year-on-year growth, while Armenia’s economy grew by 5.9%. Despite facing geopolitical challenges, both economies have shown strong performance, contributing positively to the Group’s overall success.
Digital Banking Achievements
The Group’s digital banking efforts were recognized globally, as it was named the world’s Best Digital Bank by Global Finance. The company saw significant growth in its mobile application users, with a 17.5% increase in individual users and an 18.9% rise in business users, reflecting its successful digital transformation.
Acquisition of Ameriabank
The consolidation of Ameriabank, Armenia’s leading bank, has been a strategic move for the Group, contributing 26% to the total assets. Ameriabank’s standalone profitability was reported at GEL 411 million, underscoring its valuable addition to the Group.
Loan Portfolio Growth
The Group’s loan portfolio in Georgia grew by 19%, while Ameriabank experienced a growth of over 30%. This robust growth in the loan portfolio highlights the Group’s strong market position and effective financial strategies.
Shareholder Returns
Bank of Georgia Group Plc announced a dividend per share of GEL 9 and a new buyback of GEL 107.7 million. The company has managed to reduce its share count by almost 10% over the last three years, reflecting its commitment to delivering value to shareholders.
Geopolitical Tensions Impact
Geopolitical tensions have impacted the Group, causing a slowdown in mortgage issuances and growth on payment terminals in Georgia during December. This highlights the challenges faced by the company in navigating external uncertainties.
Slight Margin Decline in Georgia
The net interest margin in Georgia declined by 30 basis points in Q4, attributed to holding higher liquidity amid uncertainties. This cautious approach reflects the Group’s strategy to maintain financial stability.
Capital Buffers in Armenia
Concerns were raised regarding the slim capital buffer on total capital in Ameriabank. Efforts are underway to issue Tier 1 instruments to improve this situation, indicating the Group’s proactive approach to addressing capital concerns.
Forward-Looking Guidance
Looking ahead, Bank of Georgia Group Plc has set a positive outlook for 2024, with expectations of continued strong financial performance. The Group aims to maintain its record adjusted profit levels and robust loan portfolio health, while projecting economic growth to stabilize at around 5% in both Georgia and Armenia. The company also plans to further enhance its digital banking capabilities, building on its global recognition.
In summary, the earnings call for Bank of Georgia Group Plc was characterized by a positive sentiment, driven by record profits, strong economic performance, and digital banking achievements. Despite facing challenges such as geopolitical tensions and capital concerns, the Group remains optimistic about its future prospects, with strategic plans in place to sustain its growth trajectory.