Lion Finance Group Plc (LON:BGEO), formally Bank of Georgia Group, has announced the Group’s preliminary unaudited consolidated financial results for the fourth quarter and the full year 2024. Unless otherwise noted, numbers in this announcement are given for 4Q24 and FY24, the year-on-year comparisons are with figures of 4Q23 and FY23 that are adjusted for one-off items and the q-o-q comparisons are with 3Q24 figures.
The information in this Announcement in respect of the full year 2024 preliminary unaudited results, which was approved by the Board of Directors on 24 February 2025, does not constitute statutory accounts within the meaning of Section 434 of the UK Companies Act 2006. The statutory accounts for the year ended 31 December 2023 have been filed with the Registrar of Companies, and the audit reports were unqualified and contained no statements in respect of Sections 498 (2) or (3) of the UK Companies Act 2006. The audited consolidated financial statements for the year ended 31 December 2024 will be included in the Annual Report and Accounts expected to be published in April 2025, which will be filed with the Registrar of Companies following Lion Finance Group PLC’s Annual General Meeting.
The results are based on UK adopted international accounting standards, are unaudited and derived from management accounts.
Earnings call on 25 February 2025, 14:00 GMT – https://bankofgeorgia.zoom.us/j/98823247870
Webinar ID: 988 2324 7870
Passcode: 230839
Segmentation guide
Following the acquisition of Ameriabank at the end of March 2024, the Group’s results are presented by the following Business Divisions: 1) Georgian Financial Services (GFS), 2) Armenian Financial Services (AFS), and 3) Other Businesses.
· GFS mainly comprises JSC Bank of Georgia and the investment bank JSC Galt and Taggart
· AFS includes Ameriabank CJSC
· Other Businesses includes JSC Belarusky Narodny Bank (BNB), which serves retail and SME clients in Belarus; JSC Digital Area, a digital ecosystem in Georgia including e-commerce, ticketing, and inventory management SaaS; Lion Finance Group PLC, the holding company; and other small entities and intragroup eliminations.
Lion Finance Group PLC delivers 4Q24 adjusted unaudited consolidated profit of GEL 504.7m and FY24 adjusted unaudited consolidated profit of GEL 1,813.0m
The Group posted adjusted ROAE of 29.6% in 4Q24 and 30.0% for the full year of 2024.
· The Group’s loan book increased by 65.9% y-o-y as at 31 December 2024 to GEL 33,558.9m, driven by strong growth of both Georgian and Armenian businesses, as well as the Ameriabank consolidation effect.
· As at 31 December 2024, Bank of Georgia’s Digital MAU among retail customers amounted to 1.6 million individuals (up 17.5% y-o-y), while Ameriabank’s – 232 thousand individuals (up 54.4% y-o-y). Upside in Armenia remains a top priority.
· The Board intends to recommend a final dividend of GEL 5.62 per share for 2024 at the 2025 Annual General Meeting, bringing the total dividend for 2024 to GEL 9.00 per share – an increase of 12.5% compared with 2023. In addition, the Board has approved a further GEL 107.7m share buyback and cancellation programme.
CEO statement
We have recently changed the Company name from Bank of Georgia Group PLC to Lion Finance Group PLC to better reflect the Group’s broader geographical presence, following the acquisition of Armenia’s largest bank, Ameriabank, in 2024. While the Company has adopted a new name, its principal operating entities – Bank of Georgia in Georgia and Ameriabank in Armenia -continue to serve customers under their well-recognised top-of-mind banking brands in their respective markets.
Political developments in Georgia have been top-of-mind recently, but the economy has continued to be robust throughout the uncertainties, and Bank of Georgia continues to operate as usual. Our baseline expectation for real GDP growth remains c.5% for 2025, on top of the 9.5% economic growth achieved in 2024.
In this environment, Bank of Georgia maintained higher-than-usual liquidity levels, reinforcing resilience while resulting in associated costs, which slightly drove down the net interest margin in the fourth quarter, while the core lending margin remained stable. That said, Georgian Financial Services delivered a strong full-year performance. The loan book grew by 19.3% y-o-y in constant currency, underpinned by sustained demand across segments. Operating income growth was solid at 11.5% y-o-y for the full year. Asset quality remained robust, with cost of credit risk for the full year at 0.4%. This translated into a record profit of GEL 1.6bn (up 14.9% y-o-y), with ROAE standing at 33.5%. Bank of Georgia further strengthened its customer franchise, achieving a 17.5% y-o-y growth in retail Digital MAU and record-high Net Promoter Scores in 2024.
While the Georgian business had a strong performance, our Armenian business, now accounting for 25.6% of total assets, did even better in terms of customer franchise growth since the consolidation date. The team in Armenia remains focused on expanding its product offerings and accelerating digital transformation, with enhancements in digital channels driving higher digital engagement and a remarkable retail Digital MAU y-o-y growth of 54.4% and q-o-q growth of 23.5%. On a standalone basis, loans were up 31.6% y-o-y and deposits up 22.3% y-o-y in constant currency as at 31 December 2024. Ameriabank’s standalone FY24 profit, which is not consolidated into Group results, was GEL 416.1m – this better reflects the full-year performance and scale of the Armenian business.
We remain optimistic about the Armenian growth story. The recent signing of the Charter on Strategic Partnership between Armenia and the US, ongoing EU visa liberalisation talks, and the Armenian government’s approval of a bill to initiate its EU accession bid all reinforce the country’s positive outlook. Armenia’s real GDP grew by 5.9% in 2024, and with ongoing structural reforms expected to further enhance the resilience and capacity of the Armenian economy, the IMF projects real GDP growth of 4.9% in 2025.
Overall, the Group achieved a record consolidated profit (adjusted for one-off items) of GEL 1.8 billion for the full year 2024, with an adjusted ROAE of 30.0%. In light of the Group’s strong performance, the Board intends to recommend a final dividend of GEL 5.62 per share for 2024 at the 2025 Annual General Meeting, bringing the total dividend for 2024 to GEL 9.00 per share – an increase of 12.5% versus 2023. Additionally, the Board has approved a further share buyback and cancellation programme of GEL 107.7 million. This brings the overall dividend and share buyback payout ratio for 2024 to 31%, calculated on adjusted EPS, in line with our capital distribution policy.
2024 was an outstanding year for the Group. Key achievements included the landmark acquisition of Ameriabank, the successful issuance of a US$ 300,000,000 Additional Tier 1 perpetual bond by Bank of Georgia, and Bank of Georgia being named the World’s Best Digital Bank 2024 by Global Finance. Moving into 2025, we remain focused on driving strong customer franchise growth and high profitability across our main markets.
Jefferies set a target price of 5,900 GBX for the company, which when compared to the Bank of Georgia Group PLC share price of 5,130 GBX at opening today (07/03/2024) indicates a potential upside of 15.0%. Trading has ranged between 2,218 (52 week low) and 5,190 (52 week high) with an average of 83,730 shares exchanging hands daily. The market capitalisation at the time of writing is £2,296,832,804.
Bank of Georgia Group PLC is a United Kingdom-based holding company that provides banking, leasing, brokerage, and investment management services to corporate and individual customers. The Company’s Retail Banking segment provides consumer loans, mortgage loans, overdrafts, credit cards and other credit facilities, funds transfers and settlement services, and handling of customers deposits for both individuals and legal entities. Its Corporate Investment Banking segment comprises corporate banking and investment management operations in Georgia. Corporate Banking provides loans and other credit facilities, funds transfers and settlement services, trade finance services, documentary operations support and handles savings and term deposits for corporate and institutional customers. The Investment Management business provides brokerage services through Galt & Taggart. Its BNB segment comprising JSC Belarusky Narodny Bank, which provides retail and corporate banking services in Belarus.
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Jefferies set a target price of 5,900 GBX for the company, which when compared to the Bank of Georgia Group PLC share price of 4,745 GBX at opening today (01/03/2024) indicates a potential upside of 24.3%. Trading has ranged between 2,218 (52 week low) and 4,965 (52 week high) with an average of 75,370 shares exchanging hands daily. The market capitalisation at the time of writing is £2,256,501,603.
Bank of Georgia Group PLC is a United Kingdom-based holding company that provides banking, leasing, brokerage, and investment management services to corporate and individual customers. The Company’s Retail Banking segment provides consumer loans, mortgage loans, overdrafts, credit cards and other credit facilities, funds transfers and settlement services, and handling of customers deposits for both individuals and legal entities. Its Corporate Investment Banking segment comprises corporate banking and investment management operations in Georgia. Corporate Banking provides loans and other credit facilities, funds transfers and settlement services, trade finance services, documentary operations support and handles savings and term deposits for corporate and institutional customers. The Investment Management business provides brokerage services through Galt & Taggart. Its BNB segment comprising JSC Belarusky Narodny Bank, which provides retail and corporate banking services in Belarus.
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Jefferies set a target price of 5,900 GBX for the company, which when compared to the Bank of Georgia Group PLC share price of 4,395 GBX at opening today (22/02/2024) indicates a potential upside of 34.2%. Trading has ranged between 2,218 (52 week low) and 4,530 (52 week high) with an average of 64,747 shares exchanging hands daily. The market capitalisation at the time of writing is £2,047,920,122.
Bank of Georgia Group PLC is a United Kingdom-based holding company that provides banking, leasing, brokerage, and investment management services to corporate and individual customers. The Company’s Retail Banking segment provides consumer loans, mortgage loans, overdrafts, credit cards and other credit facilities, funds transfers and settlement services, and handling of customers deposits for both individuals and legal entities. Its Corporate Investment Banking segment comprises corporate banking and investment management operations in Georgia. Corporate Banking provides loans and other credit facilities, funds transfers and settlement services, trade finance services, documentary operations support and handles savings and term deposits for corporate and institutional customers. The Investment Management business provides brokerage services through Galt & Taggart. Its BNB segment comprising JSC Belarusky Narodny Bank, which provides retail and corporate banking services in Belarus.
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Bank of Georgia Group PLC (LON:BGEO) has announced the proposed acquisition of 100 per cent of a leading bank in Armenia, Ameriabank CJSC, for approximately $303.6 million. This acquisition will significantly enhance the Group’s presence and growth opportunities within a fast-growing and attractive market.
The Board and Management of Bank of Georgia Group PLC has announce that conditional agreement has been reached to acquire 100% of the total issued share capital of Ameriabank CJSC. BOGG believes that significant value can be derived from capitalising on opportunities within Armenia through this acquisition of a leading Armenian bank and by leveraging BOGG’s experience and expertise as it integrates Ameriabank into the wider Group. The Acquisition is conditional upon the approval of the Group’s shareholders and regulatory approvals.
Key highlights:
· The Group is set to acquire Ameriabank, a leading universal bank in Armenia, which has an attractive franchise, in an attractive market, with similar characteristics to Georgia.
· Significant upside potential from leveraging the Group’s existing customer focus and digital/payments capabilities.
· Approximately $303.6 million cash transaction fully financed by surplus capital of the Group at an attractive valuation; maximising shareholder return while preserving the strong capital ratios of JSC Bank of Georgia. Acquisition price of 0.65x net asset value as at 31 October 2023 and 2.6x P/E 2023.
· 90% of Ameriabank will be acquired upon completion of the Acquisition, with a 10% shareholding to be retained by the European Bank for Reconstruction & Development subject to a Shareholders’ (Put and Call Option) Agreement.
· No shareholder dilution expected for existing shareholders.[1] The Board and Management believe the Acquisition will be immediately EPS and RoAE accretive, with JSC BOG maintaining a strong capital position.
· It is intended that the BOGG Dividend and Capital Distribution Policy for the Enlarged Group, subject to trading and prospects being satisfactory, will remain unchanged with a target pay-out ratio in the range of 30-50% of annual profits
Mel Carvill, Chairman of the Board of Directors of Bank of Georgia Group PLC commented:
“This transaction is a significant milestone for the Group and a new chapter in our strategic development. Through Ameriabank we are set to enter Armenia, one of the fastest-growing economies in the region. Ameriabank has a well-regarded and experienced management team, and I am delighted that they will stay on after the transaction is closed.
The Board believes this transaction will enable the Group to substantially increase scale and unlock additional growth opportunities as our impressive results in digitalisation, payments and customer franchise growth can be applied to Ameriabank’s further development. This transaction is immediately earnings enhancing, using the Group’s existing cash resources, with no dilution for existing shareholders. The Board unanimously views it as an excellent opportunity to create more value for our shareholders.”
Archil Gachechiladze, Chief Executive Officer of BOGG commented:
“Today we announced the proposed conditional purchase of 100% of the shares in a leading universal bank in Armenia. Ameriabank is a growing and profitable bank, that is top of mind locally, with a strong customer franchise. We see Ameriabank as an attractive platform to increase scale and further grow our business by translating some of the successes that the Group has already delivered in the Georgian market. I would like to thank Ameriabank’s team for their cooperation, and I look forward to working with them to unlock growth opportunities in one of the best-performing economies in the region.”
Following the closing of the transaction and with Ameriabank on board, the Group also intends to change its name, marking a new chapter in its development, with two leading universal banks in attractive high-growth markets.
The Investor Presentation relating to the proposed Acquisition will be available shortly on the Group’s website at https://bankofgeorgiagroup.com/reports/presentations.
The Circular will be published by the Group in connection with the Acquisition in due course and any capitalised terms used in this Announcement and not otherwise defined shall have the meaning given to them in the Circular. The Circular will also be available in electronic form on the Group’s website at https://bankofgeorgiagroup.com/information/meetings.
BOGG’s Preliminary Results for the year-ended 31 December 2023 are expected to be published shortly after the BOGG General Meeting of Shareholders, to be held on 14 March 2024.
Analysts and Investors
A presentation and Q&A session for analysts and investors will take place at 11:00 am GMT on 19 February 2024 via conference call. To participate in the call please use the following dial-in details:
International dial-in numbers are available at: https://bankofgeorgia.zoom.us/u/aee4LLgZFN
Webinar ID: 958 9871 9653
Passcode: 816902
Background to and reasons for the Acquisition
The Board believes there is a compelling rationale for the Acquisition. The Board believes that Ameriabank is a good strategic fit to the Group and that the Acquisition is attractive as it is expected to provide significant commercial and financial benefits to the Group as outlined below:
The Armenian economy and banking sector have certain attractive characteristics similar to those in the Group’s current principal operating country, Georgia, and the Board considers this as an attractive market for expansion that fits very well with BOGG’s current footprint.
· High-growth economy with similar size and growth to Georgia: Armenia is a neighbouring country to Georgia of a similar size having a population of 3.0 million and nominal GDP of USD 20 billion as of 2022 according to the IMF compared to the 3.7 million population and USD 25 billion nominal GDP of Georgia in the same time period. According to the World Bank, the Armenian economic environment enjoys sound macroeconomic policies, including active inflation targeting, adherence to a fiscal rule, and sound financial sector oversight. The IMF also notes that the flexible exchange rate has served Armenia well in absorbing external shocks, while building reserve buffers. The foregoing has contributed to the Armenian economy demonstrating attractive growth rates, with real GDP having grown at c.5% on average per annum since 2018, which is in line with the real GDP growth rates reported by Georgia during the same period as per IMF. Similar to Georgia, Armenia is expected to continue delivering strong economic growth with expected real GDP growth rates of c.5% per annum over the next few years, according to the IMF World Economic Outlook October 2023.
· Supportive environment for further growth due to low banking sector penetration: The overall Armenian economy is generally less leveraged when compared with the Georgian economy, with loans to households at 23.7% of GDP and loans to legal entities at 23.4% of GDP as at 31 December 2022, according to the estimates based on the Armenian Central Bank and Statistical Committee data (compared with 33.3% and 28.2%, respectively, in Georgia, according to the National Bank of Georgia and the National Statistics Office of Georgia), creating a supportive environment for further banking sector growth in coming years as the economic and banking sector growth would potentially converge to the levels of Georgia.
· Financially prudent banking sector with low market share concentration levels offering scope for further consolidation: The Armenian banking sector demonstrates broadly strong indicators of financial soundness, including capital adequacy and non-performing loan ratios, according to IMF 2022 data. This resembles the Georgian banking sector from a financial soundness perspective, but at the same time the banking sector in Armenia is significantly more fragmented with 18 commercial banks operating in the country. The top three Armenian banks (including Ameriabank) held a market share of 43.1% of total assets as at 31 December 2022 according to CBA. This presents further consolidation opportunities for the Group in addition to the organic growth of the market.
Ameriabank is one of the leading universal banks in Armenia and has an attractive franchise with significant upside potential from leveraging BOGG’s customer focus and digital capabilities.
· Market leading position in corporate segment and increasing market share in retail segment boosted by improving digital offerings: Ameriabank is a highly attractive franchise displaying many complementary characteristics to the Group. It has a leading #1 market position in Armenia based on loan portfolio size (19.6% market share) and #2 market position based on the deposit portfolio[2] size (17.3% market share) as at 31 December 2023. The strength of its deposit franchise is demonstrated by the continuous growth of its customer deposits, with a CAGR of 19.6% during 2020-2022. Ameriabank also has a particularly strong foothold in the corporate segment, being a market leader with #1 market position (22.5% market share) in loans to legal entities as at 31 December 2023. Further, Ameriabank has been very successful in growing its retail franchise in recent years supported by continued developments in its digitalisation, which allowed it to grow its market share in loans to individuals from 9.8% in 2018 to 15.6% as at 31 December 2023.
· Well-managed bank with prudent risk policies and strong profitability track record: Ameriabank has a strong financial profile, with capital and liquidity ratios above their minimum regulatory requirements. Its LCR and NSFR ratios are also significantly above their minimum regulatory requirements. Ameriabank has also adopted adequate credit risk management policies with suitable coverage ratios.
· Significant additional growth potential of Ameriabank within BOGG by using the Group’s experience and know-how in retail products, digitalisation and payment business: The Board believes that Ameriabank has significant growth potential and further scope to improve commercial performance, particularly in retail. This is expected to be achieved by combining Ameriabank’s existing franchise strengths with the Group’s expertise, stemming from BOGG’s proven track record and leading digital products and payments capabilities. Although Ameriabank is a leading player in its own market, it had fewer than 420,000 individual customers as at 31 December 2023 (out of a population of approximately 3.0 million). The Board believes that there is a significant scope for growth in this area, and that the Group’s existing assets and infrastructure will enable it to realise these potential growth benefits, as the Group has already proven in Georgia. Ameriabank is also one of the leading payments acquirers in Armenia, with further potential upside on the back of the Group’s strong expertise in this area, as well as supported by favourable market fundamentals, as the Armenian economy is predicted to become increasingly cashless over the next few years.
The side-by-side comparison of the number of customers and the levels of digitalisation of BOGG and Ameriabank based on management data as at and for the nine months ended 30 September 2023 is presented below:
BOGG1
Ameriabank CJSC
Number of customers, individuals, thousands (Sep-23)……………………………………………………………………………………
1,7392
392
Number of customers as % of population3, (Sep-23) ..
47%
15%
Digital MAU as % of total customers, individuals (Sep-23)……………………………………………………………………………………
73%2
34%
Share of digital banking4 transactions in total transactions, (for the 9 months ended September 2023)..
63%
48%
Notes:
(1) Includes the Georgian banking subsidiary only
(2) Monthly active clients are stated
(3) Based on population data provided by the IMF as of December 2022. 2.96 million in Armenia and 3.67 million in Georgia
(4) Including transactions via mobile / internet banking
· Well-regarded and experienced management team to stay on after the Acquisition: Ameriabank has been run by a professional and experienced management team. It has also operated with well-established corporate governance practices and a well-defined focus on ESG principles. The management team, including the Chairman of the Ameriabank Board, has agreed to remain in the business and run Ameriabank for at least 18 months following the closing of the Acquisition.
The Acquisition offers multiple strategic benefits to BOGG allowing it to diversify its revenue streams, unlock further growth potential and increase scale. The Acquisition alsohas a strong financial rationale that fulfils strict internal financial criteria set by BOGG and is expected to result in significant value creation for Shareholders.
· Following years of dynamic growth, the Group has achieved leading market share in Georgia and an expansion geographically unlocks further growth potential beyond the local Georgian market: By focusing on its strategic priorities, BOGG has already achieved significant customer franchise growth and strong results and currently operates with c.40% market share in Georgia. While Georgia continues to offer an attractive growth profile with further benefits and potential revenue streams to be unlocked with increasing digitalisation and economic development, BOGG operates in a market where its market leadership is already well-established, and the Board believes that the Acquisition will offer the opportunity for the Enlarged Group to grow further with Ameriabank’s market share opportunities still not fully realised and where BOGG’s experience could help it boost its market position going forward.
· Acquisition would significantly increase the scale of the Group and diversify its business: The Acquisition would facilitate a significant increase in the scale of the Group and, as a result, Ameriabank would represent a meaningful part of the Enlarged Group after the transaction completes. The following table sets forth certain financial information for BOGG and Ameriabank side by side as at and for the nine months ended 30 September 2023:
As at and for the nine months ended 30 September 2023
BOGG
Ameriabank CJSC
GEL million
Net loans……………………………………………………………….
19,011
6,085
Assets…………………………………………………………………….
30,850
8,973
Deposits…………………………………………………………………
21,744
6,012
Net Income……………………………………………………………
1,067
230
Notes:
Financial information for BOGG is taken from the 9 months ended September 2023 IFRS results as reported by BOGG and the financial information for Ameriabank is taken from the 9 months ended September 2023 IFRS results as reported by Ameriabank. The NBG’s official exchange rate of AMD/1000:GEL 6.7049/6.7446 (avg/eop) for the nine months ended 30 September 2023 was used for conversion
· Acquisition expected to have an immediate accretive impact on BOGG’s EPS and to boost RoAE: In addition to the standalone financial strengths of Ameriabank, the Board and Management expect the Acquisition to have an immediately positive impact on BOGG’s financial profile and outlook.
· Ameriabank has been a profitable franchise throughout the cycle: Ameriabank represents a profitable franchise that has reported positive net income throughout the cycle (including during COVID-19 and in the aftermath of the Russian invasion of Ukraine), has delivered double-digit RoAE in four out of five prior years and reported RoAE of 29.6% in 2022.
· Cash transaction using surplus capital of the Group at an attractive valuation; maximising shareholder return while preserving the strong capital ratios of JSC BOG: At an Acquisition price of 0.65x net asset value with reference to net asset value as at 31 October 2023, implying a 2.6x P/E[3] based on Ameriabank’s reported preliminary results for the full year 2023, the Board believes that the Acquisition has been agreed at an attractive price given the immediate earnings enhancement and potential opportunities afforded by the Acquisition. The transaction is being financed by existing cash, deploying surplus capital, while allowing JSC BOG to maintain capital ratios comfortably above the minimum requirements. No equity issuance is required and thus there is no dilution for existing Shareholders.[4]
In summary, the Board believes that the Acquisition has a strong strategic and financial rationale that meets its strict internal financial criteria.
Armenia is a neighbouring country to Georgia of a similar size and with similar culture, making it an attractive market for the Group to expand into. The Board believes that by acquiring one of the leading banks in the Armenian market the Group will add another strong revenue-generating platform with the expectation of increased earnings potential for the Group in the short, medium and long term.
The Acquisition allows BOGG to diversify its profile by obtaining a franchise with a critical mass and strong brand awareness (Ameriabank is the top-of-mind bank in Armenia[5]), operating in a market that is attractive given its relevant size, macroeconomic situation and lower banking penetration levels compared to other developing countries. Ameriabank would also further complement BOGG’s existing profile as BOGG’s market leading position in Georgia would be supported by a leading financial institution in Armenia with #1 market position, based on loan portfolio size. BOGG’s strong profitability profile would further benefit from Ameriabank’s attractive financial track-record and outlook with expected EPS accretion and a boost in RoAE of BOGG in 2024 following the Acquisition. Additionally, BOGG sees significant opportunity for growth and enhanced profitability of Ameriabank with potential to develop its retail and SME franchises, further digitalisation and improved operational efficiency which could be achieved by leveraging the extensive experience and know-how of BOGG.
Financial Effects of the Acquisition
The Group expects that the Acquisition will generate significant value for Shareholders, through enhanced growth prospects, as detailed above.
The impact of the Acquisition on the capital ratios of the Group’s current largest banking operation, JSC BOG, has been estimated as 1.0-1.1%. JSC BOG’s capital ratios are expected to remain comfortably above the minimum regulatory requirements of the National Bank of Georgia following the Acquisition.
Following the Acquisition, and subject to the Enlarged Group’s trading and prospects being satisfactory, it is intended that the BOGG Dividends and Capital Distribution Policy will remain unchanged with a target pay-out ratio in the range of 30-50% of annual profits.
As mentioned above, the Acquisition is expected to have an immediate accretive impact on BOGG’s EPS, and to boost RoAE.
Transaction Timetable and Conditionality
The Acquisition constitutes a Class 1 transaction for BOGG under the Listing Rules. Accordingly, the approval of BOGG Shareholders is required and will be sought at the General Meeting expected to take place on 14 March 2024 (see Expected Timetable of Principal Events below). The Circular containing the notice convening the General Meeting will be published in due course. In addition, the Acquisition is subject to the satisfaction of other conditions including receipt of regulatory and anti-trust approvals.
The timing of the satisfaction of certain of the conditions to Completion is uncertain given the involvement of relevant regulators, but it is currently expected that Completion will occur in the first quarter of 2024.
Expected Timetable of Principal Events
All times shown are London times unless otherwise stated. All dates and times are based on the current expectations of BOGG and are subject to change, which will depend, among other things, on the date on which the Conditions to the Acquisition are satisfied or, where applicable, waived. If any of the dates and/or times in this expected timetable change materially, the revised dates and/or times will be notified to Bank of Georgia Group Shareholders by announcement through the Regulatory Information Service of the London Stock Exchange.
Event
Time and Date
Publication and posting of the Circular, the Notice of General Meeting and the Form of Proxy
19 February 2024
Latest time and date for receipt of Form of Proxy, CREST Proxy Instructions and electronic registration of proxy appointment
11:00 a.m. on 12 March 2024
Record Time for entitlement to vote at the BOGG General Meeting
6:00 p.m. on 12 March 2024(1)
General Meeting
11:00 a.m. on 14 March 2024
Expected date of Completion of the Acquisition (subject to BOGG Shareholder approval)
On the third Business Day after the General Meeting(2)
Notes:
(1) If the General Meeting is adjourned, the Record Time for the adjourned General Meeting will be 6:00 p.m. (UK time) on the date which is not later than 48 hours, excluding non-working days, before the date set for the adjourned General Meeting
(2) Subject to the satisfaction or (if capable of waiver) waiver of the Conditions
Bank of Georgia Group PLC (LON:BGEO) at its AGM held on 19 May 2023, shareholders approved the payment of a final dividend of GEL 5.80 per ordinary share payable on 14 July 2023 (payment date) in Pound Sterling to those shareholders of the Company on the register of members at the close of business on 30 June 2023 (record date).
The Company hereby confirms that the National Bank of Georgia’s Georgian Lari/British Pounds Sterling average exchange rate for the period of 26 June to 30 June 2023 was 3.3360 and it shall be used to pay dividends to ordinary shareholders of the Company on 14 July 2023.
Those shareholders who have not provided the appropriate bank account details to Computershare Investor Service PLC for payment of the dividend will be paid the dividend by cheque in Pound Sterling.
Bank of Georgia Group PLC is a FTSE-250 company. Its core entity is JSC Bank of Georgia, a digital banking leader in Georgia that provides a suite of banking and financial services to retail clients and businesses. By building on its competitive strengths, the Group is committed to delivering strong profitability sustainably and maximising shareholder value.
Bank of Georgia Group plc (LON:BGEO) state today that The National Bank of Georgia, its banking regulator, has announced that it has introduced an updated supervisory plan for the Georgian banking sector. The initiatives under the revised supervisory plan are aimed at alleviating the negative financial and economic challenges created by the global COVID-19 pandemic in Georgia. The measures, which have been introduced with immediate effect, are mainly focused on capital adequacy and liquidity initiatives that allow banks to use existing buffers to support customers in the current financially stressed circumstances, to continue normal business activities as far as possible, and to support the economy through ongoing lending operations.
Capital adequacy initiatives:
Combined buffer – the conservation buffer requirement of 2.5% of risk-weighted assets reduced to 0% indefinitely;
The phase-in of additional credit portfolio concentration risk buffer (HHI) and net GRAPE buffer requirements on Common Equity Tier 1 (CET1) and Tier 1 capital, planned at the end of March, 2020, has been postponed indefinitely;
The possibility of fully or partially releasing the remaining requirements of Pillar 2 buffers (HHI, CICR, net GRAPE), if necessary, remains open.
Liquidity initiatives:
Liquidity coverage ratio (LCR) requirements (for local and foreign currency, as well as total requirement) may be revisited and reduced, if necessary;
Mandatory reserve requirements may be revisited and reduced, if necessary;
Eligibility criteria for repo-eligible securities may be revisited, if necessary, to support GEL liquidity.
Other initiatives:
The deadline for submitting previously planned stress testing results to NBG has been postponed until the end of May, 2020;
NBG will not impose any monetary sanctions in case of breach of economic normatives and limits driven by external factors (e.g. reserves, exchange rate deprecation);
All new regulatory changes and requirements postponed till September, 2020, or until further communicated by NBG. This does not apply to regulations with regard to open banking, XBRL reporting and resolution framework.
During the period the banks are allowed to partially or fully use the Pillar 2 and conservation buffers, the banks must not make capital distribution in any form.
Bank of Georgia Group’s capital adequacy ratios, funding and liquidity positions have been strong, and remain comfortably above the Bank’s minimum regulatory requirements. As of 29 February 2020, the Bank’s liquidity coverage ratio stood at 133.9% and net stable funding ratio at 130.9%, compared to the 100% minimum required level. The CET1, Tier 1 and total capital adequacy ratios were 12.2%, 14.2% and 18.6%, respectively, comfortably in excess of the respective minimum required levels of 10.2%, 12.2% and 17.1%. Following the just announced measures, the Bank expects CET1, Tier 1 and Total Capital adequacy minimum ratio requirements of 6.9%, 8.7% and 13.3%, respectively, as of 31 March 2020.
In addition, on 2 April 2020, the Bank drew-down the second tranche of the US$107 million subordinated syndicated loan facility signed in December, 2019, in the amount of US$55 million. This is expected to be treated as a Bank Tier 2 capital instrument under the Basel III regulation upon approval of the NBG and will further improve the overall capitalisation of the Bank.
Bank of Georgia Group PLC (LON: BGEO) announced today that its subsidiary, JSC Bank of Georgia has signed a EUR 50 million loan agreement with European Investment Bank with the maturity of up to 7 years. Up to 50% of the Facility can be drawn in Georgian Lari, while the remaining amount will be denominated in Euros or US Dollars. The local currency tranche is also supported by the Neighbourhood Investment Facility of the European Union. The purpose of the credit is to finance investment projects promoted by micro, small and medium sized (MSMEs) and mid-capitalisation enterprises (MidCaps) in Georgia and support the implementation of projects important for the local private sector development.
Archil Gachechiladze, Bank of Georgia CEO commented: “I am very glad to see that our second transaction with EIB since 2015 has been successfully completed. The multicurrency long-term facility gives us flexibility to utilise the funds according to the currency and maturity needs of our MSME and MidCap clients. Most importantly, it is in our discretion to use half of the funds in local currency lending, which strengthens our positions with the private sector as a leading lender of the long-term GEL denominated financial resources. I would like to thank EIB for their cooperation with us and look forward to having many more successful deals together in the future.”
“Support for economic development and smart, sustainable and inclusive growth is a key priority of the EU’s work with Georgia,” said EIB Vice-President Lilyana Pavlova. “As the EU bank, we are committed to supporting small and medium-sized businesses – and we need the help of local partners to do so. I am therefore happy that with Bank of Georgia, we are extending our cooperation with a strong existing partner of the EIB. SMEs play a significant role in Georgia’s economy and our transactions will pave the way for better business prospects for those companies and the country in general.”
Bank of Georgia Group (LON:BGEO) today announced the launch of Optimo – a digital solution for our customers to run their business sales and operations. The platform is designed to address the needs of micro, small and medium sized enterprises in optimising their day-to-day operations and better managing their businesses in general. Optimo’s cutting-edge digital solution, with integrated software and a rich variety of functions and analytical tools, enables businesses to easily access their most recent data on sales transactions, inventory, revenues and profitability, anytime and anywhere, and make timely decisions with relevant information at hand.
Archil Gachechiladze, the Group CEO commented: “I am very pleased to see that the Group’s support for MSMEs has extended to offering them superior digital solutions such as Optimo. In addition to being dedicated to designing the most needed financial products for MSMEs, we would like to further contribute to their success and development by offering them prompt and easy access to critical data on their businesses, as well as possible solutions to better manage their enterprises. Bank of Georgia Group’s aim with Optimo is to significantly improve and simplify the way MSMEs manage their business processes and help them focus on progress and future development.”
Bank of Georgia Group PLC (LON:BGEO) today announced that JSC Bank of Georgia has signed a one-year US$50 million Trade Finance Facility with Citi. The Facility has been arranged under the Continuing Agreement for Reimbursement of Trade Advances, signed with Citi in 2011, and is the third successful transaction between Citi and Bank of Georgia under this agreement. The Facility aims to enhance the Bank’s best-in-class offering of trade finance solutions for the Georgian corporate and small and medium sized sectors.
Archil Gachechiladze, Bank of Georgia CEO commented: “I am very glad to see that Bank of Georgia and our trusted partner Citi continue to actively cooperate on trade finance deals, which enable us to strengthen our position as a go-to bank for tailor-made trade finance products in Georgia. Facilities of this kind are important for our corporate, as well as SME clients that are actively engaged in export-import transactions and we aim to remain a reliable financial support for them.”
Bank of Georgia Group PLC (LON:BGEO) today announced that JSC Bank of Georgia and the European Bank for Reconstruction and Development have signed a c.GEL 28 million loan agreement with a maturity of 5 years. The facility aims to continue to provide the micro, small and medium sized enterprises the access to increasingly demanded local currency funding and to further support their alignment with the European Union’s Deep and Comprehensive Free Trade Agreement requirements. EBRD obtained the local currency funds through a private placement of GEL-denominated bonds arranged by Galt & Taggart – a wholly owned brokerage subsidiary of the Group. The local currency facility was designed to facilitate on-lending to the Bank’s clients solely in Georgian Lari.
Archil Gachechiladze, Bank CEO commented: “I am very pleased to see that EBRD has continued to be Bank of Georgia’s strong and reliable partner in providing local currency funding for our micro, small and medium sized business clients. This is our second cooperation with EBRD on a Georgian Lari denominated facility after a major success of our first 2-tranche programme in local currency launched in 2016. While de-dollarisation of the Georgian economy is gaining speed and scale, the local currency facilities of this kind are increasingly essential for us to continue to offer the most needed financial products to our business clients. We look forward to working with EBRD on many more successful local currency deals in the future.”
Bank of Georgia Group PLC (LON:BGEO) announced today that its subsidiary, JSC Bank of Georgia and the European Fund for Southeast Europe have entered into a US$10 million subordinated loan agreement with a maturity of 10 years. The subordinated loan facility qualifies for Tier II capital under the Basel III framework recently introduced in Georgia and will further improve the overall capitalisation of the Bank.
Archil Gachechiladze, Bank of Georgia CEO commented:
“I am pleased to see that our long-term partnership with EFSE has yielded our yet another transaction which is aimed at further improving our capital position under the Basel III regulations and will support further lending growth while maintaining strong capital ratios. This subordinated loan facility is our latest transaction, in 2019, dedicated to capital optimisation, following the issuance of US$100 million Additional Tier 1 Capital Notes, and the repayment of a US$65 million subordinated loan, earlier this year, to optimise our cost of funding. With an ever stronger and diversified capital structure, we are well-positioned to continue growing our customer lending in 2019 and beyond.”
Bank of Georgia Group PLC (LON:BGEO) announced the Group’s first quarter 2019 consolidated results. Unless otherwise noted, numbers in this announcement are for 1Q19 and comparisons are with 1Q18. The results are based on International Financial Reporting Standards (“IFRS”) as adopted by the European Union, are unaudited and derived from management accounts. This results announcement is also available on the Group’s website at www.bankofgeorgiagroup.com.
KEY RESULTS HIGHLIGHTS
§ Strong quarterly performance. Profit adjusted for one-off termination costs of the former CEO and executive management totalled GEL 112.2mln in 1Q19, with profitability remaining high at 24.5%5 ROAE
§ Solid Asset quality. NPLs to gross loans ratio was 3.3% at 31 March 2019, while the NPL coverage ratio was 92.2% and the NPL coverage ratio adjusted for discounted value of collateral increased to 132.6%. The cost of credit risk ratio stood at 1.7% in 1Q19, down 10bps y-o-y and up 60bps q-o-q. The q-o-q increase reflected normal seasonality, as well as recent regulatory changes on unsecured consumer lending
§ Loan book growth was 22.4% y-o-y and 1.8% q-o-q at 31 March 2019. Growth on a constant-currency basis was 14.7% y-o-y and 1.5% q-o-q. Retail Banking loan book share in the total loan portfolio was 70.0% at 31 March 2019 (69.5% at 31 March 2018 and 69.8% at 31 December 2018)
§ Strong capital position. Basel III Tier 1 and Total Capital Adequacy ratios stood at 12.7% and 17.1%, respectively, as of 31 March 2019, both above the minimum required level of 11.6% and 16.1%, respectively. Common Equity Tier 1 (CET1) ratio stood at 12.7%, compared to a 9.6% minimum requirement at 31 March 2019 and already above the estimated fully-loaded Basel III CET1 requirement for 2021
§ In 1Q19, JSC Bank of Georgia issued an inaugural US$100 million 11.125% Additional Tier 1 Capital Perpetual Subordinated Notes. Regulatory approval on the classification of these securities as Additional Tier 1 instruments was received in April 2019, therefore, the AT1 instruments were not reflected in the capital ratios reported as of 31 March 2019. This issuance has added approximately 230 basis points to the Bank’s Tier 1 capital ratio, which is also now above the estimated fully-loaded Basel III Tier 1 capital requirement for 2021
§ Retail Banking (“RB”) continued to deliver solid growth. RB’s operating income reached GEL 178.8mln in 1Q19, up 5.8% y-o-y and down 5.1% q-o-q. The Retail Banking net loan book reached GEL 6,389.6mln at 31 March 2019, up 23.2% y-o-y and up 2.0% q-o-q. The growth was predominantly driven by mortgage and micro and SME lending. At the same time, the RB client deposits increased to GEL 4,520.5mln at 31 March 2019, up 36.8% y-o-y and 4.2% q-o-q
§ Corporate Investment Banking (“CIB”) demonstrated strong growth in 1Q19, generating solid net interest income and net fee and commission income during the period, coupled with operating efficiencies and improved asset quality. CIB’s net loan book reached GEL 2,652.8mln at 31 March 2019, up 19.4% y-o-y and up 1.3% q-o-q. The growth on a constant-currency basis was 9.2% y-o-y and 0.8% q-o-q. The top 10 CIB client concentration was 9.1% at the end of 1Q19 (10.3% at 31 March 2018 and 9.8% at 31 December 2018)
§ Assets Under Management (“AUM”) within the Group’s Investment Management business, increased to GEL 2,371.0mln in 1Q19, up 29.1% y-o-y and up 4.4% q-o-q, reflecting an increase in client assets and bond issuances at Galt & Taggart, our brokerage subsidiary
§ De-dollarisation of the loan book and client deposits. Loan book in local currency accounted for 39.3% of the total book at 31 March 2019 (41.2% a year ago and 38.3% in the previous quarter). Client deposits in local currency represented 32.9% of the total deposit portfolio at 31 March 2019 (33.8% a year ago and 32.5% in previous quarter)
§ Remote channels. We have actively continued the further development of our digital strategy:
§ The Bank continued introducing new features to both our mobile banking application and our internet bank and introducing dedicated digital spaces in our branches to increase client penetration and incentivise offloading client activity to digital channels. As a result, the number of active internet and mobile banking users in 1Q19 reached 277,960 (up 16.5% y-o-y) and 382,152 (up 84.2% y-o-y), respectively. Both the number and volume of transactions through our mobile and internet banking continued to expand in 1Q19. In total, c.82% of daily banking transactions were executed through remote channels during first quarter of 2019
§ In 1Q19, the Bank released a brand new business internet banking platform (Business iBank) for MSME and corporate clients, which comes with many features designed to make its use an intuitive and smooth experience. We focused our efforts on making the Business iBank even more useful for business transactions, accounting, payments, money transfers, administration, which should further incentivise offloading client activity to digital channels
§ In 1Q19, the Group launched a cutting-edge full-service real estate digital platform that is unique in doing business in the Georgian real estate market. The platform offers a single space for the more convenient, timely and efficient interaction and information exchange to all stakeholders involved in buying, selling, renting, developing real estate in Georgia. We believe it is the most up-to-date, comprehensive and reliable offering in the Georgian real estate market and is the first platform to be fully integrated with the Bank to provide its users a “one-click” live credit limit appraisal and mortgage application experience. The Group aims to boost its mortgage portfolio by gaining access to and serving a new clientèle, and simultaneously offering value-added services to real estate developers and agencies
CHIEF EXECUTIVE OFFICER’S STATEMENT
In the first quarter of 2019, the Group delivered another period of good balance sheet and fee income growth, in the seasonally quiet first quarter of the year, combined with continued superior profitability. In addition, we have continued to build our fully integrated digital capacity; we improved our already strong capital position with the issuance of US$100 million Additional Tier 1 capital, and announced the strengthening of our executive management team. At the same time, the Bank has adopted a significant tranche of local regulatory changes and the Georgian economy has continued to achieve strong macro-economic growth.
Net profit for the quarter totalled GEL 102.0 million, despite the impact of GEL 10.2 million of one-off employee costs (net of income tax) related to termination benefits of former CEO and executive management members. Adjusting for these costs, net profit increased by 10.4% y-o-y to GEL 112.2 million, and the return on average equity was 24.5%. During the quarter, the Group delivered operating income of GEL 258.7 million, up 10.2% year-on-year, reflecting both customer lending growth and particularly strong levels of fee and commission income. Customer lending increased 22.4% over the last twelve months, and by 1.8% during the quarter, and we continue to expect c.15% customer lending growth for 2019.
During the quarter we actively continued the further development of our fully integrated digital strategy, an important focus for us as we seek to digitise our full banking platforms:
§ Introducing new features to both our mobile banking application and our internet bank and introducing dedicated digital spaces in our branches. As a result, the number of active internet and mobile banking users in 1Q19 reached 277,960 (up 16.5% y-o-y) and 382,152 (up 84.2% y-o-y), respectively;
§ Releasing a brand new business internet banking platform (Business iBank) for our MSME and corporate clients; and
§ Launching a cutting-edge full-service real estate digital platform that is unique in doing business in the Georgian real estate market. This is the first platform to be fully integrated with the Bank to provide users with a “one-click” live credit limit appraisal and mortgage application experience.
From a macro-economic perspective, the economy continued to perform well, with Georgia’s real GDP growth at 4.7% in 1Q19. External pressures continued to ease as goods exports, remittances and tourism all posted increases while imports declined. In the first three months of the year, inflation remained close to the National Bank of Georgia’s 3% target, and at 3.7% in March 2019. With subdued inflation expectations, the NBG cut the policy rate to 6.5% in 1Q19. Continued growth in external inflows enabled the NBG to purchase US$186 million in 1Q19. This lifted international reserves to US$3.5 billion as of 31 March 2019. Despite these FX purchases, the Georgian Lari remained relatively stable against US$ throughout the quarter. Notably, Georgia’s macro fundamentals remain strong with its track record of resilience to negative external developments. This was acknowledged by a one-notch sovereign credit rating upgrade from Fitch Ratings in February 2019 and an improved rating outlook from S&P in April 2019. Georgia’s economic resilience continues to be underpinned by its diversified economic base and external economic linkages, as well as prudent economic policy-making and a healthy banking sector.
Whilst individual product loan yields have remained broadly stable, our increasing focus on lending in the mortgage segment and to finer margin corporate and SME clients, has led to a negative mix effect on the net interest margin, which reduced by 20 basis points quarter-on-quarter to 5.8% at the Group level, and by 30 basis points in the Retail Bank. This shift in product mix, which we expect to continue at a slower rate during 2019, improves asset quality and, particularly in the case of the mortgage portfolio, reduces the risk-asset and capital intensity of our lending growth. Costs remain well controlled and, adjusting for impact of the one-off employee termination costs, the Group delivered positive operating leverage of 5.0 percentage points y-o-y, and improved its cost/income ratio to 35.5%.
Asset quality continues to be extremely robust, reflecting our good lending discipline and the ongoing strength of the economy. The annualised cost of risk ratio in the quarter was 1.7%, broadly reflecting a very strong performance in CIB (annualised cost of risk of 0.1%), which offset the impact of first quarter seasonality and the new regulatory changes in the Retail Bank (annualised cost of risk of 2.4%), as we have reduced our Express lending portfolio significantly. This process has now been largely completed, and we expect the Retail Bank cost of risk to return to more normal levels over the next few quarters. The NPLs to gross loans ratio was stable at 3.3% during the quarter, 20 basis points lower than a year ago and flat q-o-q. Provisions coverage ratios improved during the quarter, and we continue to expect asset quality and credit metrics to remain strong over the medium-term.
The Retail Bank continues to deliver strong franchise growth. Customer lending increased 2.0% during the traditionally quietest quarter of the year, and 23.2% over the last 12 months, at a time when we have been integrating significant regulatory changes to income verification procedures, and payment-to-income and loan-to-value ratios targeted to refocus retail lending towards the high quality secured mortgage portfolio and MSME lending. MSME lending in the quarter was particularly strong, supported by the strength of the Georgian economy, growing by 4.7% in the quarter. Going forward, the Retail Bank’s clear focus will be on capturing the significant growth opportunities in the mortgage and MSME portfolios. The overall impact of the regulatory changes has been the reduction of the net interest margin of the Retail Bank and, temporarily while the higher margin Express loan portfolio has been substantially run down, increase in the retail cost of credit risk ratio. Importantly however, the capital efficiency of this portfolio shift remains strong and the Retail Bank continues to deliver a very strong return on equity – 25.3% in the first quarter.
The Retail Bank now has almost 2.5 million customers, an increase of more than 4% over the last 12 months. Our fully transformed, user-friendly, multi-feature mobile banking application, mBank, continues to see significant growth in the number of digital transaction, growing 21.6% over the last three months alone. In addition, we have now comfortably exceeded our targeted 40,000 Solo clients by the end of 2018, with over 47,000 clients now benefiting from Solo’s concierge-style banking proposition.
Corporate Investment Banking (CIB) performed particularly strongly during the quarter. Customer lending in CIB grew 1.3% quarter-on-quarter, while the net interest margin increased by 20 basis points to 3.4%. This strong performance in CIB was driven by a 31.5% y-o-y (17.5% q-o-q) growth in net fees and commission, and an increase of 26.8% in operating income y-o-y, that led to 52.3% y-o-y growth in profit (adjusted for one-off employee costs related to termination benefits of former CEO and executive management).
The Group’s capital and funding position remains strong, and our issuance of US$100 million Additional Tier 1 capital in March 2019 has improved the efficiency of our capital structure, introduced a natural hedge against dollarisation in the economy and built in significant headroom over the fully-loaded Basel III capital requirements for 2021 that are currently being introduced. This Additional Tier 1 capital received regulatory approval in April 2019 and will therefore add approximately 230 basis points to our Tier 1 capital ratio with immediate effect. During April 2019, we took the opportunity to repay US$65 million of Tier 2 capital, and this will substantially reduce the carry-cost of the new Additional Tier 1 capital issuance. In addition, we continue to generate high levels of internal capital as a result of both the Group’s high return on equity, and the improved risk asset intensity of our current and expected lending growth.
Over the last 12 months, the banking sector in Georgia has been in a significant transition period following the implementation of a number of regulatory changes, particularly affecting lending guidelines in the retail banking sector. Following the introduction, in January 2019, of the increase in the GEL 100,000 limit, to GEL 200,000, below which lending must be issued to individuals in GEL, we are not aware of any further significant new regulatory changes over the foreseeable future. Looking forward, we expect that banks will see a shift towards lending to corporates and the MSME sector, and in the mortgage sector, improving the overall quality of banking balance sheets, and driving further progress in the dedollarisation of the banking sector. This is expected to support increased capital efficiency, and continuing strong profitability for Bank of Georgia.
Having taken over as Chief Executive of the Bank during the quarter, I have been impressed by the strength of the Bank’s customer franchise, and undisputed brand strength. We have considerably strengthened the executive management team and I look forward to working with the whole management team and colleagues to ensure we capture the many opportunities available in the Georgian financial services sector to develop more digital, efficient and modern financial services throughout Georgia.
Bank of Georgia Group PLC (LON:BGEO) announced changes and appointments to JSC Bank of Georgia’s executive management team, with effect from 1 May 2019 unless otherwise stated, subject to the necessary regulatory approvals. The new management structure has been updated following the recent appointment of Archil Gachechiladze as Chief Executive Officer.
· Sulkhan Gvalia has been appointed as Deputy CEO, Chief Financial Officer, replacing David Tsiklauri
· Levan Kulijanishvili will continue as Deputy CEO, Operations
· Mikheil Gomarteli will continue as Deputy CEO, Emerging and Mass Retail and Micro Business Banking
· Giorgi Pailodze, has been appointed as Deputy CEO, Corporate Investment Banking, replacing Vasil Khodeli, who will remain on the Management Board of the Bank
· George Chiladze will continue as Deputy CEO, Chief Risk Officer
· Vakhtang Bobokhidze will continue as Deputy CEO, Chief Information Officer
· Ramaz Kukuladze will step down from his role as Deputy CEO, SME and Premium Retail Business Banking. His directorate is to be split into two roles, both reporting to Archil Gachechiladze, Chief Executive Officer:
· Zurab Masurashvili, formerly Head of Micro Lending, will become Head of SME
· Eter Iremadze, formerly Deputy CEO of Georgian Global Utilities, a senior corporate banker with Bank of Georgia and Head of SOLO Banking, will become Head of SOLO/Premium Retail Business banking.
Sulkhan Gvalia, has extensive experience in banking having worked in a number of senior management roles at Bank of Georgia, including Chief Risk Officer (2005-2012) and Head of Corporate Banking (2012-2016). Prior to those roles Sulkhan served as Deputy Chairman of the management board of TbilUniversalBank, prior to its acquisition by Bank of Georgia in November 2004. He is currently the founder and CEO of E-Space Limited, Tbilisi – the only Georgian company developing the electric car charging infrastructure in Georgia and serves as a non-executive independent director at Inecobank (Armenia). He holds a law degree from Tbilisi State University.
Giorgi Pailodze, who will assume his role on 1 June 2019, joins from Evercore, an investment banking advisory firm, where he was most recently based in London, providing independent strategic advice to corporate and private equity companies across a range of sectors. He has previously held a number of banking management roles, including working for Citi Investment Bank, TBC Bank and HSBC Georgia. He holds an MBA from Cornell University, Johnson Graduate School of Management.
Archil Gachechiladze, Group CEO commented: “I am delighted to announce this new executive management team which demonstrates both the depth of management talent we have within the Group, and our ability to attract high quality executives from outside the Bank. As I mentioned when I was appointed to this role in January 2019, there are many opportunities available in the Georgian financial services sector to develop more digital and modern financial services throughout Georgia. With this enhanced executive management team, I very much look forward to leveraging those opportunities over the next few years.”
Bank of Georgia Group PLC (LON:BGEO) announced that the Group has launched a cutting-edge full-service real estate digital platform Area.ge – a platform that is unique in doing business in the Georgian real estate market. Area.ge offers a single space for the more convenient, timely and efficient interaction and information exchange to all stakeholders involved in buying, selling, renting and developing real estate in Georgia. The platform stands out with the most up-to-date, comprehensive and reliable offerings in the Georgian real estate market and is the first platform which is fully integrated with the Bank to provide its users a “one-click” live credit limit appraisal and mortgage application experience. The portal can be accessed through the following link: https://beta.area.ge
Levan Kobakhidze, Area.ge’s general manager commented: “Area.ge is a technologically advanced real estate platform that offers its clients a new standard of online services, web search and navigation, and credibility of its offerings. Our main goal is to bring together all real estate stakeholders, namely, the agents, developers, landlords, renters, buyers and funding providers under a single umbrella and offer them a unique opportunity to communicate, stay informed and execute the best possible transactions. Area.ge is equipped with customer propensity detecting systems that enable us to show our clients tailor-made offers within their financial capacity and deliver superior customer experience.”
Archil Gachechiladze, Bank of Georgia’s CEO commented: “Bank of Georgia continues to be at the top of digital offerings in the local market, and Area.ge is our latest investment in this endeavour. Our focus is to harness our market expertise and access to modern technology in order to give our existing and potential clients unique opportunities to get even more benefits from their relationship with Bank of Georgia.”
Bank of Georgia Group PLC (LON:BGEO) announced that on 25 January JSC Bank of Georgia opened a brand new office in the centre of Tbilisi’s Freedom Square, dedicated to serving its Wealth Management clients. The office resides in a historic 19th century building, which originally used to house the First Credit Society of Georgia and is considered to be the first residence of a local banking institution. The branch office was renovated by the Italian design company DINN!. The design concept was derived from the integration of Georgian culture with western values, while the artistic expression of the building has been left intact.
Bank of Georgia has offered wealth management services since 2005 and currently serves more than 1,500 clients from approximately 80 countries. The Wealth Management business has representation in Tbilisi, London, Budapest, Tel Aviv, Istanbul and Limassol.
Archil Gachechiladze, Bank of Georgia’s CEO commented: “I am delighted that Bank of Georgia will continue to offer its superior wealth management services from this new office in the heart of Tbilisi. The opening of the office in such a historically significant and symbolic building in the capital coincides with a creation of a new brand identity of Bank of Georgia’s Wealth Management business, which is grounded on the virtues of both Georgia and the Bank. The country has superior qualities to offer to investors: it is politically and economically stable; it has an exceptionally healthy and profitable financial sector, and it is one of the best countries in the world to do business. Bank of Georgia is innovative, experienced and a highly trustworthy financial partner in Georgia – all of which makes it best suited to become the regional hub for private banking.”
Bank of Georgia Group PLC (LON:BGEO) today announced the appointment of Archil Gachechiladze as Chief Executive of the Group and of JSC Bank of Georgia. He will join the Group with effect from 28 January 2019 and will become a member of the Board of Directors of the Group on that day. The appointment of Archil as a CEO of the Bank is subject to approval and consent from the Bank’s regulator – The National Bank of Georgia. On the same date, Kaha Kiknavelidze will step down from the Board and the CEO role.
Archil Gachechiladze joins Bank of Georgia from his current role as Chief Executive of Georgia Global Utilities. Prior to that role, Archil worked in a number of senior management positions in Bank of Georgia, including as Deputy CEO in charge of Corporate Banking, and as Chief Financial Officer.
Neil Janin, Bank of Georgia Group Chairman, commented:
“I am delighted that we are appointing Archil as CEO, after he thoroughly impressed all Board members during a comprehensive search conducted by the Board. Archil brings a strong strategic perspective and has an excellent track record of delivering growth in the Georgian banking environment. He is an extremely strong business leader with the experience and drive to take Bank of Georgia into its next phase, following a period of significant corporate and regulatory change.”
Archil Gachechiladze commented:
“It is a great honour and a privilege to be asked to take on the role of CEO of Bank of Georgia. The Bank is a great organisation, with undisputed brand strength and a highly professional and capable management team that I consider to be unparalleled in Georgia. There are many opportunities available in the Georgian financial services sector to develop more digital and modern financial services throughout Georgia, and I look forward to working with the management team and colleagues to leverage these opportunities over the next few years.”
Bank of Georgia Group PLC (LON:BGEO) today announced that Kaha Kiknavelidze intends to step down from the Board and as Chief Executive of the Group and of JSC Bank of Georgia. The Board is now in the process of recruiting Kaha’s successor, and is pleased that Kaha will continue in the role until a successor can be appointed. Upon his departure from the Chief Executive role, Kaha has agreed to remain as a Senior Advisor to the Supervisory Board and the Bank. The Board expects to be in a position to confirm the new CEO appointment during the first quarter of 2019.
The Bank recently reported its financial results for the first nine months of 2018, and current projections for the full-year are expected to maintain those strong trends, in line with management expectations.
Neil Janin, Chairman, commented:
“Having recently completed the demerger of Bank of Georgia from the BGEO Group, Kaha has managed the Bank to deliver its key objectives of strong profitability and customer lending growth, during a time of significant corporate and regulatory change. The Board is pleased with these achievements however, after a period of reflection, the Board and Kaha have mutually agreed that the time is now right for a new Chief Executive to take the business to its next phase and to drive the many new initiatives and opportunities, in areas such as digitalisation, wealth management, product innovation and customer service together with further process automation initiatives. These will continue to sustain the Bank’s superior profitability and earnings momentum.
Kaha has been on the Board of the Group for over 10 years and I would like to thank him for his considerable achievements and successes during that period. He has made a significant contribution to the development of Bank of Georgia into the successful institution it has become, and I am delighted that he will remain with us until his successor can be recruited, and thereafter in a Senior Advisory role.”
Kaha Kiknavelidze commented:
“It has been a genuine privilege to have been part of the success story of Bank of Georgia, and to have led such a great management team of the last few years. Bank of Georgia has a fantastic entrepreneurial corporate culture, great people working within it and a customer franchise that, I believe, is second to none. These are great foundations for the future development of the Bank and I wish the Bank of Georgia management team every success in the years to come.”
Bank of Georgia Group PLC (LON:DGEO) today announced that JSC Bank of Georgia has been recognised as the best bank of 2018 in Central and Eastern Europe by The Banker. One of the criteria for selection was the Bank’s successful transformation from a product focus to a client-centric business model which has resulted in more effective tailor-made services through the Bank of Georgia’s multi-brand strategy. The Banker also outlined the Bank’s achievements in creating digital platforms and loyalty programmes, which are an integral part of Bank of Georgia’s client-centric business model and its focus on developing stronger customer relationships. The Banker distinguished Bank of Georgia, a London Stock Exchange listed company, for its best-in-class corporate governance standards and its competitive advantage in the local market in terms of attracting human and financial capital.
Kaha Kiknavelidze, the Bank of Georgia CEO commented: “We are very pleased to be awarded the Bank of the Year 2018 award. Bank of Georgia is a strong, innovative and truly public financial institution with exemplary corporate governance standards. Bank of Georgia exemplifies the importance of customer relationships and digital innovation in its successful multi-brand strategy. We will continue to leverage our exceptional human and financial capital to be market leaders in Georgia and set the best banking practices in the region.”
Bank of Georgia Group PLC (LON:BGEO) today announced that JSC Bank of Georgia has introduced a new payment method “QR PAY” to the local small business market. QR PAY has been designed by the Bank as an alternative payment mechanism to the traditional point of sale terminal for small Georgian businesses that previously relied on cash transactions as a means for their customers to settle payments. In order to connect to QR PAY and enjoy the benefits of cashless payments, small businesses should have an account in Bank of Georgia. Once connected, they will start receiving QR PAY services free of charge for the first year. Thereafter, a service commission will be based on the turnover of the enterprise. This is a significant advantage for small businesses with low turnover. For customers who use Bank of Georgia’s mobile bank and a debit or credit card, settling payments with QR PAY application is simple and user-friendly. Currently, there are already up to 800 small businesses connected to QR PAY.
Kaha Kiknavelidze, the Bank of Georgia CEO commented: “We are very pleased to introduce yet another innovative digital instrument that will help small Georgian businesses thrive and make transactional banking effortless and comfortable for everybody with minimum costs. Bank of Georgia is the only bank in Georgia with this payment mechanism. Over the last few years we have been successfully supporting cashless transactions among our retail clients by continuously designing and offering them cutting edge digital products such as our fully integrated mobile bank. With QR PAY we have now taken a step further and aim to make digital transactions even more widespread among both our retail and business clients.”
