1st Quarter Results

RNS Number : 0200L
Bank of Georgia Group PLC
11 May 2022
 


 

 

 

Bank of Georgia

Group PLC

First Quarter 2022 Results

 

 

 

 

 


 

 

 

Name of authorised official of issuer responsible for making notification:

Nini Arshakuni, Head of Investor Relations

 

 

www.bankofgeorgiagroup.com



 

ABOUT BANK OF GEORGIA GROUP PLC

 

Bank of Georgia Group PLC ("Bank of Georgia Group" or the "Group" and on the LSE: BGEO LN) is a UK incorporated holding company. The Group mainly comprises: a) retail banking and payments business (Retail Banking); and b) corporate banking and investment banking operations (Corporate and Investment Banking) in Georgia.  

 

JSC Bank of Georgia ("Bank of Georgia", "BOG", or the "Bank"), a systematically important and leading universal bank in Georgia, is the core entity of the Group. The Bank is a leader in the payments business and financial mobile application, with strong retail and corporate banking franchises. In line with our digital strategy, the Group focuses on expanding technological and advanced data analytics capabilities to offer more personalised solutions and seamless experiences to our customers. Employee empowerment, customer satisfaction, and data-driven decision-making, together with the strength of the banking franchise, are key enablers of the Group's sustainable value creation. By building on its competitive strengths and uncovering more opportunities, the Group is committed to delivering strong profitability sustainably and maximising shareholder value.

 

The Group expects to benefit from the growth of the Georgian economy, and through both its Retail Banking and Corporate and Investment Banking operations, it aims to deliver on its strategy and its key medium-term objectives  ̶   at least 20% return on average equity (ROAE) and c.10% growth of its loan book.

 

 

1Q22 RESULTS AND CONFERENCE CALL DETAILS

 

Bank of Georgia Group PLC announces the Group's consolidated financial results for the first quarter of 2022. Unless otherwise noted, numbers in this announcement are given for 1Q22 and comparisons are for 1Q21. The results are based on International Financial Reporting Standards ("IFRS") as adopted by the United Kingdom, are unaudited and derived from management accounts. The results announcement is also available on the Group's website at www.bankofgeorgiagroup.com .

 

An investor and analyst conference call will be held on 11 May 2022, at 14:00 BST / 15 :00 CET / 09 :00 EST .

 

Webinar instructions:

 

Please use the link below to join the webinar:

https://bankofgeorgia.zoom.us/j/97971760262?pwd=NlB5OWEwS0FVa3Q4WlJHZWkvWHBRUT09

Webinar ID: 979 7176 0262

Passcode: 858439

 

Or use the following international dial-in numbers available at: https://bankofgeorgia.zoom.us/u/ad7H7qGpn1

Webinar ID: 979 7176 0262#

Passcode: 858439

 

Participants joining via Zoom can use the "raise hand" feature at the bottom of the screen to ask questions. Participants dialing in can press *9 to raise hand and ask questions.



 

CONTENTS

 

 

4

Macroeconomic developments

 


5

1Q22 results highlights

 


7

Chief Executive Officer's statement

 


8

Discussion of results

 


12

Discussion of segment results

12

Retail Banking

16

Corporate and Investment Banking

 


19

Selected financial and operating information

 


24

Glossary

 


25

Company information

 

 

 

 


 

FORWARD-LOOKING STATEMENTS

 

This announcement contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development. Although Bank of Georgia Group PLC believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. By their nature, these forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, certain of which are beyond our control, include, among other things: macro risk, including domestic instability; regional instability risk; credit risk; liquidity and funding risk; capital risk; market risk; regulatory and legal risk; financial crime risk; information security and data protection risks; operational risk; human capital risk; COVID-19 pandemic risk; model risk; climate change risk; and other key factors that could adversely affect our business and financial performance, as indicated elsewhere in this document and in past and future filings and reports of the Group, including the 'Principal risks and uncertainties' included in Bank of Georgia Group PLC's Annual Report and Accounts 2021. No part of this document constitutes, or shall be taken to constitute, an invitation or inducement to invest in Bank of Georgia Group PLC or any other entity within the Group, and must not be relied upon in any way in connection with any investment decision. Bank of Georgia Group PLC and other entities within the Group undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Nothing in this document should be construed as a profit forecast.

 

 

MACROECONOMIC DEVELOPMENTS

 

The first quarter of 2022 was defined by the impact of the ongoing Russia-Ukraine war and elevated uncertainty about the conflict itself and its implications for the rest of the world. The war has intensified supply shocks, exacerbating inflationary pressures and threatening regional and global growth. Despite Georgia's economic exposure to Russia and Ukraine - total inflows from both countries to Georgia in 2021 accounted for 9.7% of GDP - the downside impact on Georgia's growth momentum is expected to be limited given the country's resilience demonstrated during the COVID-19 pandemic as well as its strong track record of prudent macroeconomic policies. Our investment banking arm, Galt & Taggart, has recently revised the 2022 real GDP growth forecast to 4.5%, down from the pre-war projection of 5.0% but higher than the base case of 3.0% projected shortly after the outbreak of the war, considering the strong growth achieved in the first quarter of 2022. Ongoing war, geopolitical tensions and related uncertainty are key risks to growth, while the pandemic risk has reduced significantly.

Real GDP growth in 1Q22 was 14.4%, partially reflecting last year's low base, coupled with strong external inflows and robust domestic demand. Although the growth in goods exports and remittances has decelerated since the outbreak of the war, tourism revenues have continued a steady recovery. Reduced remittances from the regional economies have been offset by robust inflows from EU countries, resulting in a 9.2% year-on-year increase in remittances in 1Q22. Disruptions in goods trade with Russia and Ukraine have been compensated by higher-valued commodity-based exports to other countries, delivering a 43.3% year-on-year increase in goods exports in 1Q22. The recovery in tourism arrivals has flattened, but tourism revenues have increased to 68.1% of the 2019 pre-pandemic level in the first quarter of 2022.

Inflation remains a significant challenge as the war in Ukraine has driven global commodity and food prices up. Annual CPI inflation in Georgia was 11.8% in March 2022 (a 2.5% month-on-month increase). The NBG increased the refinancing rate by an additional 50 bps to 11.0% in March 2022. Given the tight monetary policy, inflation is expected to fall gradually over the course of the year, averaging around 9.0%. Tight monetary policy coupled with resilient external inflows have contributed to a relatively stable local currency. As at 31 March 2022, GEL had depreciated by only 0.1% year-to-date.

COVID-19 cases in Georgia have dropped sharply, and all restrictions have been fully lifted. We expect this positive dynamic to drive a recovery in the hospitality sector in 2022.  

Notwithstanding increased uncertainty and challenges amid the ongoing military conflict in Ukraine, the Group delivered a strong performance in the first quarter of 2022, ending the quarter with a profit of GEL 240.6mln and a return on average equity of 30.7%, while maintaining strong capital and liquidity positions.

Next we present the Group's 1Q22 performance highlights and Chief Executive Officer's letter, before going into greater detail.

1Q22 FINANCIAL RESULTS HIGHLIGHTS

 

 

GEL thousands

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

 

INCOME STATEMENT HIGHLIGHTS







Net interest income 

271,450

212,332

27.8%

270,071

0.5%


Net fee and commission income 

58,832

48,650

20.9%

64,100

-8.2%


Net foreign currency gain

64,484

19,176

236.3%

34,495

86.9%


Net other income

983

23,482

-95.8%

10,579

-90.7%


Operating income 

395,749

303,640

30.3%

379,245

4.4%

 

Operating expenses 

(138,355)

(107,359)

28.9%

(150,772)

-8.2%

 

Profit / (loss) from associates

126

167

-24.6%

128

-1.6%


Operating income before cost of risk 

257,520

196,448

31.1%

228,601

12.7%

 

Cost of risk 

7,567

(44,117)

NMF

(7,744)

NMF


Net operating income before non-recurring items

265,087

152,331

74.0%

220,857

20.0%

 

Net non-recurring items

48

17

182.4%

(62)

NMF


Profit before income tax expense

265,135

152,348

74.0%

220,795

20.1%

 

Income tax expense

(24,563)

(13,424)

83.0%

(20,076)

22.4%


Profit

240,572

138,924

73.2%

200,719

19.9%

 

 

 

 

GEL thousands

Mar -22

Mar-21

Change

y-o-y

Dec-21

Change

q-o-q

BALANCE SHEET HIGHLIGHTS






Liquid assets

6,785,761

6,968,871

-2.6%

6,047,616

12.2%

  Cash and cash equivalents

1,632,690

2,361,663

-30.9%

1,520,562

7.4%

  Amounts due from credit institutions

1,978,568

2,200,803

-10.1%

1,931,390

2.4%

  Investment securities

3,174,503

2,406,405

31.9%

2,595,664

22.3%

Loans to customers and finance lease receivables[1]

16,289,380

14,601,275

11.6%

16,168,973

0.7%

Property and equipment

384,828

385,352

-0.1%

378,808

1.6%

Total assets

24,270,229

22,752,245

6.7%

23,430,076

3.6%

Client deposits and notes

14,517,253

14,003,209

3.7%

14,038,002

3.4%

Amounts owed to credit institutions

4,676,861

4,039,250

15.8%

4,318,445

8.3%

  Borrowings from DFIs

2,114,220

2,222,967

-4.9%

2,135,301

-1.0%

  Short-term loans from central banks

1,772,605

772,647

129.4%

1,413,333

25.4%

  Loans and deposits from commercial banks

790,036

1,043,636

-24.3%

769,811

2.6%

Debt securities issued

1,415,940

1,653,399

-14.4%

1,518,685

-6.8%

Total liabilities

20,996,390

20,064,595

4.6%

20,337,168

3.2%

Total equity

3,273,839

2,687,650

21.8%

3,092,908

5.8%

 

 

 

KEY RATIOS

1Q22

1Q21

4Q21

 

ROAA

4.1%

2.5%

3.5%


ROAE

30.7%

21.5%

26.4%


Net interest margin

5.3%

4.5%

5.3%


Liquid assets yield

4.3%

3.1%

4.0%


Loan yield

11.1%

10.4%

11.0%


Cost of funds

5.0%

4.5%

4.8%


Cost / income

35.0%

35.4%

39.8%


NPLs to Gross loans to clients

2.5%

3.6%

2.4%


NPL coverage ratio

97.3%

77.5%

95.5%


NPL coverage ratio, adjusted for discounted value of collateral

153.0%

127.8%

147.7%


Cost of credit risk ratio

0.8%

0.8%

-0.2%


NBG (Basel III) CET1 capital adequacy ratio

13.7%

11.2%

13.2%


NBG (Basel III) Tier I capital adequacy ratio

15.4%

13.3%

15.0%


NBG (Basel III) Total capital adequacy ratio

19.7%

18.6%

19.3%


 

 

 




1Q22 PERFORMANCE HIGHLIGHTS

§ Strong quarterly results underpinning robust profitability. The Group generated operating income before cost of risk of GEL 2 57 . 5 mln in 1Q22, up 31.1% y-o-y and up 12.7% q-o-q. Our profit for the quarter was GEL 240.6mln, up 73.2% y-o-y and up 19.9% q-o-q. ROAE was 30.7% in 1Q22 (21.5% in 1Q21 and 26.4% in 4Q21).

§ Operating expenses . We have continued investing in IT-related programmes, digitalisation and marketing, in line with our strategic priorities, while maintaining a key focus on efficiency and cost control. Our cost to income ratio improved to 35.0% in 1Q22 (35.4% in 1Q21 and 39.8% in 4Q21).

§ Loan book increased by 11.6% y-o-y and by 0.7% q-o-q at 31 March 2022. Growth on a constant-currency basis was 19.0% y-o-y and 1.0% q-o-q.   Strong y-o-y growth was primarily driven by consumer, micro and SME portfolios.

§ Client deposits and notes increased by 3.7% y-o-y and by 3.4% q-o-q at 31 March 2022 . On a constant-currency basis, client deposits and notes were up 10.6% y-o-y and up 3.6% q-o-q.

§ Cost of credit risk. The cost of credit risk ratio was 0.8% in 1Q22 (cost of credit risk ratio of 0.8% in 1Q21 and a net gain of 0.2% in 4Q21), driven by a higher ECL charge posted in the Retail Banking segment reflecting fast growth of unsecured consumer loan portfolio, as well as higher provisions required for the Group's operations in Belarus. These were partially offset by strong recoveries in Corporate and Investment Banking. See details on page 9.

§ Asset quality. NPLs to gross loans stood at 2.5% at 31 March 2022, compared with 3.6% at 31 March 2021 and 2.4% at 31 December 2021. The NPL coverage ratio increased to 97.3% at 31 March 2022 (77.5% at 31 March 2021 and 95.5% at 31 December 2021), and the NPL coverage ratio adjusted for a discounted value of collateral was 153.0% at 31 March 2022 (127.8% at 31 March 2021 and 147.7% at 31 December 2021). The significant y-o-y decrease in NPLs to gross loans and the increase in NPL coverage ratios at 31 March 2022 were primarily driven by more customers returning to regular repayments, especially in the Retail Banking segment.

§ Strong capital adequacy position. The Bank's capital adequacy ratios continue to increase on a quarterly basis, and are comfortably above the Bank's minimum regulatory requirements. The Bank's Basel III Common Equity Tier 1, Tier 1 and Total capital adequacy ratios stood at 13.7%, 15.4% and 19.7%, respectively, above the minimum required levels of 11.8%, 14.1% and 17.6%, respectively, at 31 March 2022. The q-o-q increase in capital ratios was driven by the Bank's strong internal capital generation , partially offset by the impact of business growth.

§ Strong liquidity and funding positions. At 31 March 2022, after successfully deploying some excess liquidity during the quarter, the Bank's liquidity coverage ratio stood at 116.2% and the net stable funding ratio was 130.7%, both comfortably above the 100% minimum required levels.

§ Good progress in strategic areas. The Bank has continued to develop digital products and deliver superior customer experience. We had 892,316 monthly active users of our retail mBank/iBank as at 31 March 2022 (up 22.7% y-o-y and up 4.6% q-o-q), with 44.6% of these customers using our mobile and internet banking platforms on a daily basis. Product offloading to digital channels reached 35.0% in the first quarter of 2022, up from 19.3% in 1Q21 and up from 28.4% in 4Q21 (see details on page 14). We have continued to develop our payments business and achieved further market share gains in the number and volume of payment transactions that go through our POS terminals in 1Q22.

 


CHIEF EXECUTIVE OFFICER'S STATEMENT

The first quarter of 2022 was heavily influenced by the ongoing war in Ukraine, and we are extremely saddened by the level of unnecessary human suffering that is continuing unabated. Our thoughts and prayers remain with the Ukrainian people, as we all hope for a speedy resolution of the conflict. Given Georgia's recent past, this has been an emotional time for our team, but organisationally we have ensured that we remain focused on our business imperatives. Employee engagement remains critical in challenging times, and I have spent much time visiting branches, listening to our employees and ensuring that business momentum remains strong. 

I am proud, therefore, that Bank of Georgia Group delivered strong first quarter performance, with a 30.3% y-o-y increase in operating income, a 73.2% y-o-y increase in profit to GEL 240.6 million, and a return on equity of 30.7%. Strong top- and bottom-line growth was supported by the resilience of the Georgian economy in the face of the regional challenges. At the start of the war in Ukraine, we initially revised our GDP growth expectation for Georgia for 2022 down to around 3.0%, with downside risks if the conflict became prolonged. As the last two months have evolved, however, Georgia's economy has experienced strong growth momentum supported by resilient external inflows. The Georgian Lari has consequently remained robust over the last three months. As a result of these dynamics, we now expect Georgian real GDP growth in 2022 to be around 4.5%. High levels of inflation will remain an economic challenge, but given the tight monetary policy, we do expect inflationary pressures to reduce during the rest of the year.

This report goes into significant detail on the core business trends but, from my perspective, our continuing franchise growth, combined with strength in the payments business and increasing use of our financial mobile app were key to achieving such strong y-o-y net interest income and fee and commission growth (27.8% and 20.9%, respectively) in the first quarter. Strong client-driven foreign exchange commissions also supported an overall 30.3% y-o-y growth in operating income. We have continued to invest in digitalisation, and technological and advanced data analytics capabilities, whilst still improving our cost to income ratio.

Our balance sheet has also remained strong. Overall lending growth was more subdued at 1.0% on a constant-currency basis during the quarter, as strong growth in the consumer, micro and SME portfolios was offset by many Georgian corporates being relatively conservative in their investment plans during these uncertain times. Asset quality also remained robust within the quarter. We experienced an increase in the cost of credit risk in Retail Banking, mainly reflecting the fast growth of our unsecured consumer lending portfolio, but this was partially offset by some significant recoveries in the Corporate and Investment banking business. We have also reassessed our assets in BNB, our bank in Belarus, considering the deteriorated macroeconomic environment, resulting in a total of GEL 49.3 million negative effect on equity. The Group's remaining exposure in Belarus is GEL 76.1 million, representing 2.3% of the Group's total equity.

At Bank of Georgia, we are focused on our key strategic priorities, building our customer franchise with excellent customer experience, digitalisation and our ESG agenda at the forefront. We have maintained NPS at a high level of 54%, made good progress in the number of monthly active digital users - at 892 thousand in March 2022, up 22.7% compared with prior year, increased product offloading to digital channels to 35%, and these results, in combination with ROAE above 30% and cost to income ratio of 35%, reflect the underlying strength of our business, despite challenging external circumstances. Whilst we still experience elevated levels of uncertainty, I expect the Georgian economy to continue its recent growth momentum, and we remain well-positioned to continue delivering our targeted combination of strong growth and high profitability.

 

 

 

 

 

 

Archil Gachechiladze,

CEO, Bank of Georgia Group PLC

10 May 2022


DISCUSSION OF RESULTS

The Group's business comprises three segments. (1) Retail Banking operations in Georgia principally provide consumer loans, mortgage loans, overdrafts, credit cards and other credit facilities, funds transfers and settlement services, and the handling of customers' deposits for both individuals and legal entities. Retail Banking targets mass retail, mass affluent and high-net-worth clients segments, together with small and medium-sized enterprises and micro businesses. (2) Corporate and Investment Banking comprises Corporate Banking and Investment Management operations in Georgia. Corporate Banking principally provides loans and other credit facilities, funds transfers and settlement services, trade finance services, documentary operations support and the handling of saving and term deposits for corporate and institutional customers. The Investment Management business principally provides brokerage services through Galt & Taggart. (3) BNB, comprising JSC Belarusky Narodny Bank, principally provides retail and corporate banking services to clients in Belarus.

OPERATING INCOME

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

 







 

Interest income 

521,294

428,580

21.6%

509,563

2.3%

 

Interest expense 

(249,844)

(216,248)

15.5%

(239,492)

4.3%

 

Net interest income 

271,450

212,332

27.8%

270,071

0.5%

 

Fee and commission income 

106,673

76,446

39.5%

113,664

-6.2%

 

Fee and commission expense 

(47,841)

(27,796)

72.1%

(49,564)

-3.5%

 

Net fee and commission income 

58,832

48,650

20.9%

64,100

-8.2%

 

Net foreign currency gain

64,484

19,176

236.3%

34,495

86.9%

 

Net other income

983

23,482

-95.8%

10,579

-90.7%

 

Operating income 

395,749

303,640

30.3%

379,245

4.4%

 

 






 

Net interest margin

5.3%

4.5%


5.3%


 

Average interest earning assets

20,879,275

18,932,570

10.3%

20,257,844

3.1%

 

Average interest bearing liabilities

20,371,447

19,345,778

5.3%

19,696,541

3.4%

 

Average net loans and finance lease receivables

16,130,302

14,340,661

12.5%

15,825,253

1.9%

 

  Average net loans and finance lease receivables, GEL

7,409,484

5,873,004

26.2%

7,155,129

3.6%

 

  Average net loans and finance lease receivables, FC

8,720,818

8,467,657

3.0%

8,670,124

0.6%

 

Average client deposits and notes

14,217,208

13,942,631

2.0%

13,717,739

3.6%

 

  Average client deposits and notes, GEL

5,591,900

5,313,836

5.2%

5,270,841

6.1%

 

  Average client deposits and notes, FC

8,625,308

8,628,795

0.0%

8,446,898

2.1%

 

Average liquid assets

6,573,713

6,732,512

-2.4%

6,023,591

9.1%

 

  Average liquid assets, GEL

3,141,884

2,600,231

20.8%

2,811,276

11.8%

 

  Average liquid assets, FC

3,431,829

4,132,281

-17.0%

3,212,315

6.8%

 

Liquid assets yield

4.3%

3.1%

 

4.0%

 

 

  Liquid assets yield, GEL

8.8%

7.6%

 

8.3%

 

 

  Liquid assets yield, FC

0.1%

0.1%

 

0.1%

 

 

Loan yield

11.1%

10.4%

 

11.0%

 

 

  Loan yield, GEL

15.8%

14.8%

 

15.5%

 

 

  Loan yield, FC

7.1%

7.2%

 

7.2%

 

 

Cost of funds

5.0%

4.5%

 

4.8%

 

 

  Cost of funds, GEL

9.2%

7.8%

 

8.9%

 

 

  Cost of funds, FC

2.1%

2.8%

 

2.2%

 

 

Cost / income

35.0%

35.4%

 

39.8%

 

 

Performance highlights

§ The Group generated strong operating income of GEL 395.7mln in 1Q22 (up 30.3% y-o-y and up 4.4% q-o-q). The y-o-y increase was driven by strong net interest income (up 27.8% y-o-y), net fee and commission income (up 20.9% y-o-y) and net foreign currency gains (up 236.3% y-o-y). The q-o-q increase was mainly driven by strong net foreign currency gains (up 86.9% q-o-q).

§ Net other income was down y-o-y and q-o-q in 1Q22, partly due to the high base in 2021 as a result of significant net gains from the sale of real estate properties and investment securities. In addition, considering the ongoing external challenges related to the Russia-Ukraine war and the deteriorated macroeconomic outlook for Belarus, we recorded a GEL 4.4mln net loss on the revaluation of investment property of our subsidiary in Belarus in the first quarter of 2022.

NET OPERATING INCOME BEFORE NON-RECURRING ITEMS; COST OF RISK; PROFIT

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

 







 

Salaries and other employee benefits

(78,329)

(60,223)

30.1%

(80,501)

-2.7%

 

Administrative expenses

(33,702)

(23,563)

43.0%

(43,552)

-22.6%

 

Depreciation, amortisation and impairment

(24,627)

(22,561)

9.2%

(25,256)

-2.5%

 

Other operating expenses 

(1,697)

(1,012)

67.7%

(1,463)

16.0%

 

Operating expenses 

(138,355)

(107,359)

28.9%

(150,772)

-8.2%

 

Profit / (loss) from associate

126

167

-24.6%

128

-1.6%

 

Operating income before cost of risk 

257,520

196,448

31.1%

228,601

12.7%

 

Expected credit loss on loans to customers 

(29,856)

(28,236)

5.7%

9,836

NMF

 

Expected credit loss on finance lease receivables

(1,284)

(931)

37.9%

(3,406)

-62.3%

 

Other expected credit loss and impairment charge on other assets and provisions

38,707

(14,950)

NMF

(14,174)

NMF

 

Cost of risk 

7,567

(44,117)

NMF

(7,744)

NMF

 

Net operating income before non-recurring items

265,087

152,331

74.0%

220,857

20.0%

 

Net non-recurring items 

48

17

182.4%

(62)

NMF

 

Profit before income tax

265,135

152,348

74.0%

220,795

20.1%

 

Income tax expense

(24,563)

(13,424)

83.0%

(20,076)

22.4%

 

Profit

240,572

138,924

73.2%

200,719

19.9%

 

§ Operating expenses. Operating expenses were up 28.9% y-o-y and down 8.2% q-o-q in 1Q22. The y-o-y increase was mainly driven by strong business growth and continuing investments in digital and IT-related programmes, amid the higher inflationary environment, while the q-o-q decrease partially reflected seasonal trends. Our cost to income ratio improved to 35.0% in 1Q22, down from 35.4% in 1Q21 and 39.8% in 4Q21.

§ Cost of risk in 1Q22 reflected a combination of the following factors:

§ Cost of credit risk ratio was 0.8% in 1Q22 (cost of credit risk ratio of 0.8% in 1Q21 and a net gain of 0.2% in 4Q21). The Group recorded ECL provisions on loans to customers and finance lease receivables in the amount of GEL 50.2mln for the Retail Banking business. The higher than normal ECL in Retail Banking was mainly driven by increased sales of unsecured consumer loans as we redesigned the lending process in digital channels in 2021. Furthermore, the Group recorded a GEL 21.5mln E/CL provisions on loans to customers and finance lease receivables of BNB in the light of the revised macroeconomic outlook. These were partially offset by a net ECL reversal of GEL 41.6mln in the Corporate and Investment Banking segment in 1Q22, reflecting a number of recoveries during the quarter.

§ Expected credit loss and impairment charge on other assets and provisions in 1Q22 mainly comprised a GEL 44.3mln recovery of some previously paid legal fees.

§ Quality of the loan book . The y-o-y decline in the NPLs to gross loans ratio and the increase in the NPL coverage ratios at 31 March 2022 were mainly driven by more customers returning to regular repayments, especially in the Retail Banking segment. The NPLs to gross loans ratio was broadly stable q-o-q:

 

GEL thousands, unless otherwise noted

Mar-22

Mar-21

Change

y-o-y

Dec-21

Change

q-o-q

NON-PERFORMING LOANS






NPLs

424,405

534,626

-20.6%

394,720

7.5%

NPLs to gross loans

2.5%

3.6%


2.4%


NPLs to gross loans, RB

1.8%

3.3%


1.8%


NPLs to gross loans, CIB

3.9%

4.0%


3.6%


NPL coverage ratio

97.3%

77.5%


95.5%


NPL coverage ratio adjusted for the discounted value of collateral

153.0%

127.8%


147.7%


§ BNB - the Group's banking subsidiary in Belarus - Considering the deteriorated macroeconomic outlook amid the ongoing war in Ukraine, we reassessed the assets of BNB, resulting in a negative P&L effect of GEL 31.4mln (comprising a GEL 4.4 mln net loss on the revaluation of investment property, a GEL 21.5mln ECL provisions on loans to customers and finance lease receivables, a GEL 5.5mln other expected credit loss and impairment charge on other assets and provisions) and a negative GEL 17.9mln effect through other comprehensive income as a result of the revaluation of investment securities. The Group's remaining exposure in Belarus is GEL 76.1 million, representing 2.3% of the Group's total equity. BNB's capital ratios stood above the requirements of the National Bank of the Republic of Belarus (the "NBRB") at 31 March 2022 as those are calculated in accordance with NBRB standards. At 31 March 2022, the total capital adequacy ratio was 15.3%, above the 12.5% minimum requirement, while Tier I capital adequacy ratio was 11.8%, above the NBRB's 7.0% minimum requirement. For BNB's financial results highlights, see page 22.

§ Overall, the Group recorded a profit of GEL 240.6mln in 1Q22 (up 73.2% y-o-y and up 19.9% q-o-q). The Group's ROAE was 30.7% in 1Q22 (21.5% in 1Q21 and 26.4% in 4Q21).

BALANCE SHEET HIGHLIGHTS

GEL thousands, unless otherwise noted 

Mar-22

Mar-21

Change

y-o-y

Dec-21

Change

q-o-q

Liquid assets

6,785,761

6,968,871

-2.6%

6,047,616

12.2%

Liquid assets, GEL

3,266,943

2,515,544

29.9%

2,819,195

15.9%

Liquid assets, FC

3,518,818

4,453,327

-21.0%

3,228,421

9.0%

Net loans and finance lease receivables

16,289,380

14,601,275

11.6%

16,168,973

0.7%

Net loans and finance lease receivables, GEL

7,573,935

6,029,913

25.6%

7,348,911

3.1%

Net loans and finance lease receivables, FC

8,715,445

8,571,362

1.7%

8,820,062

-1.2%

Client deposits and notes

14,517,253

14,003,209

3.7%

14,038,002

3.4%

Amounts owed to credit institutions

4,676,861

4,039,250

15.8%

4,318,445

8.3%

Borrowings from DFIs

2,114,220

2,222,967

-4.9%

2,135,301

-1.0%

Short-term loans from central banks

1,772,605

772,647

129.4%

1,413,333

25.4%

Loans and deposits from commercial banks

790,036

1,043,636

-24.3%

769,811

2.6%

Debt securities issued

1,415,940

1,653,399

-14.4%

1,518,685

-6.8%







LIQUIDITY AND CAPITAL ADEQUACY RATIOS






Net loans / client deposits and notes

112.2%

104.3%


115.2%


Net loans / client deposits and notes + DFIs

97.9%

90.0%


100.0%


Liquid assets / total assets

28.0%

30.6%


25.8%


Liquid assets / total liabilities

32.3%

34.7%


29.7%


NBG liquidity coverage ratio

116.2%

149.3%


124.0%


NBG (Basel III) CET1 capital adequacy ratio

13.7%

11.2%


13.2%


NBG (Basel III) Tier I capital adequacy ratio

15.4%

13.3%


15.0%


NBG (Basel III) Total capital adequacy ratio

19.7%

18.6%


19.3%


Our balance sheet remains highly liquid (NBG liquidity coverage ratio of 116.2%) and strongly capitalised (NBG Basel III CET1 capital adequacy ratio of 13.7%) witha well-diversified funding base (client deposits and notes to total liabilities of 69.1%) at 31 March 2022.

§ Liquidity. Liquid assets stood at GEL 6,785.8mln at 31 March 2022, down 2.6% y-o-y and up 12.2% q-o-q. The NBG liquidity coverage ratio was 116.2% at 31 March 2022 (149.3% at 31 March 2021 and 124.0% at 31 December 2021), comfortably above the 100% minimum requirement level.

§ Loan book. Our net loan book and finance lease receivables reached GEL 16,289.4mln at 31 March 2022, up 11.6% y-o-y and up 0.7% q-o-q. Growth on a constant-currency basis was 19.0% y-o-y and 1.0% q-o-q. GEL-denominated portfolio increased by 25.6% y-o-y and by 3.1% q-o-q at 31 March 2022, and represented 46.5% of total portfolio (41.3% at 31 March 2021 and 45.5% at 31 December 2021). The share of Retail Banking net loan book and finance lease receivables in the Bank's net loans and finance lease receivables was 68.9% at 31 March 2022 (65.8% at 31 March 2021 and 67.0% 31 December 2021).

§ Net loans to customer funds and Development Finance Institutions (DFI) ratio . Our net loans to customer funds and DFI ratio stood at 97.9% at 31 March 2022, compared with 90.0% at 31 March 2021 and 100.0% at 31 December 2021.

§ Strong capital position. As a result of our robust operating performance and strong internal capital generation, the Bank's Basel III Common Equity Tier 1, Tier 1 and Total capital adequacy ratios stood at 13.7%, 15.4% and 19.7%, respectively, at 31 March 2022, comfortably above the minimum required levels of 11.8%, 14.1% and 17.6%, respectively. The movement in capital adequacy ratios in 1Q22 and the potential impact of a 10% devaluation of the local currency on different levels of capital is as follows:


31 December

2022

1Q22

profit

Business growth

Currency  impact

31 March

2022

 

Potential impact

of a 10% GEL devaluation









CET1 capital adequacy ratio

13.2%

0.9%

-0.4%

0.0%

13.7%


-0.9%

Tier I capital adequacy ratio

15.0%

0.9%

-0.5%

0.0%

15.4%


-0.9%

Total capital adequacy ratio

19.3%

0.9%

-0.5%

0.0%

19.7%


-0.8%

The Bank's minimum capital requirements, reflecting the full loading of Basel III capital requirements, to be completed in 2023, which remain subject to ongoing annual regulatory reviews, are currently expected to be as follows:

 

 

 

 

Expected minimum capital requirements for 2022-2023

 


Dec-22

Dec-23




CET1 capital requirement

11.8%

12.1%

Tier 1 capital requirement

14.1%

14.5%

Total capital requirement

17.6%

17.6%

Capital distribution. At the 2022 Annual General Meeting, the Board intends to recommend a final dividend for 2021 of GEL 2.33 per share payable in British Pounds at the prevailing rate. This will make a total dividend paid in respect of the Group's 2021 earnings of GEL 3.81 per share.

 

 

 


DISCUSSION OF SEGMENT RESULTS

RETAIL BANKING (RB)2  

 

Retail Banking provides consumer loans, mortgage loans, overdrafts, credit card facilities and other credit facilities as well as funds transfers and settlement services and the handling of customer deposits for both individuals and legal entities (SMEs and micro businesses only). RB is represented by the following sub-segments: (1) mass retail segment, (2) mass affluent segment (through our SOLO brand) and high-net-worth individuals (through our Wealth Management private banking services in Georgia and internationally through representative offices in London and Istanbul, and a subsidiary in Tel Aviv), and (3) SMEs and micro businesses - MSMEs.

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

INCOME STATEMENT HIGHLIGHTS [2]

 

 

 

 

 

Net interest income 

173,526

135,330

28.2%

161,167

7.7%

Net fee and commission income 

45,444

37,624

20.8%

50,116

-9.3%

Net foreign currency gain

32,154

11,595

177.3%

17,234

86.6%

Net other income

1,471

9,073

-83.8%

3,527

-58.3%

Operating income

252,595

193,622

30.5%

232,044

8.9%

Salaries and other employee benefits

(57,300)

(41,868)

36.9%

(59,875)

-4.3%

Administrative expenses

(25,952)

(18,742)

38.5%

(33,965)

-23.6%

Depreciation, amortisation and impairment

(21,092)

(19,210)

9.8%

(21,622)

-2.5%

Other operating expenses 

(1,401)

(680)

106.0%

(1,079)

29.8%

Operating expenses 

(105,745)

(80,500)

31.4%

(116,541)

-9.3%

Profit / (loss) from associate

126

167

-24.6%

128

-1.6%

Operating income before cost of risk

146,976

113,289

29.7%

115,631

27.1%

Cost of risk

(50,790)

(31,327)

62.1%

(20,003)

153.9%

Net operating income before non-recurring items

96,186

81,962

17.4%

95,628

0.6%

Net non-recurring items 

69

156

-55.8%

(11)

NMF

Profit before income tax expense

96,255

82,118

17.2%

95,617

0.7%

Income tax expense

(9,946)

(6,003)

65.7%

(7,897)

25.9%

Profit

86,309

76,115

13.4%

87,720

-1.6%

 






BALANCE SHEET HIGHLIGHTS






Net loans

10,740,353

9,079,628

18.3%

10,349,776

3.8%

Net loans, GEL

6,491,405

5,003,957

29.7%

6,201,310

4.7%

Net loans, FC

4,248,948

4,075,671

4.3%

4,148,466

2.4%

Client deposits

9,857,622

8,977,991

9.8%

9,557,682

3.1%

Client deposits, GEL

2,946,915

2,339,089

26.0%

2,904,521

1.5%

Client deposits, FC

6,910,707

6,638,902

4.1%

6,653,161

3.9%

of which:






Time deposits

5,299,269

5,365,754

-1.2%

5,462,952

-3.0%

Time deposits, GEL

1,669,119

1,205,764

38.4%

1,534,172

8.8%

Time deposits, FC

3,630,150

4,159,990

-12.7%

3,928,780

-7.6%

Current accounts and demand deposits

4,558,353

3,612,237

26.2%

4,094,730

11.3%

Current accounts and demand deposits, GEL

1,277,796

1,133,325

12.7%

1,370,349

-6.8%

Current accounts and demand deposits, FC

3,280,557

2,478,912

32.3%

2,724,381

20.4%

Assets under management

1,814,979

1,659,461

9.4%

1,503,529

20.7%

 

 

 

 

 

 

KEY RATIOS 2

 

 

 

 

 

ROAE

18.0%

20.9%


19.7%


Net interest margin

4.7%

4.1%


4.4%


Cost of credit risk ratio

1.9%

1.4%


0.7%


Cost of funds

6.0%

5.3%


6.0%


Loan yield

11.9%

11.1%


11.7%


Loan yield, GEL

15.9%

15.2%


15.6%


Loan yield, FC

5.8%

6.1%


5.8%


Cost of deposits

2.6%

2.7%


2.5%


Cost of deposits, GEL

7.2%

5.9%


6.8%


Cost of deposits, FC

0.6%

1.6%


0.8%


Cost of time deposits

4.1%

3.9%


3.9%


Cost of time deposits, GEL

11.1%

9.5%


10.7%


Cost of time deposits, FC

1.1%

2.3%


1.4%


Cost of current accounts and demand deposits

0.7%

1.0%


0.7%


Cost of current accounts and demand deposits, GEL

2.4%

2.4%


2.2%


Cost of current accounts and demand deposits, FC

0.0%

0.3%


0.0%


Cost / income ratio

41.9%

41.6%


50.2%


 

Performance highlights

§ Retail Banking generated strong operating income of GEL 252.6mln in 1Q22 (up 30.5% y-o-y and up 8.9% q-o-q). Strong net interest income and net fee and commission income generation together with higher net foreign currency gains were the main contributors to the y-o-y increase in operating income, while net interest income and client-driven net foreign currency gains drove the q-o-q growth in operating income in the first quarter of 2022.  

§ RB net interest income was up 28.2% y-o-y and up 7.7% q-o-q in 1Q22. NIM was 4.7% in 1Q22 (up 60bps y-o-y and up 30bps q-o-q). The increase in NIM was mainly driven by higher loan yield (up 80bps y-o-y and up 20bps q-o-q in 1Q22) coupled with the successful deployment of some excess liquidity.  

§ RB net loan book was GEL 10,740.4mln at 31 March 2021, up 18.3% y-o-y and up 3.8% q-o-q. On a constant currency basis, net loan book increased by 24.2% y-o-y and by 4.0% q-o-q in 1Q22. The local currency denominated loan book increased by 29.7% y-o-y and by 4.7% q-o-q, while the foreign currency denominated loan book increased by 4.3% y-o-y and by 2.4% q-o-q in 1Q22. As a result, the local currency denominated loan book represented 60.4% of the Retail Banking loan book at 31 March 2022, compared with 55.1% at 31 March 2021 and 59.9% at 31 December 2021. The consumer loan portfolio, which has historically been most sensitive to foreign currency risk, is now almost completely de - dollarised, while the share of retail mortgage loans in local currency was 51 .6 % at 31 March 2022, compared with 46.3% at 31 March 2021 and 50.5% at 31 December 2021.

§ The y-o-y loan book growth was mainly driven by strong growth of the consumer, micro and SME portfolios:

RETAIL BANKING LOAN BOOK BY PRODUCTS

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

 

Loan originations






 

Consumer loans

808,569

455,590

77.5%

858,067

-5.8%

 

Mortgage loans

319,661

420,064

-23.9%

484,407

-34.0%

 

Micro loans

413,170

408,581

1.1%

497,325

-16.9%

 

SME loans

364,333

371,256

-1.9%

434,009

-16.1%

 







 

Outstanding balance






 

Consumer loans

2,724,182

1,809,839

50.5%

2,567,361

6.1%

 

Mortgage loans

3,987,191

3,812,962

4.6%

3,956,204

0.8%

 

Micro loans

2,101,736

1,783,166

17.9%

1,980,691

6.1%

 

SME loans

1,703,041

1,505,649

13.1%

1,608,857

5.9%

 

§ RB client deposits stood at GEL 9,857.6mln at 31 March 2022, up 9.8% y-o-y and up 3.1% q-o-q. The share of foreign currency denominated deposits was 70.1% at 31 March 2022, down from 73.9% at 31 March 2021 and up from 69.6% at 31 December 2021. The cost of foreign currency denominated deposits was 0.6% in 1Q22 (down 100bps y-o-y and down 20bps q-o-q), while the cost of local currency denominated deposits was 7.2% in 1Q22 (up 130bps y-o-y and up 40bps q-o-q). The spread between the cost of RB's client deposits in local currency and foreign currency was 6.6ppts in 1Q22 (GEL: 7.2%; FC: 0.6%), compared with 4.3ppts in 1Q21 (GEL: 5.9%; FC: 1.6%) and 6.0ppts in 4Q21 (GEL: 6.8%; FC: 0.8%).  

§ Retail Banking net fee and commission income was up 20.8% y-o-y and down 9.3% q-o-q in 1Q22. The y-o-y increase was mainly driven by strong performance in settlement operations and our client-driven currency conversion operations, whereas the q-o-q decrease was mainly due to seasonally quieter first quarter.

§ Retail Banking's cost of credit risk ratio was 1.9% in 1Q22 ( 1.4% in 1Q21 and 0.7% in 4Q21). Higher cost of credit risk ratio in the first quarter was mainly driven by the fast growth of our unsecured consumer loan portfolio. 

 


§ Our Retail Banking business continued to deliver strong results across key strategic pillars, as demonstrated by the following indicators:

Volume information in GEL thousands

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

Retail Banking active customers [3]






Number of new active customers

57,743

34,754

66.1%

59,306

-2.6%

Number of active customers

1,491,460

1,344,651

10.9%

1,456,505

2.4%

Cards






Number of cards issued

276,023

191,547

44.1%

432,685

-36.2%

Number of cards outstanding

2,342,189

2,111,254

10.9%

2,290,716

2.2%

Express Pay terminals






Number of Express Pay terminals

3,122

3,125

-0.1%

3,134

-0.4%

Number of transactions via Express Pay terminals

19,090,517

16,784,029

13.7%

21,102,054

-9.5%

Volume of transactions via Express Pay terminals

3,112,873

2,322,601

34.0%

3,426,763

-9.2%

POS terminals






Number of desks

27,706

22,889

21.0%

27,286

1.5%

Number of contracted merchants

17,794

13,298

33.8%

17,404

2.2%

Number of POS terminals

39,086

30,053

30.1%

38,514

1.5%

Number of transactions via POS terminals

44,998,835

27,455,781

63.9%

44,609,427

0.9%

Volume of transactions via POS terminals

1,305,111

705,118

85.1%

1,386,223

-5.9%

Mobile and internet banking






Number of monthly active users [4]

892,316

727,367

22.7%

852,733

4.6%

Number of transactions via internet bank

1,019,795

918,907

11.0%

1,093,956

-6.8%

Volume of transactions via internet bank

659,219

584,089

12.9%

629,887

4.7%

Number of transactions via mobile bank

34,249,288

21,242,482

61.2%

34,308,520

-0.2%

Volume of transactions via mobile bank

5,870,854

3,279,566

79.0%

5,994,578

-2.1%

§ The Bank had around 1.5 million monthly active Retail Banking customers at 31 March 2022, up 10.9% y-o-y and up 2.4% q-o-q, reflecting the strength of our franchise and the increasing engagement of our customers. In the first quarter of 2022, we changed the definition of active customer to account only for those customers who were active within the past month.

§ Digital channels . We have continued to develop our digital channels and provide superior digital experience. 96.6% of total transactions were executed through digital channels [5] in 1Q22.

§ mBank and iBank. We continuously develop our mobile application and internet banking platform to increase customer activity and product sales through these channels. At 31 March 2022, 892,316 individuals were monthly active users (MAU) of our mBank/iBank, up 22.7% y-o-y and up 4.6% q-o-q. 44.6% of these individuals were daily active users. The share of MAU in active individual customers was 62.4% at 31 March 2022, compared with 56.4% at 31 March 2021 and 61.2% at 31 December 2021. The number and volume of transactions done via mBank/iBank increased significantly y-o-y in 1Q22. In the first quarter of 2022, 53.7% of total transactions went through mBank/iBank, an increase from 45.9% in 1Q21 and 50.9% in 4Q21. We are now focusing on increasing the product offloading rate and have made good progress. In 1Q22, product offloading to digital channels was 35.0%, up from 19.3% in 1Q21 and 28.4% in 4Q21.

§ Business iBank and mBank. The number of active Business iBank and mBank users reached 42,899 at 31 March 2022 (up 33.2% y-o-y and up 3.5% q-o-q). The number and volume of transactions through mBank/iBank also grew strongly y-o-y in 1Q22 (up 56.6% and 46.0%, respectively). Overall, 97.7% of transactions of legal entities were executed through Business iBank/mBank in 1Q22.

§ Our premium banking segment comprises two directions - SOLO and Wealth Management. Following structural changes in senior management, starting from 3Q21, we reclassified the Wealth Management business from Corporate and Investment Banking to the Retail Banking segment, under Premium Banking. The comparative periods have been restated accordingly:

§ SOLO continued to grow and invest in its lifestyle brand. We have 11 SOLO lounges - nine are located in Tbilisi, the capital of Georgia, and two in major regional cities of Georgia. The number of active SOLO clients reached 71,886 at 31 March 2022 (60,363 at 31 March 2021 and 68,818 at 31 December 2021). While active SOLO clients represent around 5% of our active Retail Banking client base, they contributed 27.9% to our Retail Banking gross loan book, 32.5% to Retail Banking deposits, 24.0% and 17.8% to Retail Banking net interest income and net fee and commission income, respectively, in 1Q22. The net fee and commission income from the SOLO segment was GEL 6.3mln in 1Q22 (down 6.6% y-o-y and down 38.9% q-o-q).

§ Wealth Management continues to focus on profitable growth by diversifying its offerings. Wealth Management has a strong international presence and diversified customer base across multiple geographies. We served 1,492 active wealth management customers from 70 countries as at 31 March 2022, compared with 1,396 active customers as at 31 March 2021 and 1,440 active customers as at 31 December 2021.

§ Wealth Management's AUM was GEL 1,815.0mln at 31 March 2022, up 9.4% y-o-y and up 20.7% q-o-q . The AUM comprises deposits and global certificates of deposit held by Wealth Management clients. In addition, the Bank's Wealth Management customers' investments in assets which are held through Galt & Taggart was GEL 740.9mln at 31 March 2022, down 17.0% y-o-y and down 15.8% q-o-q.

§ MSME banking. The number of MSME segment active clients reached 62,387 at 31 March 2022, up 15.6% y-o-y and up 0.8% q-o-q. MSME's gross loan portfolio reached GEL 4,208.0mln (up 20.9% y-o-y and up 6.4% q-o-q) and client deposits and notes amounted to GEL 1,182.1mln at 31 March 2022 (up 20.8% y-o-y and up 2.6% q-o-q). The MSME segment generated strong operating income of GEL 69.5mln in 1Q22 (up 30.4% y-o-y and up 6.6% q-o-q).

§ Our digital ecosystem comprises four business verticals: real estate marketplace (area.ge), e-commerce marketplace (extra.ge), point of sale solutions (optimo.ge), and logistics services (izibox.ge). Throughout the first quarter, we have continued to develop these businesses, including a redesign of mobile application for extra.ge, the launch of the HORECA functionality on optimo.ge and the addition of other new functionalities.

500 Georgia Acceleration programme (launched in 2020 in partnership with 500 Startups and Georgia's Innovation and Technology Agency to help accelerate the development of Georgian and international early-stage startups operating in the region). During 2020 and 2021, 28 companies from eleven different business verticals completed the programme and joined our Digital Area ecosystem. In 3Q21, four winning startups successfully completed the final acceleration process in San Francisco. Since the launch, the participating startups have raised more than US$ 10.5 million from international investors and venture capital funds over the programme duration, created 200+ jobs, have 627,000+ users, 100+ new partnerships and generated more than GEL 8mln in revenue.

Since 2018, the Group has invested c.US$ 9.1 million in the development of the Digital Area ecosystem. The Group plans an additional investment of US$ 3-8 million during 2022-2023.



 

§ Retail Banking recorded a profit of GEL 86.3mln in 1Q22 (up 13.4% y-o-y and down 1.6% q-o-q). Retail Banking ROAE was 18.0% in 1Q22 (20.9% in 1Q21 and 19.7% in 4Q21).

CORPORATE AND INVESTMENT BANKING (CIB)8

CIB provides (1) loans and other credit facilities to Georgia's large corporate clients and other legal entities, excluding SMEs and micro businesses; (2) services such as funds transfers and settlements services, currency conversion operations, trade finance services and documentary operations as well as the handling of savings and term deposits; (3) finance lease facilities through the Bank's leasing operations arm, the Georgian Leasing Company; and (4) corporate advisory, debt and equity capital markets research and brokerage services through Galt & Taggart.

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

INCOME STATEMENT HIGHLIGHTS [6]

 

 

 

 

 

Net interest income 

87,581

68,650

27.6%

96,619

-9.4%

Net fee and commission income 

12,294

9,416

30.6%

13,175

-6.7%

Net foreign currency gain

20,370

4,035

404.8%

13,788

47.7%

Net other income

2,986

14,771

-79.8%

6,377

-53.2%

Operating income

123,231

96,872

27.2%

129,959

-5.2%

Salaries and other employee benefits

(14,519)

(13,092)

10.9%

(14,387)

0.9%

Administrative expenses

(3,446)

(3,088)

11.6%

(5,397)

-36.1%

Depreciation, amortisation and impairment

(2,238)

(2,196)

1.9%

(2,313)

-3.2%

Other operating expenses 

(335)

(221)

51.6%

(341)

-1.8%

Operating expenses 

(20,538)

(18,597)

10.4%

(22,438)

-8.5%

Operating income before cost of risk

102,693

78,275

31.2%

107,521

-4.5%

Cost of risk 

84,724

(12,035)

NMF

12,730

565.5%

Net operating income before non-recurring items

187,417

66,240

182.9%

120,251

55.9%

Net non-recurring items 

-

(73)

-100.0%

(1)

-100.0%

Profit before income tax expense

187,417

66,167

183.2%

120,250

55.9%

Income tax expense

(14,617)

(6,695)

118.3%

(11,247)

30.0%

Profit

172,800

59,472

190.6%

109,003

58.5%

 






BALANCE SHEET HIGHLIGHTS






Net loans and finance lease receivables

4,846,686

4,722,191

2.6%

5,100,938

-5.0%

Net loans and finance lease receivables, GEL

1,054,455

979,614

7.6%

1,113,914

-5.3%

Net loans and finance lease receivables, FC

3,792,231

3,742,577

1.3%

3,987,024

-4.9%

Client deposits

4,194,888

4,560,098

-8.0%

4,015,449

4.5%

Client deposits, GEL

2,922,461

2,835,949

3.1%

2,559,463

14.2%

Client deposits, FC

1,272,427

1,724,149

-26.2%

1,455,986

-12.6%

Time deposits

1,392,549

1,861,804

-25.2%

1,258,019

10.7%

Time deposits, GEL

1,270,350

1,614,239

-21.3%

1,106,874

14.8%

Time deposits, FC

122,199

247,565

-50.6%

151,145

-19.2%

Current accounts and demand deposits

2,802,339

2,698,294

3.9%

2,757,430

1.6%

Current accounts and demand deposits, GEL

1,652,111

1,221,710

35.2%

1,452,589

13.7%

Current accounts and demand deposits, FC

1,150,228

1,476,584

-22.1%

1,304,841

-11.8%

Letters of credit and guarantees, standalone (off-balance sheet item)

1,706,792

1,640,556

4.0%

1,728,569

-1.3%

Assets under management

1,409,515

1,432,001

-1.6%

1,469,315

-4.1%

 






RATIOS






ROAE

63.5%

23.9%


39.2%

 

Net interest margin

5.4%

4.3%


5.8%

 

Cost of credit risk ratio

-3.3%

-0.2%


-1.8%

 

Cost of funds

3.2%

2.8%


3.0%

 

Loan yield

9.1%

8.6%


9.2%

 

Loan yield, GEL

14.7%

12.2%


14.3%

 

Loan yield, FC

7.6%

7.6%


7.8%

 

Cost of deposits

6.3%

5.6%


5.6%

 

Cost of deposits, GEL

9.4%

8.1%


8.4%

 

Cost of deposits, FC

0.0%

0.8%


0.3%

 

Cost of time deposits

10.2%

8.3%


9.0%

 

Cost of time deposits, GEL

11.6%

9.2%


10.1%

 

Cost of time deposits, FC

0.0%

1.9%


1.9%

 

Current accounts and demand deposits

4.3%

3.1%


4.0%

 

Current accounts and demand deposits, GEL

7.7%

6.3%


7.1%

 

Current accounts and demand deposits, FC

-0.1%

0.6%


0.1%

 

Cost / income ratio

16.7%

19.2%


17.3%

 

Concentration of top ten clients

6.4%

9.5%

 

8.3%

 

 

Performance highlights

§ Corporate and Investment Banking's operating income was GEL 123.2mln in 1Q22 (up 27.2% y-o-y and down 5.2% q-o-q). The y-o-y increase was driven by strong net interest income and net fee and commission income generation as well as higher net foreign currency gains, while the q-o-q decrease was due to reduced net interest income, net fee and commission income and net other income compared with the previous quarter, partially offset by strong net foreign currency gains during the quarter.

§ CIB's net interest income increased by 27.6% y-o-y and decreased by 9.4% q-o-q in the first quarter of 2022. CIB's NIM was 5.4% in 1Q22 (up 110bps y-o-y and down 40bps q-o-q).The q-o-q decrease in NIM was mainly driven by lower loan yield (down 10bps q-o-q) coupled with increased cost of funds (up 20bps q-o-q).

§ CIB's net fee and commission income was GEL 12.3mln in 1Q22 (up 30.6% y-o-y and down 6.7% q-o-q). The y-o-y growth was largely driven by strong income generation from settlement operations and guarantees and letters of credit issued, whereas the q-o-q decrease was due to lower activity in the first quarter.

§ CIB's loan book and dollarisation . CIB's net loans and finance lease receivables stood at GEL 4,846.7mln at 31 March 2022, up 2.6% y-o-y and down 5.0% q-o-q. On a constant currency basis, CIB's portfolio was up 12.8% y-o-y and down 4.5% q-o-q. Foreign currency denominated net loans represented 78.2% of CIB's loan portfolio at 31 March 2022 (79.3% at 31 March 2021 and 78.2% at 31 December 2021). At 31 March 2022, 41.4% of gross CIB loans were issued in foreign currency with minimal exposure to foreign currency risk, while 37.1% of gross CIB loans were issued in foreign currency with exposure to foreign currency risk. The concentration of top ten CIB clients was down to 6.4% at 31 March 2022 (9.5% at 31 March 2021 and 8.3% at 31 December 2021).

§ Dollarisation of CIB deposits was 30.3% at 31 March 2022, compared with 37.8% at 31 March 2021 and 36.3% at 31 December 2021.

§ Net other income . The y-o-q and the q-o-q decrease was due to the high base last year driven by net gains from the sale of real estate properties and investment securities.

§ CIB's cost of risk in 1Q22 reflected a combination of the following factors:

§ Cost of credit risk. CIB's cost of credit risk was a net gain of 3.3% in 1Q22 (a net gain of 0.2% in 1Q21 and a net gain of 1.8% in 4Q21). The Group recorded a GEL 41.6mln reversal of provisions on loans to customers and finance lease receivables in 1Q22, primarily driven by the recovery of several corporate loans during the period.

§ Expected credit loss and impairment charge on other assets and provisions in the first quarter of 2022 mainly comprised a GEL 44.3mln reversal of expenses previously paid for some legal fees.

§ As a result, CIB recorded a profit of GEL 172. 8 mln in the first quarter of 2022 (up 190.6% y-o-y and up 58.5% q-o-q). CIB's ROAE was 63.5% in 1Q22 (23.9% in 1Q21 and 39.2% in 4Q21).

 

Performance highlights of Investment Management operations

§ We offer investment management services through our subsidiary, Galt & Taggart, a leading investment bank in Georgia, comprising brokerage services, debt and equity capital markets research and corporate advisory. We focus on profitable growth by unlocking the potential of retail brokerage and fully digitising our brokerage services.

§ The Investment Management's AUM , consisting of Galt & Taggart brokerage client assets, stood at GEL 1,409.5mln at 31 March 2022, down 1.6% y-o-y and down 4.1% q-o-q.

§ Our brokerage business demonstrated solid performance in the first quarter of 2022. Gross revenue was GEL 2.3mln in 1Q22 (up 13.1% y-o-y and up 19.7% q-o-q). Our online brokerage offered in partnership with Saxo Bank, under a white label agreement, and BoG Investments, offered in partnership with a U.S. brokerage house DriveWealth, generated a gross revenue of GEL 1.5mln in 1Q22 (up 1.3% y-o-y and up 16.3% q-o-q).

We see upside in the brokerage business in Georgia. Historically, we have focused on providing brokerage services to our Wealth Management customers, whereas the retail investor participation in the securities market has been insignificant. We are now extending our offerings to the wider retail and mass affluent segments.

§ Galt & Taggart's investment banking direction has an extensive track record of providing corporate advisory and capital markets services in Georgia, participating in and arranging some of the biggest transactions in the country:

In January 2022, Galt & Taggart acted as the sole placement agent and manager for the inaugural US$ 15 million bond issuance by the largest shopping mall operator in Georgia. The bonds were successfully placed at the lowest fixed coupon of 6.75% for the first time by non-financial issuers on the local market.

In 2021, Galt & Taggart was awarded a contract to lead capital market support programme funded by the European Union and implemented by the EBRD's Capital & Financial Markets Development team. Key objective of the programme is to facilitate the development of capital markets in Georgia. In the first quarter of 2022, the first phase of the programme, which included identifying barriers and possibilities of the Georgian capital market, was completed. Currently, the second phase, involving the implementation of a capital market incentive mechanism and increasing understanding of capital markets, is in progress.

 



 

§ Galt & Taggart is a leading research house in Georgia, supporting our brokerage business and CIB activities with an in-depth quality macro and sector research coverage. Currently, we have more than 7,600 unique subscribers, and our research is available on major international platforms, including Bloomberg, Capital IQ, and Refinitiv.

SELECTED FINANCIAL AND OPERATING INFORMATION

 

INCOME STATEMENT

BANK OF GEORGIA GROUP CONSOLIDATED

GEL thousands, unless otherwise noted

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

 

 

 

 

 

 

 

 

Interest income 

521,294

428,580

21.6%

509,563

2.3%

 

Interest expense 

(249,844)

(216,248)

15.5%

(239,492)

4.3%

 

Net interest income 

271,450

212,332

27.8%

270,071

0.5%

 

Fee and commission income 

106,673

76,446

39.5%

113,664

-6.2%

 

Fee and commission expense 

(47,841)

(27,796)

72.1%

(49,564)

-3.5%

 

Net fee and commission income 

58,832

48,650

20.9%

64,100

-8.2%

 

Net foreign currency gain

64,484

19,176

236.3%

34,495

86.9%

 

Net other income

983

23,482

-95.8%

10,579

-90.7%

 

Operating income 

395,749

303,640

30.3%

379,245

4.4%

 

Salaries and other employee benefits

(78,329)

(60,223)

30.1%

(80,501)

-2.7%

 

Administrative expenses

(33,702)

(23,563)

43.0%

(43,552)

-22.6%

 

Depreciation, amortisation and impairment

(24,627)

(22,561)

9.2%

(25,256)

-2.5%

 

Other operating expenses 

(1,697)

(1,012)

67.7%

(1,463)

16.0%

 

Operating expenses 

(138,355)

(107,359)

28.9%

(150,772)

-8.2%

 

Profit / (loss) from associates

126

167

-24.6%

128

-1.6%

 

Operating income before cost of risk 

257,520

196,448

31.1%

228,601

12.7%

 

Expected credit loss on loans to customers

(29,856)

(28,236)

5.7%

9,836

NMF

 

Expected credit loss on finance lease receivables

(1,284)

(931)

37.9%

(3,406)

-62.3%

 

Other expected credit loss and impairment charge on other assets and provisions

38,707

(14,950)

NMF

(14,174)

NMF

 

Cost of risk 

7,567

(44,117)

NMF

(7,744)

NMF

 

Net operating income before non-recurring items

265,087

152,331

74.0%

220,857

20.0%

 

Net non-recurring items 

48

17

182.4%

(62)

NMF

 

Profit before income tax expense

265,135

152,348

74.0%

220,795

20.1%

 

Income tax expense

(24,563)

(13,424)

83.0%

(20,076)

22.4%

 

Profit

240,572

138,924

73.2%

200,719

19.9%

 







 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

- shareholders of the Group

239,715

138,214

73.4%

199,889

19.9%

 

  - non-controlling interests

857

710

20.7%

830

3.3%

 

 

 

 

 

 

 

 

Earnings per share (basic)

5.06

2.87

76.3%

4.25

19.1%

 

Earnings per share (diluted)

5.00

2.87

74.2%

4.12

21.4%

 

 

 

 


 

BALANCE SHEET

BANK OF GEORGIA GROUP CONSOLIDATED

GEL thousands, unless otherwise noted

Mar-22

Mar-21

Change

y-o-y

Dec-21

Change

q-o-q

 

 

 

 

 

 

Cash and cash equivalents

1,632,690

2,361,663

-30.9%

1,520,562

7.4%

Amounts due from credit institutions

1,978,568

2,200,803

-10.1%

1,931,390

2.4%

Investment securities

3,174,503

2,406,405

31.9%

2,595,664

22.3%

Loans to customers and finance lease receivables

16,289,380

14,601,275

11.6%

16,168,973

0.7%

Accounts receivable and other loans

3,847

6,051

-36.4%

3,680

4.5%

Prepayments

47,277

33,921

39.4%

40,878

15.7%

Inventories

10,698

10,775

-0.7%

11,514

-7.1%

Right-of-use assets

85,420

81,056

5.4%

80,186

6.5%

Investment property

222,931

246,441

-9.5%

226,849

-1.7%

Property and equipment

384,828

385,352

-0.1%

378,808

1.6%

Goodwill

33,351

33,351

0.0%

33,351

0.0%

Intangible assets

145,177

129,044

12.5%

144,251

0.6%

Income tax assets

172

3,668

-95.3%

292

-41.1%

Other assets

215,125

208,135

3.4%

246,947

-12.9%

Assets held for sale

46,262

44,305

4.4%

46,731

-1.0%

Total assets

24,270,229

22,752,245

6.7%

23,430,076

3.6%

Client deposits and notes

14,517,253

14,003,209

3.7%

14,038,002

3.4%

Amounts owed to credit institutions

4,676,861

4,039,250

15.8%

4,318,445

8.3%

Debt securities issued

1,415,940

1,653,399

-14.4%

1,518,685

-6.8%

Lease liabilities

93,807

97,488

-3.8%

87,662

7.0%

Accruals and deferred income

86,154

59,455

44.9%

80,157

7.5%

Income tax liabilities

49,887

57,541

-13.3%

110,868

-55.0%

Other liabilities

156,488

154,253

1.4%

183,349

-14.7%

Total liabilities

20,996,390

20,064,595

4.6%

20,337,168

3.2%

Share capital

1,618

1,618

0.0%

1,618

0.0%

Additional paid-in capital

478,149

532,787

-10.3%

492,243

-2.9%

Treasury shares

(58)

(34)

70.6%

(75)

-22.7%

Other reserves

(38,626)

61,857

NMF

(3,223)

NMF

Retained earnings

2,818,269

2,079,362

35.5%

2,588,463

8.9%

Total equity attributable to shareholders of the Group

3,259,352

2,675,590

21.8%

3,079,026

5.9%

Non-controlling interests

14,487

12,060

20.1%

13,882

4.4%

Total equity

3,273,839

2,687,650

21.8%

3,092,908

5.8%

Total liabilities and equity

24,270,229

22,752,245

6.7%

23,430,076

3.6%

Book value per share

68.77

55.59

23.7%

65.65

4.8%

 

 


BELARUSKY NARODNY BANK (BNB)

 

INCOME STATEMENT HIGHLIGHTS

1Q22

1Q21

Change

y-o-y

4Q21

Change

q-o-q

GEL thousands, unless otherwise stated

 

 

 

 

 

 

 

 

 

 

 

 Net interest income 

10,325

8,347

23.7%

12,277

-15.9%

 Net fee and commission income 

1,054

1,570

-32.9%

769

37.1%

 Net foreign currency gain

11,960

3,546

237.3%

3,473

244.4%

 Net other income

(3,225)

(237)

NMF

930

NMF

 Operating income

20,114

13,226

52.1%

17,449

15.3%

 Operating expenses 

(12,263)

(8,342)

47.0%

(12,000)

2.2%

 Operating income before cost of risk

7,851

4,884

60.7%

5,449

44.1%

 Cost of risk 

(26,367)

(755)

NMF

(471)

NMF

 Net non-recurring items 

(21)

(66)

-68.2%

(50)

-58.0%

 Profit before income tax expense

(18,537)

4,063

NMF

4,928

NMF

 Income tax expense

-

(726)

-100.0%

(932)

-100.0%

  Profit

(18,537)

3,337

NMF

3,996

NMF

 

 

BALANCE SHEET HIGHLIGHTS

Mar-22

Mar-21

Change

y-o-y

Dec-21

Change

q-o-q

GEL thousands, unless otherwise stated






 






Cash and cash equivalents

218,316

192,338

13.5%

186,050

17.3%

Amounts due from credit institutions

8,764

66,673

-86.9%

8,719

0.5%

Investment securities

50,693

94,952

-46.6%

69,794

-27.4%

Loans to customers and finance lease receivables

649,218

705,261

-7.9%

662,297

-2.0%

Other assets

44,484

50,418

-11.8%

54,060

-17.7%

Total assets

971,475

1,109,642

-12.5%

980,920

-1.0%

Client deposits and notes

556,649

587,724

-5.3%

516,634

7.7%

Amounts owed to credit institutions

301,572

347,018

-13.1%

309,812

-2.7%

Debt securities issued

7,772

20,761

-62.6%

7,327

6.1%

Other liabilities

11,171

17,498

-36.2%

12,490

-10.6%

Total liabilities

877,164

973,001

-9.8%

846,263

3.7%

Total equity

94,311

136,641

-31.0%

134,657

-30.0%

Total liabilities and equity

971,475

1,109,642

-12.5%

980,920

-1.0%

 



 

 

KEY RATIOS

1Q22

1Q21

4Q21

 

Profitability




ROAA, annualised

4.1%

2.5%

3.5%

ROAE, annualised

30.7%

21.5%

26.4%

RB ROAE

18.0%

20.9%

19.7%

CIB ROAE

63.5%

23.9%

39.2%

Net interest margin, annualised

5.3%

4.5%

5.3%

RB NIM

4.7%

4.1%

4.4%

CIB NIM

5.4%

4.3%

5.8%

Loan yield, annualised

11.1%

10.4%

11.0%

RB Loan yield

11.9%

11.1%

11.7%

CIB Loan yield

9.1%

8.6%

9.2%

Liquid assets yield, annualised

4.3%

3.1%

4.0%

Cost of funds, annualised

5.0%

4.5%

4.8%

Cost of client deposits and notes, annualised

3.7%

3.8%

3.5%

RB Cost of client deposits and notes

2.6%

2.7%

2.5%

CIB Cost of client deposits and notes

6.3%

5.6%

5.6%

Cost of amounts owed to credit institutions, annualised

8.2%

6.2%

8.3%

Cost of debt securities issued

7.0%

6.9%

6.8%

Operating leverage, y-o-y

1.5%

9.3%

-0.4%

Operating leverage, q-o-q

12.6%

10.9%

-8.8%

Efficiency




Cost / income

35.0%

35.4%

39.8%

RB Cost / income

41.9%

41.6%

50.2%

CIB Cost /income

16.7%

19.2%

17.3%

Liquidity

 

 

 

NBG liquidity coverage ratio (minimum requirement 100%)

116.2%

149.3%

124.0%

Liquid assets to total liabilities

32.3%

34.7%

29.7%

Net loans to client deposits and notes

112.2%

104.3%

115.2%

Net loans to client deposits and notes + DFIs

97.9%

90.0%

100.0%

Leverage (times)

  6.4

  7.5

  6.6

Asset quality:




NPLs (GEL thousands)

424,405

534,626

394,720

NPLs to gross loans to clients

2.5%

3.6%

2.4%

NPL coverage ratio

97.3%

77.5%

95.5%

NPL coverage ratio, adjusted for discounted value of collateral

153.0%

127.8%

147.7%

Cost of credit risk, annualised

0.8%

0.8%

-0.2%

RB Cost of credit risk

1.9%

1.4%

0.7%

CIB Cost of credit risk

-3.3%

-0.2%

-1.8%

Capital adequacy:




NBG (Basel III) CET1 capital adequacy ratio

13.7%

11.2%

13.2%

Minimum regulatory requirement

11.8%

7.8%

11.5%

NBG (Basel III) Tier I capital adequacy ratio

15.4%

13.3%

15.0%

Minimum regulatory requirement

14.1%

9.8%

13.6%

NBG (Basel III) Total capital adequacy ratio

19.7%

18.6%

19.3%

Minimum regulatory requirement

17.6%

13.8%

17.7%


 

 

 

Selected operating data:




Total assets per FTE

3,069

3,054

2,998

Number of active branches, of which:

211

211

211

 - Express branches

106

105

106

 - Bank of Georgia branches

94

95

94

 - SOLO lounges

11

11

11

Number of ATMs

990

963

989

Number of cards outstanding, of which:

2,342,189

2,111,255

2,290,716

 - Debit cards

2,173,562

1,877,281

2,114,813

 - Credit cards

168,627

233,974

175,903

Number of POS terminals

39,086

30,053

38,514

Number of Express Pay terminals

3,122

3,125

3,134


 

 

 

FX Rates:

 

 

 

GEL/US$ exchange rate (period-end)

3.1013

3.4118

3.0976

GEL/GBP exchange rate (period-end)

4.0732

4.6929

4.1737

 

 

Mar-22

Mar-21

Dec-21

Full-time employees (FTE), of which:

7,908

7,450

7,816

 - Full-time employees, BOG standalone

 6,261

 5,889

6,207

 - Full-time employees, BNB

 589

 536

547

 - Full-time employees, other

 1,058

 1,025

1,062


Shares outstanding

Mar-22

Mar-21

Dec-21

Ordinary shares

 47,396,266

 48,130,454

 46,900,982

Treasury shares

 1,773,162

 1,038,974

 2,268,446

Total shares outstanding

 49,169,428

 49,169,428

 49,169,428

 

 


GLOSSARY

 

§ Alternative performance measures (APMs) In this announcement the management uses various APMs, which they believe provide additional useful information for understanding the financial performance of the Group. These APMs are not defined by International Financial Reporting Standards, and may not be directly comparable with other companies who use similar measures. We believe that these APMs provide the best representation of our financial performance as these measures are used by management to evaluate the Group's operating performance and make day-to-day operating decisions

§ Basic earnings per share Profit for the period attributable to shareholders of the Group divided by the weighted average number of outstanding ordinary shares over the same year

§ Book value per share Total equity attributable to shareholders of the Group divided by ordinary shares outstanding at period-end; Ordinary shares outstanding at period-end equals number of ordinary shares at period-end less number of treasury shares at period-end

§ Cost of credit risk Expected loss on loans to customers and finance lease receivables for the period divided by monthly average gross loans to customers and finance lease receivables over the same period

§ Cost of deposits Interest expense on client deposits and notes of the period divided by monthly average client deposits and notes

§ Cost of funds Interest expense of the period divided by monthly average interest bearing liabilities

§ Cost to income ratio Operating expenses divided by operating income

§ Interest-bearing liabilities Amounts owed to credit institutions, client deposits and notes, and debt securities issued

§ Interest-earning assets (excluding cash) Amounts due from credit institutions, investment securities (but excluding corporate shares) and net loans to customers and finance lease receivables

§ Leverage (times) Total liabilities divided by total equity

§ Liquid assets Cash and cash equivalents, amounts due from credit institutions and investment securities

§ Liquidity coverage ratio (LCR) High quality liquid assets (as defined by the NBG) divided by net cash outflows over the next 30 days (as defined by the NBG)

§ Loan yield Interest income from loans to customers and finance lease receivables divided by monthly average gross loans to customers and finance lease receivables

§ NBG (Basel III) Common Equity Tier I (CET1) capital adequacy ratio Common Equity Tier I capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG

§ NBG (Basel III) Tier I capital adequacy ratio Tier I capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG

§ NBG (Basel III) Total capital adequacy ratio Total regulatory capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG

§ Net interest margin (NIM) Net interest income of the period divided by monthly average interest earning assets excluding cash for the same period

§ Net stable funding ratio (NSFR) Available amount of stable funding (as defined by the NBG) divided by the required amount of stable funding (as defined by the NBG)

§ Non-performing loans (NPLs) The principal and interest on loans overdue for more than 90 days and any additional potential losses estimated by management

§ NPL coverage ratio Allowance for expected credit loss of loans and finance lease receivables divided by NPLs

§ NPL coverage ratio adjusted for discounted value of collateral Allowance for expected credit loss of loans and finance lease receivables divided by NPLs (discounted value of collateral is added back to allowance for expected credit loss)

§ Operating leverage Percentage change in operating income less percentage change in operating expenses

§ Return on average total assets (ROAA) Profit for the period divided by monthly average total assets for the same period

§ Return on average total equity (ROAE) Profit for the period attributable to shareholders of the Group divided by monthly average equity attributable to shareholders of the Group for the same period

§ NMF Not meaningful



 

 

COMPANY INFORMATION

 

Bank of Georgia Group PLC

 

Registered Address

42 Brook Street

London W1K 5DB

United Kingdom

www.bankofgeorgiagroup.com

Registered under number 10917019 in England and Wales

 

Secretary

Link Company Matters Limited

65 Gresham Street

London EC2V 7NQ

United Kingdom

 

Stock Listing

London Stock Exchange PLC's Main Market for listed securities

Ticker: "BGEO.LN"

 

Contact Information

Bank of Georgia Group PLC Investor Relations

Telephone: +44(0) 203 178 4052; +995 322 444444 (7515)

E-mail: ir@bog.ge

 

Auditors

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London E14 5EY

United Kingdom

 

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS13 8AE

United Kingdom

 

Please note that Investor Centre is a free, secure online service run by our Registrar, Computershare,

giving you convenient access to information on your shareholdings.

Investor Centre Web Address - www.investorcentre.co.uk .

Investor Centre Shareholder Helpline - +44 (0)370 873 5866

 

Share price information

Shareholders can access both the latest and historical prices via the website

www.bankofgeorgiagroup.com



[1] Throughout this announcement, gross loans to customers and respective allowance for impairment are presented net of expected credit loss (ECL) on contractually accrued interest income. These do not have an effect on the net loans to customers balance. Management believes that netted-off balances provide the best representation of the loan portfolio position.

[2] Following structural changes in senior management, starting from the third quarter of 2021, we reclassified Wealth Management business from Corporate and Investment Banking to Retail Banking segment, under Premium Banking. The comparative periods have been restated accordingly.

[3] Active individual customer - an individual who used the Bank's any channel at least once, or performed at least one debit transaction, or was a payroll customer, or had at least one active credit product, or had any type of deposit with a balance above a certain threshold within the past month. Active business customer - a legal entity that used Business mBank or iBank at least once, or had at least one active credit product, or performed at least one debit transaction, or had any type of deposit with a balance above a certain threshold (different for micro, SME, or corporate clients) within the past month.

[4] Users with at least one mBank or iBank login within the past month.

[5] Digital channels comprise mBank and iBank, Express Pay terminals, ATMs, web platforms and call center.

[6] Following structural changes in senior management, starting from the third quarter of 2021, we reclassified Wealth Management business from Corporate and Investment Banking to the Retail Banking segment. The comparative periods have been restated accordingly.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
QRFGPUAPAUPPGBU
UK 100

Latest directors dealings