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Quarterly Report • Nov 12, 2024
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Quarterly Report
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National Storage Mechanism | Additional information 
RNS Number : 7875L
Bank of Georgia Group PLC
12 November 2024
Contents
3Q24 and 9M24 results
Earnings call on 12 November 2024, 14:00 GMT
Segmentation guide
CEO statement
Macroeconomic developments: Georgia
Macroeconomic developments: Armenia
Delivering on our strategic priorities
3Q24 and 9M24 consolidated results
Business Division results
Georgian Financial Services (GFS)
Armenian Financial Services (AFS)
Ameriabank: standalone financial information (not included in consolidated results)
Other Businesses
Consolidated financial information
Additional information
Glossary
Bank of Georgia Group PLC profile
Further information
Forward-looking statements
3Q24 and 9M24 results
Bank of Georgia Group PLC announces the Group's unaudited consolidated financial results for the third quarter and the first nine months 2024. Unless otherwise noted, numbers in this announcement are given for 3Q24 and 9M24 and the year-on-year comparisons are with adjusted figures of 3Q23 and 9M23 and the q-o-q comparisons are with adjusted figures of 2Q24.
The results are based on International Financial Reporting Standards (IFRS) as adopted by the United Kingdom, are unaudited and derived from management accounts.
Earnings call on 12 November 2024, 14:00 GMT
https://bankofgeorgia.zoom.us/j/92412821797?pwd=4yTawOnUWYmwxq2HOWInShx34akrpS.1
Webinar ID: 924 1282 1797
Passcode: 134783
Segmentation guide
Following the acquisition of Ameriabank at the end of March 2024, the Group 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 investment bank JSC Galt and Taggart
· AFS includes CJSC Ameriabank
· Other Businesses includes JSC Belarusky Narodny Bank (BNB) serving retail and SME clients in Belarus, JSC Digital Area - a digital ecosystem in Georgia including e-commerce, ticketing, and inventory management SaaS, Bank of Georgia Group PLC - the holding company, and other small entities and intragroup eliminations.
Bank of Georgia Group PLC delivers 3Q24 consolidated profit of GEL 509.3m and 9M24 adjusted consolidated profit of GEL 1,308.3m
3Q24 consolidated profit was up 42.5% y-o-y to GEL 509.3 million, with a return on average equity standing at 32.1%
· Georgian Financial Services (GFS) delivered a profit of GEL 411.4 million in 3Q24, with a return on equity of 36.7%.
· Armenian Financial Services (AFS) posted a profit of GEL 91.4 million in 3Q24, with a return on equity of 23.1%.
· The Group's loan book increased by 63.4% y-o-y as at 30 September 2024, driven by the consolidation of Ameriabank and a robust, 23.6% growth in GFS.
CEO statement
We delivered another strong quarter, posting a record profit of GEL 509.3 million and an ROE of 32.1%, driven by robust performances in our core business divisions in Georgia and Armenia, supported by lower cost of risk and strong macroeconomic fundamentals. We continued to focus on our strategic priorities and advanced the integration process of Ameriabank, with our various strategic integration workstreams progressing well and bringing the teams together.
The political situation in Georgia has been top of mind for many of our stakeholders recently. As we navigate a period of post-election political tensions which, unsurprisingly and understandably, elevate emotions in everyone, we remain focused on serving the whole of Georgia, supporting our customers and communities as a key systemic universal bank. We do not expect this period to have any significant impact on the economy. Therefore, we maintain our real GDP growth forecasts at 9% and 6% for 2024 and 2025 respectively, with that growth being underpinned by strong domestic demand, resilient external sector inflows, and prudent macroeconomic management.
We are proud that Bank of Georgia has recently been recognised as the World's Best Digital Bank 2024 by Global Finance, competing for this title alongside many prominent global banks. With over 1.5 million monthly active retail digital users in Georgia in September 2024, a remarkable 20.4% increase y-o-y, we are encouraged to see our digital platforms meeting diverse customer needs and receiving global recognition. The connection with our customers is reflected in our Net Promoter Score (NPS) of 67 points, also a remarkable result for any universal bank.
As for our financial performance, Georgian Financial Services has continued its robust growth, with net loans up 21.7% y-o-y and customer deposits up 14.9% y-o-y on a constant currency basis as at 30 September 2024. Operating income in 3Q24 was up 11.0% y-o-y to GEL 683.6 million, mainly driven by strong growth in net interest income. Without the GEL 25 million positive adjustment in net fee and commission income last year, operating income would have increased by 15.7% y-o-y. I mentioned last time that this year we have seen some pressure on operating expenses resulting from double-digit wage growth in the market for the past two years, but these pressures are now stabilising. Overall, profit in Georgian Financial Services was up 17.3% y-o-y in 3Q24 to GEL 411.4 million, with ROE at an exceptional 36.7%. We continue to maintain significant capital buffers and ample liquidity.
Armenian Financial Services also delivered strong results in 3Q24, with the q-o-q loan growth on a constant currency basis of 6.1%, profit reaching GEL 91.4 million and ROE standing at 23.1%. Strong domestic demand and ambitious public infrastructure projects are expected to support the growth momentum in Armenia, with expected real GDP growth of 6.0% in 2024 and 4.9% in 2025, according to IMF, thus providing positive impetus to our banking operations. As our teams continue the integration work, we will start to unlock new opportunities, which, we believe, are significant, especially in the retail segment.
Overall, our business as a whole is performing well, and we keep focusing on supporting our customers with innovative, customer-centric solutions, and delivering strong growth and profitability in our key geographies, Georgia and Armenia.
Archil Gachechiladze
CEO, Bank of Georgia Group PLC
11 November 2024
Macroeconomic developments: Georgia
Strong economic growth
Economic activity accelerated further in 3Q24, with an estimated 11.1% real GDP growth y-o-y. Economic growth remained broad-based, driven by robust consumption and improving external demand. Galt & Taggart forecasts a 9% real GDP expansion for the full year 2024 and 6% growth in 2025. Upsides exist in public infrastructure projects and emerging service industries such as IT, transport and education. While geopolitical instability in the wider region poses downside risks, ample fiscal space and solid international reserves cushion the economy against potential shocks.
Improving external demand
Export of goods increased by a remarkable 25.6% y-o-y in 3Q24, primarily driven by re-exports and increased commodity prices, following modest contractions in the previous quarters. Import of goods rose by only 3.6% y-o-y in 3Q24, narrowing the merchandise trade deficit. Export of services also remained strong amid tourism season and steadily growing proceeds from transportation services. In 3Q24, tourism revenues increased by 8.0% y-o-y, with tourist visits returning to pre-pandemic levels. Money transfers stabilised in 3Q24, registering only a 0.9% y-o-y decline following last year's high base related to migrant inflows. Remittances form the US, EU countries and Israel continued to increase steadily. Overall, external sector inflows are expected to remain robust, supported by diversified income sources and improving conditions in partner economies.
Healthy bank lending
Bank lending remained robust in 3Q24, increasing by 18.8% y-o-y on a constant currency basis, following a 17.8% y-o-y growth in the previous quarter. Business lending continued to drive credit growth. Loan dollarisation declined further by 1.3 ppts y-o-y to 43.9% at the end of September 2024. The banking sector's credit portfolio remained healthy, with the non-performing loans ratio, according to the IMF, at 1.5% at the end of September 2024.
Strong fiscal discipline
In the first nine months of 2024, tax revenues rose by 19.4% y-o-y, driven by strong economic growth and last year's amendments to the corporate income tax code. The Government remains committed to fiscal consolidation, with the fiscal deficit planned at 2.5% of GDP in 2024, matching 2023 levels. The government debt-to-GDP ratio is set to decrease further to 36.5% in 2024, down 2.7 ppts y-o-y.
Low inflation and prudent monetary policy
Inflation remained low in 3Q24, supported by subdued domestic price pressures and stable GEL. Headline CPI inflation was 0.6% y-o-y in September 2024, down from 2.2% in June. Inflation is expected to remain below the National Bank of Georgia's (NBG) 3% target in 2024. The NBG has maintained its policy rate unchanged at 8.0% since May 2024 due to remaining inflation risks related to strong domestic demand and persistent geopolitical tensions.
Stable GEL
The GEL recovered in value against the US dollar in July 2024 after a brief period of weakness in the previous months. Pressures re-emerged in mid-October, driven by one-off large-scale transactions, according to the NBG. The central bank intervened in FX auctions by selling a total of US$ 213m in October to smooth out the volatility. As a result, the GEL remained stable, close to the beginning-of-year level against the US dollar as at 8 November 2024. In the medium term, strong external sector inflows and prudent macroeconomic management are expected to support the Georgian currency.
More information on the Georgian economy and financial sector can be found at https://galtandtaggart.com/en/research/aboutresearch .
Macroeconomic developments: Armenia
Robust economic growth
In Armenia, economic activity remained robust in 3Q24, fuelled by a supportive fiscal stance and easing monetary policy. Economic growth was predominantly driven by the construction, trade, and services sectors. Consumption and investment spending remained strong, while exports slowed. As a result, economic growth moderated to more sustainable levels, with the preliminary estimate of economic activity increasing by 6.3% y-o-y in 3Q24. The IMF projects real GDP growth of 6.0% and 4.9% for 2024 and 2025, respectively. While geopolitical tensions and weakening growth prospects in trading partners' economies present downside risks, improvements in infrastructure and ongoing structural reforms offer upside potential. Macroeconomic policies remain prudent, underpinning the resilience of the Armenian economy.
Resilient external sector and strong Dram
Export of goods normalised in 3Q24, increasing by 49.4% y-o-y, following extraordinary growth in the previous quarters, driven largely by gold re-exports. Imports slowed as well, with a 21.5% y-o-y growth. Export of services also declined, due to reduced tourist inflows and weakening global demand for IT services. However, remittances regained momentum, with total money transfers up 7.5% y-o-y in 3Q24 (vs. a 2.4% decline in 2Q24). Continued strength of merchandise exports and money transfers contributed to the strengthening of the Dram by 4.3% versus the US dollar year-to-date as at 8 November 2024, making it one of the best performing currencies in the region.
Low inflation and continued easing of monetary policy
In 3Q24, inflation remained low, supported by a strong Dram and declining food prices. Headline CPI inflation was 0.6% y-o-y in September 2024, well below the Central Bank of Armenia's (CBA) 4% target. Amid subdued price pressures, the CBA continued its gradual monetary easing, cutting the refinancing rate by a cumulative 2 ppts to 7.25% in as at end-October 2024, following a total reduction of 1.5 ppts in 2023.
Sound banking sector
The banking sector in Armenia remains well-capitalised, liquid and highly profitable. Estimated bank lending growth was 21.7% y-o-y in constant currency terms in 3Q24, following a 19.1% y-o-y growth in the previous quarter. The lending growth was predominantly driven by local currency loans, leading to a further reduction in loan dollarisation (down 1.9 ppts y-o-y to 33.7 by the end of September 2024).
Delivering on our strategic priorities
The main bank
Being the main bank in customers' daily lives by leveraging the digital and payments ecosystems.
Bank of Georgia (BOG)
In October 2024, JSC Bank of Georgia was recognised as the World's Best Digital Bank 2024 by Global Finance.
| Monthly active customers (Retail) | Digital MAU (Retail) | Payment MAU (Retail) | Share of products sold through retail digital channels (Retail) | Monthly active customers (Legal entities) | Digital MAU (Legal entities) |
| 1.9 million | 1.5 million | 1.4 million | 58% (3Q24) | 110K | 87K |
| +12.0% y-o-y | +20.4% y-o-y | +18.5% y-o-y | +11 ppts y-o-y | +19.7% y-o-y | +26.1% y-o-y |
BOG continued to develop its payments acquiring business during the quarter. The volume of payment transactions in BOG's in-store/online POS terminals was up 31.2% y-o-y and 13.3% q-o-q in the third quarter of 2024, to GEL 5.3 bn. In 9M24, the volume of payment transactions totalled GEL 14.0bn (up 33.2% y-o-y). BOG's payments acquiring market share increased to 57.3% in September 2024 (up 2.1 ppts y-o-y).
Ameriabank
Ameriabank had 312 thousand monthly active retail customers as at September 2024 (up 13.5% y-o-y and up 3.8% q-o-q), of which Digital MAU was 188 thousand (up 39.0% y-o-y and up 8.6% q-o-q) [1] .
Excellent customer experience
Anticipating customer needs and wants, and providing relevant products and services.
Bank of Georgia's Net Promoter Score (NPS) was 67 in 3Q24 (59 in 3Q23 and 71 in 2Q24).
Profitable growth
Growing the balance sheet profitably and focusing on areas with high growth potential .
· Georgian Financial Services loan book grew 23.6% y-o-y and 3.6% q-o-q, amounting to GEL 22,444.1 million as at 30 September 2024. Growth on a constant currency basis was 21.7% y-o-y and 4.3% q-o-q.
· Armenian Financial Services loan book grew 3.1% q-o-q (6.1% on a constant currency basis), amounting to GEL 7,955.7 million as at 30 September 2024.
Our key targets for the medium term are:
· c.15% annual growth of the Group's loan book (the target was revised up from c.10% following the acquisition of Ameriabank in March 2024)
· 20%+ return on average equity
· 30-50% annual capital distribution ratio (dividends and share buybacks)
3Q24 and 9M24 consolidated results
In the commentary below, the Group's main Business Divisions are referred to as GFS (Georgian Financial Services) and AFS (Armenian Financial Services). Given the first-time consolidation of Ameriabank's P&L in 2Q24, the y-o-y growth rates at the Group level have been significantly impacted by the consolidation. To see the underlying performance of our business in Georgia, please see pages 10 to 12.
| GEL thousands | 3Q24 | 3Q24 | 3Q24 | 3Q24 | 3Q23 | 3Q23 | 3Q23 | 3Q23 | |
| INCOME STATEMENT HIGHLIGHTS | GROUP | GFS | AFS | OTHER | GROUP | GFS | AFS | OTHER | |
| Interest income | 1,115,448 | 837,908 | 256,769 | 20,771 | 706,871 | 687,296 | - | 19,575 | |
| Interest expense | (474,412) | (371,324) | (95,163) | (7,925) | (286,895) | (281,962) | - | (4,933) | |
| Net interest income | 641,036 | 466,584 | 161,606 | 12,846 | 419,976 | 405,334 | - | 14,642 | |
| Net fee and commission income | 134,100 | 110,887 | 21,104 | 2,109 | 118,949 | 116,661 | - | 2,288 | |
| Net foreign currency gain | 153,023 | 98,214 | 38,744 | 16,065 | 97,790 | 88,396 | - | 9,394 | |
| Net other income | 9,501 | 7,919 | 1,804 | (222) | 5,738 | 5,371 | - | 367 | |
| Operating income | 937,660 | 683,604 | 223,258 | 30,798 | 642,453 | 615,762 | - | 26,691 | |
| Salaries and other employee benefits | (203,484) | (111,225) | (80,604) | (11,655) | (106,739) | (95,523) | - | (11,216) | |
| Administrative expenses | (72,528) | (52,013) | (13,829) | (6,686) | (46,081) | (40,303) | - | (5,778) | |
| Depreciation, amortisation and impairment | (47,285) | (31,446) | (13,212) | (2,627) | (31,247) | (27,776) | - | (3,471) | |
| Other operating expenses | (3,137) | (1,245) | (1,574) | (318) | (1,247) | (692) | - | (555) | |
| Operating expenses | (326,434) | (195,929) | (109,219) | (21,286) | (185,314) | (164,294) | - | (21,020) | |
| Profit from associates | 502 | 389 | - | 113 | 302 | 333 | - | (31) | |
| Operating income before cost of risk | 611,728 | 488,064 | 114,039 | 9,625 | 457,441 | 451,801 | - | 5,640 | |
| Cost of risk | (5,216) | (2,391) | (3,558) | 733 | (35,805) | (38,548) | - | 2,743 | |
| Net operating income before non-recurring items | 606,512 | 485,673 | 110,481 | 10,358 | 421,636 | 413,253 | - | 8,383 | |
| Net non-recurring items | - | - | - | - | 58 | - | - | 58 | |
| Profit before income tax expense | 606,512 | 485,673 | 110,481 | 10,358 | 421,694 | 413,253 | - | 8,441 | |
| Income tax expense | (97,259) | (74,259) | (19,078) | (3,922) | (64,330) | (62,448) | - | (1,882) | |
| Profit | 509,253 | 411,414 | 91,403 | 6,436 | 357,364 | 350,805 | - | 6,559 |
| GEL thousands | 3Q24 | 3Q23 | Change y-o-y |
2Q24 | Change q-o-q |
9M24 | 9M23 | Change y-o-y |
|
| INCOME STATEMENT HIGHLIGHTS | |||||||||
| Net interest income | 641,036 | 419,976 | 52.6% | 618,335 | 3.7% | 1,697,191 | 1,187,785 | 42.9% | |
| Net fee and commission income | 134,100 | 118,949 | 12.7% | 150,662 | -11.0% | 392,564 | 320,416 | 22.5% | |
| Net foreign currency gain | 153,023 | 97,790 | 56.5% | 151,886 | 0.7% | 395,449 | 268,460 | 47.3% | |
| Net other income | 9,501 | 5,738 | 65.6% | 28,112 | -66.2% | 45,406 | 96,476 | -52.9% | |
| Operating income | 937,660 | 642,453 | 45.9% | 948,995 | -1.2% | 2,530,610 | 1,873,137 | 35.1% | |
| Operating expenses | (326,434) | (185,314) | 76.2% | (337,821) | -3.4% | (852,293) | (528,849) | 61.2% | |
| Profit from associates | 502 | 302 | 66.2% | 378 | 32.8% | 978 | 1,202 | -18.6% | |
| Operating income before cost of risk | 611,728 | 457,441 | 33.7% | 611,552 | 0.0% | 1,679,295 | 1,345,490 | 24.8% | |
| Cost of risk | (5,216) | (35,805) | -85.4% | (87,896) | -94.1% | (116,111) | (116,255) | -0.1% | |
| Out of which initial ECL related to assets acquired in business combination | - | - | - | (49,157) | NMF | (49,157) | - | NMF | |
| Net operating income before non-recurring items | 606,512 | 421,636 | 43.8% | 523,656 | 15.8% | 1,563,184 | 1,229,235 | 27.2% | |
| Net non-recurring items | - | 58 | NMF | - | - | - | - | - | |
| Profit before income tax expense and one-off items | 606,512 | 421,694 | 43.8% | 523,656 | 15.8% | 1,563,184 | 1,229,235 | 27.2% | |
| Income tax expense | (97,259) | (64,330) | 51.2% | (93,668) | 3.8% | (254,876) | (183,079) | 39.2% | |
| Profit adjusted for one-off items | 509,253 | 357,364 | 42.5% | 429,988 | 18.4% | 1,308,308 | 1,046,156 | 25.1% | |
| One-off items[2] | - | - | - | 679 | NMF | 669,465 | 21,061 | NMF | |
| Profit | 509,253 | 357,364 | 42.5% | 430,667 | 18.2% | 1,977,773 | 1,067,217 | 85.3% | |
| Basic earnings per share | 11.71 | 8.12 | 44.2% | 9.79 | 19.6% | 45.12 | 23.76 | 89.9% | |
| Diluted earnings per share | 11.49 | 7.92 | 45.1% | 9.62 | 19.4% | 44.29 | 23.22 | 90.7% | |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Sep-23 | Change y-o-y |
Jun-24 | Change q-o-q |
||||
| Liquid assets | 14,253,652 | 10,258,057 | 39.0% | 14,479,764 | -1.6% | ||||
| Cash and cash equivalents | 3,413,286 | 2,959,832 | 15.3% | 3,422,747 | -0.3% | ||||
| Amounts due from credit institutions | 2,560,821 | 1,878,849 | 36.3% | 2,710,729 | -5.5% | ||||
| Investment securities | 8,279,545 | 5,419,376 | 52.8% | 8,346,288 | -0.8% | ||||
| Loans to customers, factoring and finance lease receivables[3] | 31,058,958 | 19,010,599 | 63.4% | 30,081,566 | 3.2% | ||||
| Property and equipment | 534,234 | 430,181 | 24.2% | 529,715 | 0.9% | ||||
| All remaining assets | 1,518,584 | 1,150,976 | 31.9% | 1,437,376 | 5.6% | ||||
| Total assets | 47,365,428 | 30,849,813 | 53.5% | 46,528,421 | 1.8% | ||||
| Client deposits and notes | 31,872,416 | 21,743,543 | 46.6% | 30,706,272 | 3.8% | ||||
| Amounts owed to credit institutions | 5,701,966 | 3,163,001 | 80.3% | 6,366,603 | -10.4% | ||||
| Borrowings from DFIs | 1,899,130 | 2,084,165 | -8.9% | 2,053,214 | -7.5% | ||||
| Short-term loans from the National Bank of Georgia | 1,166,526 | 180,099 | NMF | 1,443,950 | -19.2% | ||||
| Short-term loans from the Central Bank of Armenia | 164,993 | - | NMF | 175,993 | -6.3% | ||||
| Loans and deposits from commercial banks | 2,471,317 | 898,737 | 175.0% | 2,693,446 | -8.2% | ||||
| Debt securities issued | 2,220,896 | 425,560 | NMF | 2,128,224 | 4.4% | ||||
| All remaining liabilities | 1,038,608 | 782,531 | 32.7% | 1,164,031 | -10.8% | ||||
| Total liabilities | 40,833,886 | 26,114,635 | 56.4% | 40,365,130 | 1.2% | ||||
| Total equity | 6,531,542 | 4,735,178 | 37.9% | 6,163,291 | 6.0% | ||||
| Book value per share | 150.46 | 107.64 | 39.8% | 141.14 | 6.6% | ||||
| KEY RATIOS | 3Q24 | 3Q23 | 2Q24 | 9M24 | 9M23 | ||||
| ROAA (adjusted for one-off items)[4] | 4.4% | 4.8% | 3.9% | 4.3% | 4.9% | ||||
| ROAE (adjusted for one-off items) | 32.1% | 30.7% | 28.0% | 30.1% | 31.1% | ||||
| Net interest margin4 | 6.2% | 6.6% | 6.3% | 6.4% | 6.5% | ||||
| Loan yield4 | 12.2% | 12.6% | 12.4% | 12.5% | 12.6% | ||||
| Liquid assets yield4 | 5.1% | 4.7% | 5.0% | 5.2% | 4.6% | ||||
| Cost of funds4 | 4.8% | 4.7% | 4.8% | 4.9% | 4.7% | ||||
| Cost of client deposits and notes4 | 4.0% | 4.2% | 4.0% | 4.1% | 4.0% | ||||
| Cost of amounts owed to credit institutions4 | 7.7% | 8.0% | 7.7% | 8.1% | 8.3% | ||||
| Cost of debt securities issued4 | 7.4% | 8.6% | 8.2% | 8.2% | 8.0% | ||||
| Cost:income ratio | 34.8% | 28.8% | 35.6% | 33.7% | 28.2% | ||||
| NPLs to gross loans | 1.8% | 2.4% | 2.0% | 1.8% | 2.4% | ||||
| NPL coverage ratio | 71.4% | 69.1% | 63.7% | 71.4% | 69.1% | ||||
| NPL coverage ratio adjusted for the discounted value of collateral | 124.2% | 122.1% | 119.4% | 124.2% | 122.1% | ||||
| Cost of credit risk ratio4 | 0.2% | 0.6% | 1.1% | 0.6% | 0.8% |
Performance highlights
· The Group generated operating income of GEL 937.7m in 3Q24 (up 45.9% y-o-y and down 1.2% q-o-q). In 9M24, operating income amounted to GEL 2,530.6m (up 35.1% y-o-y). The y-o-y increases in 3Q24 and 9M24 were largely driven by the consolidation of Ameriabank, together with 11.0% and 9.9% y-o-y increases respectively in GFS. In GFS, strong y-o-y growth in 3Q24 was recorded in net interest income and net foreign currency gain, partly offset by lower net fee and commission income resulting from a positive net GEL 25.0m booked in 3Q23 due to amendments in the accounting model for payment systems charges. Excluding this effect, the y-o-y growth in GFS net fee and commission income in 3Q24 would have been 21.0%. Compared with the prior quarter, operating income was broadly flat, with growth in GFS offset by lower operating income in AFS and Other Businesses.
· The Group's operating expenses amounted to GEL 326.4m in 3Q24 (up 76.2% y-o-y and down 3.4% q-o-q). The y-o-y growth on the Group level was mainly driven by the consolidation of Ameriabank, although increases have also been experienced at GFS. In 9M24, operating expenses amounted to GEL 852.3m (up 61.2% y-o-y), mainly due to the same reasons mentioned above. The Group's cost to income ratio was 34.8% in 3Q24 (28.8% in 3Q23 and 35.6% in 2Q24). In 9M24, cost to income ratio was 33.7% (28.2% in 9M23). The Group's cost to income ratio was negatively impacted by the higher cost to income ratio of AFS.
· The Group's profit was GEL 509.3m in 3Q24 (up 42.5% y-o-y and up 18.4% q-o-q). The Group's profit (adjusted for one-off items) was GEL 1,308.3m in 9M24 (up 25.1% y-o-y). Return on average equity was 32.1% in 3Q24 (30.7% in 3Q23 and 28.0% in 2Q24). In 9M24, return on average equity (adjusted for one-off items) was 30.1% (31.1% in 9M23).
Asset quality
· Loan portfolio quality has remained healthy. Cost of credit risk ratio was 0.2% in 3Q24 (0.6% in 3Q23 and 1.1% in 2Q24 or 0.4% if adjusted for Ameriabank initial ECL), driven by robust performances in both the Georgian and Armenian operations. In 9M24, cost of credit risk ratio was 0.6% (0.3% if adjusted for Ameriabank initial ECL charge) vs 0.8% in 9M23.
· The NPLs to gross loans ratio improved to 1.8% as at 30 September 2024 (down 60 bps y-o-y and down 20 bps q-o-q). The y-o-y decrease was mainly driven by a decrease in GFS NPL ratio (down 50 bps y-o-y to 1.9%). AFS NPL ratio was also down q-o-q.
| GEL thousands, unless otherwise noted | Sep-24 | Sep-23 | Change y-o-y |
Jun-24 | Change q-o-q |
|
| NON-PERFORMING LOANS | ||||||
| Group (consolidated) | ||||||
| NPLs (in GEL thousands) | 564,429 | 470,808 | 19.9% | 613,405 | -8.0% | |
| NPLs to gross loans | 1.8% | 2.4% | 2.0% | |||
| NPL coverage ratio | 71.4% | 69.1% | 63.7% | |||
| NPL coverage ratio adjusted for the discounted value of collateral | 124.2% | 122.1% | 119.4% | |||
| Georgian Financial Services (GFS) | ||||||
| NPLs to gross loans | 1.9% | 2.4% | 2.1% | |||
| NPL coverage ratio | 70.6% | 66.0% | 66.0% | |||
| NPL coverage ratio adjusted for the discounted value of collateral | 119.4% | 119.6% | 116.4% | |||
| Ameriabank (standalone figures) | ||||||
| NPLs to gross loans | 1.6% | - | 2.1% | |||
| NPL coverage ratio | 78.4% | - | 66.3% | |||
| NPL coverage ratio adjusted for the discounted value of collateral | 136.9% | - | 122.3% |
Portfolio highlights
· Loans to customers, factoring and finance lease receivables amounted to GEL 31,059.0m as at 30 September 2024, up 63.4% y-o-y and up 3.2% q-o-q in nominal terms. The significant y-o-y increase is attributable to the Ameriabank acquisition, as well as a 23.6% loan growth in GFS.
· Client deposits and notes amounted to GEL 31,872.4m as at 30 September 2024 (up 46.6% y-o-y and up 3.8% q-o-q). The y-o-y growth was driven by the Ameriabank acquisition as well as a 16.8% deposit growth in GFS.
Capital return
· In August 2024, the Board of Directors declared an interim dividend of GEL 3.38 per ordinary share in respect of the period ended 30 June 2024 to ordinary shareholders of Bank of Georgia Group PLC. The interim dividend was paid on 11 October 2024.
· In addition, in August 2024, the Board announced a further share buyback and cancellation programme totalling GEL 73.4 million. The Company commenced the share buyback and cancellation programme in August 2024, and as at 31 October 2024 the Company had bought back 265,229 ordinary shares at a total cost of GEL 37.9 million, of which 247,729 shares were cancelled.
Business Division results
Following the acquisition of Ameriabank in March 2024, the Group results are presented by the following Business Divisions: 1) Georgian Financial Services (GFS), 2) Armenian Financial Services (AFS), and 3) Other Businesses.
Georgian Financial Services (GFS)
Georgian Financial Services ( GFS ) mainly comprises JSC Bank of Georgia and investment bank JSC Galt and Taggart.
| GEL thousands | 3Q24 | 3Q23 | Change y-o-y |
2Q24 | Change q-o-q |
9M24 | 9M23 | Change y-o-y |
|
| INCOME STATEMENT HIGHLIGHTS | |||||||||
| Interest income | 837,908 | 687,296 | 21.9% | 797,984 | 5.0% | 2,381,834 | 1,951,381 | 22.1% | |
| Interest expense | (371,324) | (281,962) | 31.7% | (359,907) | 3.2% | (1,054,744) | (803,528) | 31.3% | |
| Net interest income | 466,584 | 405,334 | 15.1% | 438,077 | 6.5% | 1,327,090 | 1,147,853 | 15.6% | |
| Net fee and commission income | 110,887 | 116,661 | -4.9% | 120,453 | -7.9% | 338,691 | 314,890 | 7.6% | |
| Net foreign currency gain | 98,214 | 88,396 | 11.1% | 99,177 | -1.0% | 279,021 | 236,189 | 18.1% | |
| Net other income | 7,919 | 5,371 | 47.4% | 12,101 | -34.6% | 27,398 | 94,939 | -71.1% | |
| Operating income | 683,604 | 615,762 | 11.0% | 669,808 | 2.1% | 1,972,200 | 1,793,871 | 9.9% | |
| Salaries and other employee benefits | (111,225) | (95,523) | 16.4% | (112,521) | -1.2% | (318,240) | (272,730) | 16.7% | |
| Administrative expenses | (52,013) | (40,303) | 29.1% | (49,674) | 4.7% | (143,365) | (112,308) | 27.7% | |
| Depreciation, amortisation and impairment | (31,446) | (27,776) | 13.2% | (29,904) | 5.2% | (90,184) | (81,443) | 10.7% | |
| Other operating expenses | (1,245) | (692) | 79.9% | (1,369) | -9.1% | (4,108) | (1,948) | 110.9% | |
| Operating expenses | (195,929) | (164,294) | 19.3% | (193,468) | 1.3% | (555,897) | (468,429) | 18.7% | |
| Profit from associates | 389 | 333 | 16.8% | 378 | 2.9% | 978 | 730 | 34.0% | |
| Operating income before cost of risk | 488,064 | 451,801 | 8.0% | 476,718 | 2.4% | 1,417,281 | 1,326,172 | 6.9% | |
| Cost of risk | (2,391) | (38,548) | -93.8% | (27,623) | -91.3% | (50,484) | (122,077) | -58.6% | |
| Profit before income tax expense | 485,673 | 413,253 | 17.5% | 449,095 | 8.1% | 1,366,797 | 1,204,095 | 13.5% | |
| Income tax expense | (74,259) | (62,448) | 18.9% | (68,226) | 8.8% | (204,142) | (176,595) | 15.6% | |
| Profit adjusted for one-off items | 411,414 | 350,805 | 17.3% | 380,869 | 8.0% | 1,162,655 | 1,027,500 | 13.2% | |
| One-off items | - | - | - | - | - | - | 21,061 | NMF | |
| Profit | 411,414 | 350,805 | 17.3% | 380,869 | 8.0% | 1,162,655 | 1,048,561 | 10.9% | |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Sep-23 | Change y-o-y |
Jun-24 | Change q-o-q |
||||
| Cash and cash equivalents | 2,059,303 | 2,497,977 | -17.6% | 1,899,605 | 8.4% | ||||
| Amounts due from credit institutions | 1,797,054 | 1,856,104 | -3.2% | 1,866,561 | -3.7% | ||||
| Investment securities | 7,048,177 | 5,309,190 | 32.8% | 6,942,219 | 1.5% | ||||
| Loans to customers, factoring and finance lease receivables | 22,444,065 | 18,161,733 | 23.6% | 21,659,438 | 3.6% | ||||
| Loans to customers, factoring and finance lease receivables , LC | 12,819,317 | 10,225,451 | 25.4% | 12,043,169 | 6.4% | ||||
| Loans to customers, factoring and finance lease receivables , FC | 9,624,748 | 7,936,282 | 21.3% | 9,616,269 | 0.1% | ||||
| Property and equipment | 443,849 | 414,500 | 7.1% | 433,585 | 2.4% | ||||
| All remaining assets | 1,111,214 | 1,068,108 | 4.0% | 1,047,065 | 6.1% | ||||
| Total assets | 34,903,662 | 29,307,612 | 19.1% | 33,848,473 | 3.1% | ||||
| Client deposits and notes | 24,079,718 | 20,618,922 | 16.8% | 22,659,682 | 6.3% | ||||
| Client deposits and notes, LC | 11,999,849 | 10,121,026 | 18.6% | 10,881,951 | 10.3% | ||||
| Client deposits and notes, FC | 12,079,869 | 10,497,896 | 15.1% | 11,777,731 | 2.6% | ||||
| Amounts owed to credit institutions | 4,743,875 | 3,067,766 | 54.6% | 5,065,866 | -6.4% | ||||
| Debt securities issued | 1,067,012 | 414,289 | 157.6% | 1,040,106 | 2.6% | ||||
| All remaining liabilities | 423,262 | 743,801 | -43.1% | 735,130 | -42.4% | ||||
| Total liabilities | 30,313,867 | 24,844,778 | 22.0% | 29,500,784 | 2.8% | ||||
| Total equity | 4,589,795 | 4,462,834 | 2.8% | 4,347,689 | 5.6% | ||||
| Risk-weighted assets (JSC Bank of Georgia standalone) | 26,635,323 | 20,881,399 | 27.6% | 25,800,413 | 3.2% | ||||
| KEY RATIOS | 3Q24 | 3Q23 | 2Q24 | 9M24 | 9M23 | ||||
| ROAA (adjusted for one-off items) | 4.8% | 5.0% | 4.7% | 4.8% | 5.1% | ||||
| ROAA (unadjusted) | 4.8% | 5.0% | 4.7% | 4.8% | 5.2% | ||||
| ROAE (adjusted for one-off items) | 36.7% | 31.7% | 34.6% | 33.9% | 32.2% | ||||
| ROAE (unadjusted) | 36.7% | 31.7% | 34.6% | 33.9% | 32.8% | ||||
| Net interest margin | 6.1% | 6.6% | 6.0% | 6.1% | 6.5% | ||||
| Loan yield | 12.4% | 12.7% | 12.5% | 12.5% | 12.7% | ||||
| Loan yield, LC | 14.9% | 15.6% | 14.9% | 14.9% | 15.8% | ||||
| Loan yield, FC | 9.2% | 9.1% | 9.5% | 9.3% | 8.8% | ||||
| Cost of funds | 5.1% | 4.9% | 5.2% | 5.2% | 4.8% | ||||
| Cost of client deposits and notes | 4.3% | 4.3% | 4.4% | 4.4% | 4.1% | ||||
| Cost of client deposits and notes, LC | 7.6% | 8.4% | 7.9% | 7.9% | 8.4% | ||||
| Cost of client deposits and notes, FC | 1.2% | 0.6% | 1.1% | 1.1% | 0.5% | ||||
| Cost of time deposits | 6.7% | 6.6% | 6.9% | 6.8% | 6.4% | ||||
| Cost of time deposits, LC | 10.2% | 10.6% | 10.6% | 10.6% | 10.8% | ||||
| Cost of time deposits, FC | 1.9% | 1.7% | 2.5% | 2.2% | 1.5% | ||||
| Cost of current accounts and demand deposits | 2.3% | 2.7% | 2.2% | 2.4% | 2.4% | ||||
| Cost of current accounts and demand deposits, LC | 4.9% | 6.1% | 4.8% | 5.0% | 6.0% | ||||
| Cost of current accounts and demand deposits, FC | 0.4% | 0.1% | 0.4% | 0.0% | 0.1% | ||||
| Cost:income ratio (adjusted for one-off items) | 28.7% | 26.7% | 28.9% | 28.2% | 26.1% | ||||
| Cost:income ratio (unadjusted) | 28.7% | 26.7% | 28.9% | 28.2% | 25.8% | ||||
| Cost of credit risk ratio | 0.1% | 0.7% | 0.4% | 0.3% | 0.8% |
Performance highlights
· GFS generated operating income of GEL 683.6m in 3Q24 (up 11.0% y-o-y and up 2.1% q-o-q). The y-o-y growth was mainly driven by net interest income, marginally offset by lower net fee and commission income (see below). In 9M24, operating income amounted to GEL 1,972.2m (up 9.9% y-o-y).
o The y-o-y decline in net fee and commission income in 3Q24 was mainly attributable to a high base in 3Q23 as c. GEL25m net positive effect was recorded last year due to amendments in the accounting model for payment systems charges. Excluding this effect, net fee and commission income would have been up 21.0% y-o-y. The q-o-q decline was mainly driven by seasonally higher loyalty programme costs. In 9M24, net fee and commission income was GEL 338.7m (up 7.6% y-o-y); excluding c. GEL27m (significant advisory fee) and c. GEL25m (amendment effect) significant items recorded in 1Q23 and 3Q23 respectively, the underlying y-o-y growth in net fee and commission income in 9M24 would have been c. 29%.
o The significant decline in net other income in 9M24 (down 71.1% y-o-y) was driven by a high base in 2Q23 reflecting a significant GEL 68.7m gain on the sale of repossessed assets.
· The net interest margin increased slightly during the quarter and stood at 6.1% in 3Q24 (down 50 bps y-o-y and up 10 bps q-o-q). The redemption of the $100m AT1 perpetual bond at the end of June 2024 had a small positive impact on the margin. In 9M24, NIM was 6.1% (down 40 bps y-o-y), driven by a combination of higher cost of funds (up 40 bps y-o-y to 5.2%) and lower loan yield (down 20 bps y-o-y to 12.5%).
· Operating expenses amounted to GEL 195.9m in 3Q24 (up 19.3% y-o-y and up 1.3% q-o-q). In 9M24, operating expenses increased by 18.7% y-o-y to GEL 555.9m . The y-o-y growth in operating expenses in the periods presented was mainly driven by increased salaries and other employee benefits, together with higher administrative expenses related to business growth and continuing investments in key strategic areas.
o The y-o-y growth in salary costs reflected a combination of two factors: an increase in staff numbers to support business growth (up 8.5% y-o-y at Bank of Georgia as of September 2024) and higher wages driven by double-digit nominal wage growth in Georgia during 2022-2023. As 2024 has progressed, market nominal wage growth has been stabilising.
· Cost of credit risk ratio was 0.1% in 3Q24 (0.7% in 3Q23 and 0.4% in 2Q24). The decrease was attributable to improvements in credit quality across all segments, reflecting the continued strength of the Georgian economy. In 9M24, cost of credit risk ratio stood at 0.3% vs 0.8% in 9M23.
· Overall, GFS posted a profit of GEL 411.4m in 3Q24 (up 17.3% y-o-y and up 8.0% q-o-q). In 9M24, profit amounted to GEL 1,162.7m (up 13.2% y-o-y compared with adjusted profit in 9M23).
Portfolio highlights
From 1Q24 the Corporate Center was separated as a new segment of GFS. The Corporate Center mainly includes treasury and custody operations. Previously, the Corporate Center's income and expenses were allocated to the Retail, SME, and CIB segments. The previous figures for the Retail, SME, and CIB segments have been restated.
| Portfolio highlights: Loans to customers, factoring and finance lease receivables | |||||||
| Sep-24 | Sep-23 | Change y-o-y |
Change y-o-y (constant currency) | Jun-24 | Change q-o-q |
Change q-o-q (constant currency) | |
| Total GFS | 22,444,065 | 18,161,733 | 23.6% | 21.7% | 21,659,438 | 3.6% | 4.3% |
| Retail | 9,725,127 | 8,059,208 | 20.7% | 19.8% | 9,290,776 | 4.7% | 4.9% |
| SME | 4,900,686 | 4,422,394 | 10.8% | 9.0% | 4,898,358 | 0.0% | 0.5% |
| CIB | 7,818,252 | 5,680,131 | 37.6% | 34.5% | 7,470,304 | 4.7% | 5.9% |
| Corporate Center | - | - | - | - | - | - | - |
| Portfolio highlights: client deposits and notes | |||||||
| Sep-24 | Sep-23 | Change y-o-y |
Change y-o-y (constant currency) | Jun-24 | Change q-o-q |
Change q-o-q (constant currency) | |
| Total GFS | 24,079,718 | 20,618,922 | 16.8% | 14.9% | 22,659,682 | 6.3% | 7.3% |
| Retail | 13,816,179 | 11,728,532 | 17.8% | 15.4% | 13,783,042 | 0.2% | 1.6% |
| SME | 2,083,761 | 1,744,883 | 19.4% | 17.8% | 1,973,477 | 5.6% | 6.3% |
| CIB | 6,324,426 | 5,915,032 | 6.9% | 6.3% | 5,533,539 | 14.3% | 15.0% |
| Corporate Center | 1,920,096 | 1,536,053 | 25.0% | 1,422,598 | 35.0% | ||
| Eliminations | (64,744) | (305,578) | -78.8% | (52,974) | 22.2% | ||
| Loan portfolio quality: cost of credit risk ratio | |||||||
| 3Q24 | 3Q23 | 2Q24 | |||||
| Total GFS | 0.1% | 0.7% | 0.4% | ||||
| Retail | 0.1% | 0.8% | 0.4% | ||||
| SME | 0.3% | 1.1% | 0.8% | ||||
| CIB | 0.0% | 0.2% | 0.2% | ||||
| Loan portfolio quality: NPL ratio | |||||||
| Sep-24 | Sep-23 | Jun-24 | |||||
| Total GFS | 1.9% | 2.4% | 2.1% | ||||
| Retail | 1.7% | 2.0% | 1.8% | ||||
| SME | 3.6% | 3.6% | 3.5% | ||||
| CIB | 1.1% | 2.2% | 1.5% |
· GFS's loans to customers, factoring and finance lease receivables stood at GEL 22,444.1m (up 23.6% y-o-y and up 3.6% q-o-q) as at 30 September 2024. The y-o-y growth was mainly driven by CIB, followed by RB and SME respectively. The q-o-q growth was driven by RB, followed by CIB. On a constant currency basis, the loan book increased by 21.7% y-o-y and by 4.3% q-o-q.
· 57.1% of the loan book was denominated in GEL as at 30 September 2024 (56.3% at 30 September 2023 and 55.6% at 30 June 2024).
· Client deposits and notes stood at GEL 24,079.7m as at 30 September 2024 (up 16.8% y-o-y and up 6.3% q-o-q). Strong y-o-y growth was recorded in RB and SME segments. The q-o-q growth was mainly driven by CIB, followed by Corporate Center (mainly due to higher Ministry of Finance deposits), and SME respectively. On a constant currency basis, deposits increased by 14.9% y-o-y and by 7.3% q-o-q. Product-wise, strong y-o-y and q-o-q growth in deposits was primarily driven by time deposits, followed by current accounts and demand deposits.
· The share of GEL-denominated client deposits increased to 49.8% as at 30 September 2024 (49.1% at 30 September 2023 and 48.0% at 30 June 2024).
Liquidity
| Sep-24 | Sep-23 | Jun-24 | |||||
| IFRS-based NBG Liquidity Coverage Ratio (Bank of Georgia) | 126.3% | 135.7% | 128.3% | ||||
| IFRS-based NBG Net Stable Funding Ratio (Bank of Georgia) | 124.9% | 134.5% | 126.9% | ||||
· Bank of Georgia has maintained a strong liquidity position, with IFRS-based NBG liquidity coverage ratio at 126.3% as at 30 September 2024 (135.7% as at 30 September 2023 and 128.3% as at 30 June 2024), and IFRS-based NBG net stable funding ratio at 124.9% as at 30 September 2024 (134.5% as at 30 September 2023 and 126.9% as at 30 June 2024).
Capital position
· Bank of Georgia continues to operate with robust capital adequacy levels. At 30 September 2024, the Bank's Basel III CET1, Tier1, and Total capital ratios stood at 17.2%, 20.8%, and 23.3%, respectively, all comfortably above the minimum requirements of 15.0%, 17.2%, 20.1%, respectively. The movement in capital adequacy ratios in 3Q24 and the potential impact of a 10% devaluation of GEL is as follows:
| 30 June 2024 | 3Q24 profit |
Business growth | Currency impact | Capital distribution | Tier 1 - Tier 2 | 30 Sep 2024 |
Buffer above min requirement | Potential impact of a 10% GEL devaluation |
|||||
| CET 1 capital adequacy | 17.0% | 1.5% | -0.5% | 0.1% | -0.9% | 0.0% | 17.2% | 2.2% | -0.8% | ||||
| Tier 1 capital adequacy | 20.8% | 1.5% | -0.7% | 0.0% | -0.9% | 0.0% | 20.8% | 3.6% | -0.7% | ||||
| Total capital adequacy | 23.4% | 1.5% | -0.8% | 0.0% | -0.9% | 0.1% | 23.3% | 3.2% | -0.6% | ||||
· Bank of Georgia's minimum capital requirements for December 2024 are expected to be 14.9%, 17.1% and 20.0% for CET1 ratio, Tier1 ratio, and Total capital ratio respectively.
Armenian Financial Services (AFS)
Armenian Financial Services ( AFS ) includes CJSC Ameriabank
| GEL thousands | 3Q24 | 2Q24 | Change q-o-q |
| INCOME STATEMENT HIGHLIGHTS | |||
| Interest income | 256,769 | 253,162 | 1.4% |
| Interest expense | (95,163) | (87,779) | 8.4% |
| Net interest income | 161,606 | 165,383 | -2.3% |
| Net fee and commission income | 21,104 | 29,037 | -27.3% |
| Net foreign currency gain | 38,744 | 38,576 | 0.4% |
| Net other income | 1,804 | 1,063 | 69.7% |
| Operating income | 223,258 | 234,059 | -4.6% |
| Salaries and other employee benefits | (80,604) | (93,592) | -13.9% |
| Administrative expenses | (13,829) | (13,450) | 2.8% |
| Depreciation, amortisation and impairment | (13,212) | (14,618) | -9.6% |
| Other operating expenses | (1,574) | (1,676) | -6.1% |
| Operating expenses | (109,219) | (123,336) | -11.4% |
| Profit from associates | - | - | - |
| Operating income before cost of risk | 114,039 | 110,723 | 3.0% |
| Cost of risk | (3,558) | (56,091) | -93.7% |
| Out of which initial ECL related to assets acquired in business combination | - | (49,157) | -100.0% |
| Net operating income before non-recurring items | 110,481 | 54,632 | 102.2% |
| Net non-recurring items | - | - | - |
| Profit before income tax expense | 110,481 | 54,632 | 102.2% |
| Income tax expense | (19,078) | (22,409) | -14.9% |
| Profit adjusted for one-off items | 91,403 | 32,223 | 183.7% |
| One-off items | - | 679 | NMF |
| Profit | 91,403 | 32,902 | 177.8% |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Jun-24 | Change q-o-q |
| Cash and cash equivalents | 916,969 | 963,562 | -4.8% |
| Amounts due from credit institutions | 732,424 | 820,104 | -10.7% |
| Investment securities | 1,041,356 | 1,266,048 | -17.7% |
| Loans to customers, factoring and finance lease receivables | 7,955,714 | 7,713,878 | 3.1% |
| Loans to customers, factoring and finance lease receivables, LC | 4,702,686 | 4,590,828 | 2.4% |
| Loans to customers, factoring and finance lease receivables, FC | 3,253,028 | 3,123,050 | 4.2% |
| Property and equipment | 78,116 | 83,638 | -6.6% |
| All remaining assets | 317,741 | 298,564 | 6.4% |
| Total assets | 11,042,320 | 11,145,794 | -0.9% |
| Client deposits and notes | 6,854,363 | 6,851,090 | 0.0% |
| Client deposits and notes, LC | 3,672,842 | 3,517,958 | 4.4% |
| Client deposits and notes, FC | 3,181,521 | 3,333,132 | -4.5% |
| Amounts owed to credit institutions | 962,149 | 1,259,350 | -23.6% |
| Debt securities issued | 1,150,771 | 1,083,559 | 6.2% |
| All remaining liabilities | 424,619 | 390,431 | 8.8% |
| Total liabilities | 9,391,902 | 9,584,430 | -2.0% |
| Total equity | 1,650,418 | 1,561,364 | 5.7% |
| KEY RATIOS | 3Q24 | 2Q24 | |
| ROAA (adjusted for one-off items and Ameriabank initial ECL) | 3.3% | 3.1% | |
| ROAA (unadjusted) | 3.3% | 1.3% | |
| ROAE (adjusted for one-off items and Ameriabank initial ECL) | 23.1% | 22.1% | |
| ROAE (unadjusted) | 23.1% | 8.9% | |
| Net interest margin | 6.7% | 7.2% | |
| Loan yield | 11.5% | 12.2% | |
| Loan yield, LC | 13.9% | 14.7% | |
| Loan yield, FC | 8.1% | 8.5% | |
| Cost of funds | 4.2% | 4.0% | |
| Cost of client deposits and notes | 3.2% | 3.0% | |
| Cost of client deposits and notes, LC | 4.8% | 4.7% | |
| Cost of client deposits and notes, FC | 1.4% | 1.4% | |
| Cost of time deposits | 5.8% | 5.3% | |
| Cost of time deposits, LC | 9.6% | 9.2% | |
| Cost of time deposits, FC | 2.4% | 2.1% | |
| Cost of current accounts and demand deposits | 1.5% | 1.5% | |
| Cost of current accounts and demand deposits, LC | 2.2% | 2.1% | |
| Cost of current accounts and demand deposits, FC | 0.7% | 0.7% | |
| Cost:income ratio | 48.9% | 52.7% | |
| Cost of credit risk ratio | 0.3% | 3.1% |
Ameriabank was consolidated for the first time at the end of March 2024. In 2Q24 AFS Income Statement results were consolidated on the Group level for the first time. In addition, to provide more comparable growth trends with previous periods, the performance of standalone Ameriabank during the last seven quarters has been disclosed on page 15: Ameriabank: standalone financial information. Ameriabank's standalone financial information is presented for informational purposes only, is different from AFS results due to fair value adjustments and allocation of certain Group expenses to Business Divisions, and is not included in consolidated results.
Performance highlights
· In 3Q24 operating income amounted to GEL 223.3m (down 4.6% q-o-q), mainly driven by decreased net fee and commission income due to a high base of a significant advisory fee (GEL c.10m) booked in 2Q24. Although AFS net interest income was down 2.3% q-o-q, the actual standalone net interest income was up 3.2% q-o-q. The difference in AFS is due to amortisation of fair value adjustments on loans posted as part of business combination, which had a larger positive effect on interest income in the prior quarter.
· Operating expenses decreased by 11.4% q-o-q to GEL 109.2m , mainly driven by decreased salaries and other employee benefits.
· Loan portfolio quality remained healthy, with cost of credit risk ratio at 0.3% in 3Q24.
· Overall, AFS generated GEL 91.4m in profit in 3Q24, with ROAE standing at 23.1%.
Portfolio highlights
· Loans to customers, factoring and finance lease receivables stood at GEL 7,955.7m as at 30 September 2024 (up 3.1% q-o-q). Growth on a constant currency basis was 6.1% q-o-q . 59.1% of the loan book was denominated in Armenian Drams as at 30 September 2024 (59.5% as at 30 June 2024).
· Ameriabank had the highest market share in Armenia by total loans - 19.6% as of 30 September 2024 (down 30 bps q-o-q).
· Client deposits and notes stood at GEL 6,854.4m as at 30 September 2024 (flat q-o-q). On a constant currency basis, deposits were up 2.9% q-o-q . 53.6% of client deposits and notes were denominated in Armenian Drams as at 30 September 2024 (51.3% as at 30 June 2024). Debt securities issued was up 6.2% q-o-q and amounted to GEL 1,150.8m, of which 88.7% were local debt securities. Local debt securities issues are treated similarly to deposits in Armenia and are sold to Ameriabank clients.
· Ameriabank had the second highest market share by total deposits in Armenia - 17.8% as of 30 September 2024 (flat q-o-q) [5] .
Liquidity
· Ameriabank has maintained a strong liquidity position, having CBA LCR of 210.3% and CBA NSFR of 122.6% as at 30 September 2024, well above the minimum regulatory requirements of 100%.
Capital position
· At 30 September 2024, Ameriabank's CET1, Tier1, and Total capital ratios stood at 15.0%, 15.0%, and 17.4%, respectively, all above the minimum requirements of 11.7%, 13.8%, 16.5%, respectively.
| 30 Jun 2024 | 3Q24 profit |
Business growth | Currency impact | Regulatory deductions | Other | 30 Sep 2024 |
Buffer above min requirement | Potential impact of a 10% AMD devaluation |
|||||
| CET 1 capital adequacy | 15.3% | 1.2% | -1.3% | 0.0% | -0.2% | 0.0% | 15.0% | 3.3% | -0.7% | ||||
| Tier 1 capital adequacy | 15.3% | 1.2% | -1.3% | 0.0% | -0.2% | 0.0% | 15.0% | 1.2% | -0.7% | ||||
| Total capital adequacy | 17.8% | 1.2% | -1.4% | 0.0% | -0.2% | 0.0% | 17.4% | 0.9% | -0.7% |
Ameriabank: standalone financial information (not included in consolidated results)
The following table is presented for information purposes only to show the performance of Ameriabank in the last six quarters. It has been prepared consistently with the accounting policies adopted by the Group in preparing its consolidated financial statements.
| GEL thousands | 3Q24 | 2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | Change y-o-y in 3Q24 |
Change q-o-q in 3Q24 |
|
| INCOME STATEMENT HIGHLIGHTS | ||||||||||
| Interest income | 252,723 | 240,395 | 217,180 | 214,716 | 196,300 | 183,395 | 173,017 | 28.7% | 5.1% | |
| Interest expense | (91,178) | (83,835) | (78,188) | (74,101) | (68,743) | (69,352) | (62,410) | 32.6% | 8.8% | |
| Net interest income | 161,545 | 156,560 | 138,992 | 140,615 | 127,557 | 114,043 | 110,607 | 26.6% | 3.2% | |
| Net fee and commission income | 21,342 | 28,772 | 18,620 | 16,872 | 16,925 | 15,493 | 16,149 | 26.1% | -25.8% | |
| Net foreign currency gain | 36,247 | 41,853 | 31,125 | 46,512 | 37,832 | 37,383 | 36,683 | -4.2% | -13.4% | |
| Net other income | 1,795 | 1,083 | 1,648 | 2,428 | 2,020 | 2,937 | 93 | -11.1% | 65.7% | |
| Operating income | 220,929 | 228,268 | 190,385 | 206,427 | 184,334 | 169,856 | 163,532 | 19.9% | -3.2% | |
| Salaries and other employee benefits | (67,366) | (78,897) | (65,158) | (62,352) | (56,828) | (47,978) | (50,434) | 18.5% | -14.6% | |
| Administrative expenses | (13,509) | (13,078) | (12,761) | (17,789) | (12,757) | (11,272) | (10,351) | 5.9% | 3.3% | |
| Depreciation, amortisation and impairment | (9,211) | (8,847) | (7,948) | (7,436) | (7,214) | (7,022) | (6,985) | 27.7% | 4.1% | |
| Other operating expenses | (1,572) | (1,663) | (1,121) | (715) | (1,079) | (1,242) | (1,543) | 45.7% | -5.5% | |
| Operating expenses | (91,658) | (102,485) | (86,988) | (88,292) | (77,878) | (67,514) | (69,313) | 17.7% | -10.6% | |
| Profit from associates | - | - | - | - | - | - | - | - | - | |
| Operating income before cost of risk | 129,271 | 125,783 | 103,397 | 118,135 | 106,456 | 102,342 | 94,219 | 21.4% | 2.8% | |
| Cost of risk | (6,716) | (470) | (310) | (16,811) | (2,158) | (16,939) | (1,305) | NMF | NMF | |
| Net operating income before non-recurring items | 122,555 | 125,313 | 103,087 | 101,324 | 104,298 | 85,403 | 92,914 | 17.5% | -2.2% | |
| Net non-recurring items | - | - | - | - | - | - | - | - | - | |
| Profit before income tax expense | 122,555 | 125,313 | 103,087 | 101,324 | 104,298 | 85,403 | 92,914 | 17.5% | -2.2% | |
| Income tax expense | (22,292) | (22,938) | (18,826) | (22,918) | (19,383) | (16,228) | (16,896) | 15.0% | -2.8% | |
| Profit | 100,263 | 102,375 | 84,261 | 78,406 | 84,915 | 69,175 | 76,018 | 18.1% | -2.1% | |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Jun-24 | Mar-24 | Dec-23 | Sep-23 | Jun-23 | Mar-23 | |||
| Liquid assets | 2,690,749 | 3,049,714 | 2,869,140 | 2,517,735 | 2,610,555 | 2,508,511 | 3,153,599 | 3.1% | -11.8% | |
| Cash and cash equivalents | 916,969 | 963,562 | 989,930 | 886,111 | 891,145 | 831,739 | 832,367 | 2.9% | -4.8% | |
| Amounts due from credit institutions | 732,424 | 820,104 | 707,851 | 714,963 | 764,184 | 613,005 | 574,367 | -4.2% | -10.7% | |
| Investment securities | 1,041,356 | 1,266,048 | 1,171,359 | 916,661 | 955,226 | 1,063,767 | 1,746,865 | 9.0% | -17.7% | |
| Loans to customers, factoring and finance lease receivables | 7,970,091 | 7,735,526 | 6,811,477 | 6,551,322 | 6,085,278 | 5,682,028 | 5,169,912 | 31.0% | 3.0% | |
| Property and equipment | 68,345 | 71,591 | 63,357 | 60,247 | 59,358 | 58,366 | 50,588 | 15.1% | -4.5% | |
| All remaining assets | 256,631 | 238,307 | 213,670 | 248,358 | 217,875 | 220,986 | 225,298 | 17.8% | 7.7% | |
| Total assets | 10,985,816 | 11,095,138 | 9,957,644 | 9,377,662 | 8,973,066 | 8,469,891 | 8,599,397 | 22.4% | -1.0% | |
| Client deposits and notes | 6,854,363 | 6,851,090 | 6,522,822 | 6,039,076 | 6,012,377 | 5,664,040 | 5,614,381 | 14.0% | 0.0% | |
| Amounts owed to credit institutions | 972,890 | 1,271,190 | 851,401 | 904,645 | 702,152 | 733,044 | 948,095 | 38.6% | -23.5% | |
| Debt securities issued | 1,150,771 | 1,083,559 | 886,862 | 785,491 | 709,314 | 653,042 | 622,114 | 62.2% | 6.2% | |
| All remaining liabilities | 328,840 | 269,187 | 269,511 | 345,916 | 271,938 | 225,130 | 325,169 | 20.9% | 22.2% | |
| Total liabilities | 9,306,864 | 9,475,026 | 8,530,596 | 8,075,128 | 7,695,781 | 7,275,256 | 7,509,759 | 20.9% | -1.8% | |
| Total equity | 1,678,952 | 1,620,112 | 1,427,048 | 1,302,534 | 1,277,285 | 1,194,635 | 1,089,638 | 31.4% | 3.6% | |
| KEY RATIOS [6] | 3Q24 | 2Q24 | 1Q24 | 4Q23 | 3Q23 | 2Q23 | 1Q23 | |||
| ROAA | 3.6% | 3.9% | 3.5% | 3.4% | 3.9% | 3.3% | 3.6% | |||
| ROAE | 24.2% | 27.0% | 24.8% | 24.1% | 27.3% | 24.3% | 27.2% | |||
| Loan yield | 11.2% | 11.4% | 11.2% | 11.7% | 11.1% | 11.3% | 10.9% | |||
| Net interest margin | 6.6% | 6.8% | 6.6% | 7.0% | 6.7% | 6.2% | 6.0% | |||
| Cost of funds | 4.0% | 3.8% | 3.9% | 3.8% | 3.7% | 3.9% | 3.5% | |||
| Cost:income ratio | 41.5% | 44.9% | 45.7% | 42.8% | 42.2% | 39.7% | 42.4% | |||
| Cost of credit risk ratio | 0.4% | 0.0% | 0.1% | 0.9% | 0.1% | 1.2% | 0.1% |
Other Businesses
The Business Division ' Other Businesses ' includes JSC Belarusky Narodny Bank (BNB) serving retail and SME clients in Belarus, JSC Digital Area - a digital ecosystem in Georgia including e-commerce, ticketing, and inventory management SaaS, Bank of Georgia Group PLC - the holding company, and other small entities and intragroup eliminations.
| GEL thousands | 3Q24 | 3Q23 | Change y-o-y |
2Q24 | Change q-o-q |
9M24 | 9M23 | Change y-o-y |
|
| INCOME STATEMENT HIGHLIGHTS | |||||||||
| Interest income | 20,771 | 19,575 | 6.1% | 21,275 | -2.4% | 61,877 | 52,074 | 18.8% | |
| Interest expense | (7,925) | (4,933) | 60.7% | (6,400) | 23.8% | (18,765) | (12,142) | 54.5% | |
| Net interest income | 12,846 | 14,642 | -12.3% | 14,875 | -13.6% | 43,112 | 39,932 | 8.0% | |
| Net fee and commission income | 2,109 | 2,288 | -7.8% | 1,172 | 79.9% | 3,732 | 5,526 | -32.5% | |
| Net foreign currency gain | 16,065 | 9,394 | 71.0% | 14,133 | 13.7% | 39,108 | 32,271 | 21.2% | |
| Net other income | (222) | 367 | NMF | 14,948 | NMF | 15,141 | 1,537 | NMF | |
| Operating income | 30,798 | 26,691 | 15.4% | 45,128 | -31.8% | 101,093 | 79,266 | 27.5% | |
| Salaries and other employee benefits | (11,655) | (11,216) | 3.9% | (11,039) | 5.6% | (32,750) | (32,780) | -0.1% | |
| Administrative expenses | (6,686) | (5,778) | 15.7% | (7,123) | -6.1% | (20,511) | (18,632) | 10.1% | |
| Depreciation, amortisation and impairment | (2,627) | (3,471) | -24.3% | (2,540) | 3.4% | (7,824) | (8,149) | -4.0% | |
| Other operating expenses | (318) | (555) | -42.7% | (315) | 1.0% | (995) | (859) | 15.8% | |
| Operating expenses | (21,286) | (21,020) | 1.3% | (21,017) | 1.3% | (62,080) | (60,420) | 2.7% | |
| Profit from associates | 113 | (31) | NMF | - | - | - | 472 | NMF | |
| Operating income before cost of risk | 9,625 | 5,640 | 70.7% | 24,111 | -60.1% | 39,013 | 19,318 | 102.0% | |
| Cost of risk | 733 | 2,743 | -73.3% | (4,182) | NMF | (5,978) | 5,822 | NMF | |
| Net operating income before non-recurring items | 10,358 | 8,383 | 23.6% | 19,929 | -48.0% | 33,035 | 25,140 | 31.4% | |
| Net non-recurring items | - | 58 | NMF | - | - | - | - | - | |
| Profit before income tax expense | 10,358 | 8,441 | 22.7% | 19,929 | -48.0% | 33,035 | 25,140 | 31.4% | |
| Income tax expense | (3,922) | (1,882) | 108.4% | (3,033) | 29.3% | (9,247) | (6,484) | 42.6% | |
| Profit | 6,436 | 6,559 | -1.9% | 16,896 | -61.9% | 23,788 | 18,656 | 27.5% | |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Sep-23 | Change y-o-y |
Jun-24 | Change q-o-q |
||||
| Cash and cash equivalents | 437,014 | 461,855 | -5.4% | 559,580 | -21.9% | ||||
| Amounts due from credit institutions | 31,343 | 22,745 | 37.8% | 24,064 | 30.2% | ||||
| Investment securities | 190,012 | 110,186 | 72.4% | 138,021 | 37.7% | ||||
| Loans to customers, factoring and finance lease receivables | 659,179 | 848,866 | -22.3% | 708,251 | -6.9% | ||||
| Property and equipment | 12,269 | 15,681 | -21.8% | 12,492 | -1.8% | ||||
| All remaining assets | 89,629 | 82,868 | 8.2% | 91,746 | -2.3% | ||||
| Total assets | 1,419,446 | 1,542,201 | -8.0% | 1,534,154 | -7.5% | ||||
| Client deposits and notes | 938,335 | 1,124,621 | -16.6% | 1,195,500 | -21.5% | ||||
| Amounts owed to credit institutions | (4,058) | 95,235 | NMF | 41,387 | NMF | ||||
| Debt securities issued | 3,113 | 11,271 | -72.4% | 4,559 | -31.7% | ||||
| All remaining liabilities | 190,727 | 38,730 | NMF | 38,470 | NMF | ||||
| Total liabilities | 1,128,117 | 1,269,857 | -11.2% | 1,279,916 | -11.9% | ||||
| Total equity | 291,329 | 272,344 | 7.0% | 254,238 | 14.6% |
In 3Q24 Other Businesses recorded a GEL 6.4m profit (down 1.9% y-o-y and down 61.9% q-o-q). In the prior quarter, we posted a GEL 12.6m revaluation effect in other income related to JSC Digital Area's investments in startup companies within the framework of 500 startup accelerator programme. In 9M24, Other Businesses posted a profit of a GEL 23.8m (up 27.5% y-o-y).
BNB's capital ratios, calculated in accordance with the National Bank of the Republic of Belarus' standards, were above the minimum requirements at 30 September 2024: Tier1 capital adequacy ratio at 11.9% (minimum requirement of 7.0%) and Total capital adequacy ratio at 17.4% (minimum requirement of 12.5%).
Consolidated financial information
| GEL thousands | 3Q24 | 3Q23 | Change y-o-y |
2Q24 | Change q-o-q |
9M24 | 9M23 | Change y-o-y |
|
| INCOME STATEMENT HIGHLIGHTS | |||||||||
| Interest income | 1,115,448 | 706,871 | 57.8% | 1,072,421 | 4.0% | 2,953,642 | 2,003,455 | 47.4% | |
| Interest expense | (474,412) | (286,895) | 65.4% | (454,086) | 4.5% | (1,256,451) | (815,670) | 54.0% | |
| Net interest income | 641,036 | 419,976 | 52.6% | 618,335 | 3.7% | 1,697,191 | 1,187,785 | 42.9% | |
| Fee and commission income | 237,407 | 168,108 | 41.2% | 240,319 | -1.2% | 660,110 | 521,808 | 26.5% | |
| Fee and commission expense | (103,307) | (49,159) | 110.1% | (89,657) | 15.2% | (267,546) | (201,392) | 32.8% | |
| Net fee and commission income | 134,100 | 118,949 | 12.7% | 150,662 | -11.0% | 392,564 | 320,416 | 22.5% | |
| Net foreign currency gain | 153,023 | 97,790 | 56.5% | 151,886 | 0.7% | 395,449 | 268,460 | 47.3% | |
| Net other income without one-offs | 9,501 | 5,738 | 65.6% | 28,112 | -66.2% | 45,406 | 96,476 | -52.9% | |
| One-off other income | - | - | - | - | - | - | 21,061 | NMF | |
| Net other income | 9,501 | 5,738 | 65.6% | 28,112 | -66.2% | 45,406 | 117,537 | -61.4% | |
| Operating income | 937,660 | 642,453 | 45.9% | 948,995 | -1.2% | 2,530,610 | 1,894,198 | 33.6% | |
| Salaries and other employee benefits | (203,484) | (106,739) | 90.6% | (217,152) | -6.3% | (526,947) | (305,510) | 72.5% | |
| Administrative expenses | (72,528) | (46,081) | 57.4% | (70,247) | 3.2% | (191,155) | (130,940) | 46.0% | |
| Depreciation, amortisation and impairment | (47,285) | (31,247) | 51.3% | (47,062) | 0.5% | (125,838) | (89,592) | 40.5% | |
| Other operating expenses | (3,137) | (1,247) | 151.6% | (3,360) | -6.6% | (8,353) | (2,807) | 197.6% | |
| Operating expenses | (326,434) | (185,314) | 76.2% | (337,821) | -3.4% | (852,293) | (528,849) | 61.2% | |
| Gain on bargain purchase | - | - | - | - | - | 685,888 | - | NMF | |
| Acquisition related costs | - | - | - | 679 | NMF | (16,423) | - | NMF | |
| Profit from associates | 502 | 302 | 66.2% | 378 | 32.8% | 978 | 1,202 | -18.6% | |
| Operating income before cost of risk | 611,728 | 457,441 | 33.7% | 612,231 | -0.1% | 2,348,760 | 1,366,551 | 71.9% | |
| Expected credit loss on loans to customers and factoring receivables | (12,363) | (27,762) | -55.5% | (79,472) | -84.4% | (109,179) | (105,752) | 3.2% | |
| Expected credit loss on finance lease receivables | 428 | (1,437) | NMF | (1,540) | NMF | (1,284) | (1,248) | 2.9% | |
| Other expected credit loss and impairment charge on other assets and provisions | 6,719 | (6,606) | NMF | (6,884) | NMF | (5,648) | (9,255) | -39.0% | |
| Cost of risk | (5,216) | (35,805) | -85.4% | (87,896) | -94.1% | (116,111) | (116,255) | -0.1% | |
| Net operating income before non-recurring items | 606,512 | 421,636 | 43.8% | 524,335 | 15.7% | 2,232,649 | 1,250,296 | 78.6% | |
| Net non-recurring items | - | 58 | NMF | - | - | - | - | - | |
| Profit before income tax expense | 606,512 | 421,694 | 43.8% | 524,335 | 15.7% | 2,232,649 | 1,250,296 | 78.6% | |
| Income tax expense | (97,259) | (64,330) | 51.2% | (93,668) | 3.8% | (254,876) | (183,079) | 39.2% | |
| Profit | 509,253 | 357,364 | 42.5% | 430,667 | 18.2% | 1,977,773 | 1,067,217 | 85.3% | |
| Attributable to: | |||||||||
| - shareholders of the Group | 507,272 | 355,803 | 42.6% | 427,944 | 18.5% | 1,971,452 | 1,062,654 | 85.5% | |
| - non-controlling interests | 1,981 | 1,561 | 26.9% | 2,723 | -27.2% | 6,321 | 4,563 | 38.5% | |
| Basic earnings per share | 11.71 | 8.12 | 44.2% | 9.79 | 19.6% | 45.12 | 23.76 | 89.9% | |
| Diluted earnings per share | 11.49 | 7.92 | 45.1% | 9.62 | 19.4% | 44.29 | 23.22 | 90.7% | |
| BALANCE SHEET HIGHLIGHTS | Sep-24 | Sep-23 | Change y-o-y |
Jun-24 | Change q-o-q |
||||
| Cash and cash equivalents | 3,413,286 | 2,959,832 | 15.3% | 3,422,747 | -0.3% | ||||
| Amounts due from credit institutions | 2,560,821 | 1,878,849 | 36.3% | 2,710,729 | -5.5% | ||||
| Investment securities | 8,054,364 | 5,419,376 | 48.6% | 7,825,372 | 2.9% | ||||
| Investment securities pledged under sale and repurchase agreements | 225,181 | - | NMF | 520,916 | -56.8% | ||||
| Loans to customers, factoring and finance lease receivables | 31,058,958 | 19,010,599 | 63.4% | 30,081,566 | 3.2% | ||||
| Accounts receivable and other loans | 7,193 | 48,860 | -85.3% | 7,667 | -6.2% | ||||
| Prepayments | 119,292 | 42,785 | 178.8% | 112,537 | 6.0% | ||||
| Foreclosed assets | 324,558 | 237,116 | 36.9% | 308,405 | 5.2% | ||||
| Right-of-use assets | 239,299 | 144,422 | 65.7% | 240,868 | -0.7% | ||||
| Investment properties | 112,400 | 132,896 | -15.4% | 124,334 | -9.6% | ||||
| Property and equipment | 534,234 | 430,181 | 24.2% | 529,715 | 0.9% | ||||
| Goodwill | 41,253 | 39,116 | 5.5% | 41,253 | 0.0% | ||||
| Intangible assets | 301,086 | 165,475 | 82.0% | 289,284 | 4.1% | ||||
| Income tax assets | 43,523 | 786 | NMF | 2,442 | NMF | ||||
| Other assets | 277,803 | 310,188 | -10.4% | 289,099 | -3.9% | ||||
| Assets held for sale | 52,177 | 29,332 | 77.9% | 21,487 | 142.8% | ||||
| Total assets | 47,365,428 | 30,849,813 | 53.5% | 46,528,421 | 1.8% | ||||
| Client deposits and notes | 31,872,416 | 21,743,543 | 46.6% | 30,706,272 | 3.8% | ||||
| Amounts owed to credit institutions | 5,701,966 | 3,163,001 | 80.3% | 6,366,603 | -10.4% | ||||
| Debt securities issued | 2,220,896 | 425,560 | NMF | 2,128,224 | 4.4% | ||||
| Lease liability | 249,929 | 145,517 | 71.8% | 253,457 | -1.4% | ||||
| Accruals and deferred income | 249,187 | 106,042 | 135.0% | 220,153 | 13.2% | ||||
| Income tax liabilities | 68,504 | 158,956 | -56.9% | 98,125 | -30.2% | ||||
| Other liabilities | 470,988 | 372,016 | 26.6% | 592,296 | -20.5% | ||||
| Total liabilities | 40,833,886 | 26,114,635 | 56.4% | 40,365,130 | 1.2% | ||||
| Share capital | 1,474 | 1,511 | -2.4% | 1,481 | -0.5% | ||||
| Additional paid-in capital | 454,881 | 459,630 | -1.0% | 439,451 | 3.5% | ||||
| Treasury shares | (49) | (69) | -29.0% | (49) | 0.0% | ||||
| Capital redemption reserve | 145 | 107 | 35.5% | 137 | 5.8% | ||||
| Other reserves | 103,754 | 29,458 | NMF | 70,873 | 46.4% | ||||
| Retained earnings | 5,947,108 | 4,225,583 | 40.7% | 5,628,354 | 5.7% | ||||
| Total equity attributable to shareholders of the Group | 6,507,313 | 4,716,220 | 38.0% | 6,140,247 | 6.0% | ||||
| Non-controlling interests | 24,229 | 18,958 | 27.8% | 23,044 | 5.1% | ||||
| Total equity | 6,531,542 | 4,735,178 | 37.9% | 6,163,291 | 6.0% | ||||
| Total liabilities and equity | 47,365,428 | 30,849,813 | 53.5% | 46,528,421 | 1.8% | ||||
| Book value per share | 150.46 | 107.64 | 39.8% | 141.14 | 6.6% |
Additional information
| Employees (period-end) | Sep-24 | Sep-23 | Change y-o-y | Jun-24 | Change q-o-q |
| Bank of Georgia (standalone) | 7,796 | 7,185 | 8.5% | 7,748 | 0.6% |
| Ameriabank | 1,975 | N/A [7] | N/A | 1,919 | 2.9% |
| Other | 2,051 | 1,884 | 8.9% | 2,052 | 0.0% |
| Group | 11,822 | 9,096 | 30.4% | 11,719 | 0.9% |
Branch network (period-end)
| Sep-24 | Sep-23 | Change y-o-y | Jun-24 | Change q-o-q | |
| Bank of Georgia | 185 | 191 | -3.1% | 182 | 1.6% |
| Of which: | |||||
| Full-scale branches | 95 | 90 | 5.6% | 95 | 0.0% |
| Transactional branches | 90 | 101 | -10.9% | 87 | 3.4% |
| Ameriabank | 26 | N/A [8] | N/A | 26 | 0.0% |
| Unadjusted ratios of the Group | 3Q24 | 3Q23 | 2Q24 | 9M24 | 9M23 | ||
| ROAA | 4.4% | 4.8% | 3.9% | 6.5% | 5.0% | ||
| ROAE | 32.1% | 30.7% | 28.1% | 45.6% | 31.7% | ||
| Cost:income ratio | 34.8% | 28.8% | 35.6% | 33.7% | 27.9% |
| FX rates | Sep-24 | Sep-23 | Jun-24 |
| GEL/USD exchange rate (period-end) | 2.73 | 2.68 | 2.81 |
| GEL/GBP exchange rate (period-end) | 3.66 | 3.29 | 3.55 |
| GEL/1000AMD exchange rate (period-end) | 7.05 | 6.74 | 7.25 |
| Shares outstanding | Sep-24 | Sep-23 | Jun-24 |
| Ordinary shares outstanding (period-end) | 43,249,397 | 43,816,379 | 43,504,016 |
| Treasury shares outstanding (period-end) | 1,477,586 | 2,098,344 | 1,480,930 |
| Total shares outstanding (period-end) | 44,726,983 | 45,914,723 | 44,984,946 |
Glossary
Strategic terms
§ Active merchant At least one transaction executed within the past month
§ Active POS terminal At least one transaction executed within the past month
§ MAC (Monthly active customer - retail or business) Number of customers who satisfied pre-defined activity criteria within the past month
§ Digital monthly active user (Digital MAU) Number of retail customers who logged into our mBank/iBank/sCoolApp at least once within the past month; when referring to business customers, Digital MAU means number of business customers who logged into our Business mBank/iBank at least once within the past month
§ Digital daily active user (Digital DAU) Average daily number of retail customers who logged into our mBank/iBank/sCoolApp at least one within the past month
§ Payment MAU Number of retail customers who made at least one payment with a BOG card within the past month
§ Net Promoter Score (NPS) NPS asks: on a scale of 0-10, how likely is it that you would recommend Bank of Georgia to a friend or a colleague? The responses: 9 and 10 - are promoters; 7 and 8 - are neutral; 1 to 6 - are detractors. The final score equals the percentage of the promoters minus the percentage of the detractors.
Ratio definitions and abbreviations
§ Alternative performance measures (APMs) In this announcement the management uses various APMs, which we believe provide additional useful information for understanding the financial performance of the Group. These APMs are not defined by International Financial Reporting Standards, and also 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 the 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 period
§ 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
§ CBA Central Bank of Armenia
§ CBA Common Equity Tier 1 (CET1) capital adequacy ratio Common Equity Tier 1 capital divided by total risk weighted assets, both calculated in accordance with the requirements of the CBA
§ CBA Tier 1 capital adequacy ratio Tier 1 capital divided by total risk weighted assets, both calculated in accordance with the requirements of the CBA
§ CBA Total capital adequacy ratio Total regulatory capital divided by total risk weighted assets, both calculated in accordance with the requirements of the CBA
§ CBA Liquidity coverage ratio (LCR) High-quality liquid assets divided by net cash outflows over the next 30 days (as defined by the CBA)
§ CBA Net stable funding ratio (NSFR) Available amount of stable funding divided by the required amount of stable funding (as defined by the CBA
§ Cost of credit risk ratio Expected loss on loans to customers, factoring and finance lease receivables for the period divided by monthly average gross loans to customers, finance lease and factoring over the same period (annualised where applicable)
§ Cost of deposits Interest expense on client deposits and notes for the period divided by monthly average client deposits and notes over the same period (annualised where applicable)
§ Cost of funds Interest expense for the period divided by monthly average interest-bearing liabilities over the same period (annualised where applicable)
§ Cost to income ratio Operating expenses divided by operating income
§ FC Foreign currency
§ 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 loans to customers, factoring and finance lease receivables
§ IFRS-based NBG Liquidity coverage ratio (LCR) High-quality liquid assets divided by net cash outflows over the next 30 days (as defined by the NBG). Calculations are made for Bank of Georgia standalone, based on IFRS
§ IFRS-based NBG Net stable funding ratio (NSFR) Available amount of stable funding divided by the required amount of stable funding (as defined by the NBG). Calculations are made for Bank of Georgia standalone, based on IFRS
§ LC Local currency
§ Leverage (times) Total liabilities divided by total equity
§ Liquid assets Cash and cash equivalents, amounts due from credit institutions and investment securities
§ Loan yield Interest income from loans to customers, factoring and finance lease receivables for the period divided by monthly average gross loans to customers, factoring and finance lease receivables over the same period (annualised where applicable)
§ NBG National Bank of Georgia
§ NBG (Basel III) Common Equity Tier 1 (CET1) capital adequacy ratio Common Equity Tier 1 capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG. Calculations are made for Bank of Georgia standalone, based on IFRS
§ NBG (Basel III) Tier 1 capital adequacy ratio Tier 1 capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG. Calculations are made for Bank of Georgia standalone, based on IFRS
§ 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. Calculations are made for Bank of Georgia standalone, based on IFRS
§ Net interest margin (NIM) Net interest income for the period divided by monthly average interest earning assets excluding cash and cash equivalents and corporate shares over the same period (annualised where applicable)
§ Non-performing loans (NPLs) The principal and/or interest payments on loans overdue for more than 90 days; or the exposures experiencing substantial deterioration of their creditworthiness and the debtors assessed as unlikely to pay their credit obligation(s) in full without realisation of collateral
§ NPL coverage ratio Allowance for expected credit loss for loans to customers, finance lease and factoring receivables divided by NPLs
§ NPL coverage ratio adjusted for discounted value of collateral Allowance for expected credit loss for loans to customers, finance lease and factoring receivables divided by NPLs (discounted value of collateral is added back to allowance for expected credit loss)
§ One-off items Significant items that do not arise during the ordinary course of business
§ 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 (annualised where applicable)
§ 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 (annualised where applicable)
§ NMF No meaningful figure
Constant currency basis
To calculate the q-o-q growth of loans and deposits without the currency exchange rate effect, we used the relevant exchange rates as of 30 June 2024. To calculate the y-o-y growth without the currency exchange rate effect, we used the relevant exchange rates as at 30 September 2023. Constant currency growth is calculated separately for GFS and AFS, based on their respective underlying performance.
Bank of Georgia Group PLC profile
Bank of Georgia Group PLC (the "Company" or the "Group" when referring to the group companies as a whole) is a FTSE 250 holding company whose subsidiaries provide banking and financial services focused in the high-growth Georgian and Armenian markets through leading, customer-centric, universal banks - Bank of Georgia in Georgia and Ameriabank in Armenia. By building on our competitive strengths, we are committed to driving business growth, sustaining high profitability, and generating strong returns, while creating opportunities for our stakeholders and making a positive contribution in the communities where we operate.
Bank of Georgia Group PLC is listed on the London Stock Exchange's main market in the Equity Shares (Commercial Companies) category and is a constituent of the FTSE 250 index. Ticker: BGEO.
Legal entity identifier: 213800XKDG12NQG8VC53
Registered address: 29 Farm Street, London, W1J 5RL, United Kingdom; Registered under number 10917019 in England and Wales
Company secretary: Computershare Company Secretarial Services Limited (The Pavilions, Bridgwater Road, Bristol BS13 8FD, United Kingdom)
Registrar: Computershare Investor Services PLC (The Pavilions Bridgwater Road, Bristol BS99 6ZZ, 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.uk.computershare.com/Investor/#Home
Investor Centre Shareholder Helpline: +44 (0)370 873 5866
Auditors: Ernst & Young LLP (25 Churchill Place Canary Wharf, London E14 5EY, United Kingdom)
Contacts:
Email: [email protected]
Telephone: +44(0) 203 178 4052
Michael Oliver (Advisor to the CEO): [email protected] ; +44 203 178 4034
Nini Arshakuni (Head of Investor Relations): [email protected] ; +995 322 444 444 (7515)
Further information
For more on results publications, go to Results Centre on www.bankofgeorgiagroup.com/results/earnings
For more on investor information, go to www.bankofgeorgiagroup.com/information/shareholder
For news updates, go to www.bankofgeorgiagroup.com/news
For share price information, go to www.bankofgeorgiagroup.com/information/share-price
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; geopolitical risk; credit risk; liquidity and funding risk; capital risk; market risk; regulatory and legal risk; conduct risk; financial crime risk; information security and data protection risks; operational risk; human capital risk; model risk; strategic risk; reputational risk; climate-related 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 2023 and in 1H24 Results. 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.
[1] Year-on-year comparisons are given for informational purposes only as Ameriabank was not part of the Group as at 30 September 2023.
[2] In 2Q24, GEL 0.7m was recorded as a one-off item due to a recovery of a small portion of the previously expensed acquisition-related advisory fee. The acquisition of Ameriabank in March 2024 resulted in 1Q24 one-off items totalling GEL 668.8m comprising a one-off gain on bargain purchase (provisional, subject to year-end audit) and acquisition-related costs. 9M24 operating income before cost of risk and subsequent lines in the income statement as well as ROAA and ROAE were adjusted for these one-off items.
Due to the settlement of a legacy claim, the fair value revaluation of the receivable resulted in a one-off other income of GEL 21.1 million posted in 2Q23. Net other income was adjusted for this one-off. As a result, ROAA, ROAE and Cost:income ratio were adjusted for one-off other income in 9M23. Comparisons given in text are with adjusted figures of the respective periods.
[3] 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.
[4] For 9M24, ROAA, net interest margin, loan yield, liquid assets yield, cost of funds, cost of client deposits and notes, cost of amounts owed to credit institutions, cost of debt securities issued, and cost of credit risk ratio were adjusted to exclude the effect of Ameriabank's consolidation at the end of March on average balances.
[5] Includes current accounts, time deposits and issued local bonds.
[6] Ratios are calculated based on quarterly averages.
[7] The number of Ameriabank's employees amounted to 1,655 as of 30 September 2023. The figure is not included in the table, as Ameriabank was not part of the Group as of 30 September 2023.
[8] Ameriabank had 25 branches as of 30 September 2023. The figure is not included in the table, as Ameriabank was not part of the Group as of 30 September 2023.
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