Bank of Georgia results boosted by lari appreciation and rising rates

(Alliance News) - Bank of Georgia PLC on Thursday delivered an optimistic set of results as it continues to benefit from the strength of the Georgian economy and the appreciation of its currency.

In the three months that ended September 30, Bank of Georgia's pretax profit rose 55% to GEL318.3 million, or GBP103.2 million, from GEL206.0 million last year.

The Tbilisi, Georgia-based lender saw operating income rise 51% to GEL526.5 million from GEL347.8 million last year.

The company said its performance was "supported by the growth momentum of the Georgian economy" despite the impact of the war in Ukraine.

Regarding the wider economy, Chief Executive Officer Archil Gachechiladze said "the Georgian economy has performed much better than we anticipated in the beginning of the year. Following upward revisions by international organisations and local authorities, full-year real GDP growth is now expected at 10.2%. The debt burden in the economy has reduced, with bank loans to GDP down to 62% in the third quarter of 2022, from the highest level of 77.6% reached in 2020. Furthermore, public debt to GDP is expected at 39.6% in 2022, down from 60.1% during 2020."

The bank's top-line was boosted by continued strong net foreign currency gains on the back of migrant and tourism inflows.

Net foreign currency gains multiplied to GEL150.7 million from GEL33.4 million last year. The bank noted that the lari has benefitted from tight monetary policy and "improved sentiments" which has seen it gain 10% against the dollar in the year to date. It noted the Lari is "expected to remain stable in the medium term".

Interest income rose 21% to GEL295.1 million, while fee & commission income increased 28% to GEL79.7 million.

The company's Common Equity Tier 1 ratio increased to 14.8% from 12.8% last year.

Gachechiladze said "Bank of Georgia is consistently delivering high profitability while maintaining a strong capital position, with CET1 ratio at 14.8% at 30 September 2022, 320 basis points above the minimum requirement.

"As Georgia's role as a transport, trading, and logistics corridor in the region is strengthening, the attention from international companies and investors will likely increase, and Bank of Georgia remains well-positioned to continue serving the country and our customers during this important period of time."

Shares in Bank of Georgia were trading 3.1% higher at 2,490.00 pence each in London on Thursday morning.

By Chris Dorrell; [e-mail]

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