4Q23 AND FY23 FINANCIAL
HIGHLIGHTS
Due to the settlement of a legacy claim, the fair value
revaluation of the receivable resulted in a one-off other income of
GEL 1.5 million posted in 4Q23 and one-off other income of GEL 22.6
for FY23. Net other income has been adjusted for these one-offs.
Due to the settlement of the same legacy claim, 4Q22 and FY22 net
other income was adjusted for a one-off GEL 391.1 million. The
entire legacy claim amount has already been settled. 4Q22 and FY22
income tax expense was adjusted for a one-off GEL 79.3 income tax
expense due to an amendment to the corporate taxation model in
Georgia. As a result, ROAA and ROAE were adjusted for both one-off
other income and one-off income tax expense where applicable and
Cost:income ratios were adjusted for one-off other income where
applicable. Comparisons given in text are with adjusted figures of
respective periods. You can see the unadjusted P&L on page 18
and the unadjusted ratios on page 19.
GEL
thousands
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGLIGHTS
|
|
|
|
|
|
|
|
|
|
Net interest income
|
427,661
|
334,645
|
27.8%
|
419,976
|
1.8%
|
|
1,615,446
|
1,182,335
|
36.6%
|
Net fee and commission
income
|
114,066
|
97,932
|
16.5%
|
118,949
|
-4.1%
|
|
434,482
|
317,491
|
36.8%
|
Net foreign currency gain
|
97,251
|
125,395
|
-22.4%
|
97,790
|
-0.6%
|
|
365,711
|
466,094
|
-21.5%
|
Net other income
|
18,260
|
26,930
|
-32.2%
|
5,738
|
218.2%
|
|
114,735
|
36,092
|
217.9%
|
Operating income
|
657,238
|
584,902
|
12.4%
|
642,453
|
2.3%
|
|
2,530,374
|
2,002,012
|
26.4%
|
Operating expenses
|
(225,205)
|
(181,062)
|
24.4%
|
(185,314)
|
21.5%
|
|
(754,053)
|
(641,186)
|
17.6%
|
Profit from associates
|
254
|
128
|
98.4%
|
302
|
-15.9%
|
|
1,456
|
754
|
93.1%
|
Operating income before cost of risk
|
432,287
|
403,968
|
7.0%
|
457,441
|
-5.5%
|
|
1,777,777
|
1,361,580
|
30.6%
|
Cost of risk
|
(27,810)
|
(52,675)
|
-47.2%
|
(35,805)
|
-22.3%
|
|
(144,064)
|
(119,068)
|
21.0%
|
Net
operating income before non-recurring items
|
404,477
|
351,293
|
15.1%
|
421,636
|
-4.1%
|
|
1,633,713
|
1,242,512
|
31.5%
|
Net non-recurring
items
|
-
|
329
|
-100.0%
|
58
|
-100.0%
|
|
-
|
1,038
|
-100.0%
|
Profit before income tax expense and one-off
items
|
404,477
|
351,622
|
15.0%
|
421,694
|
-4.1%
|
|
1,633,713
|
1,243,550
|
31.4%
|
Income tax expense
|
(75,891)
|
(25,723)
|
195.0%
|
(64,330)
|
18.0%
|
|
(258,971)
|
(111,376)
|
132.5%
|
Profit adjusted for one-off items
|
328,586
|
325,899
|
0.8%
|
357,364
|
-8.1%
|
|
1,374,742
|
1,132,174
|
21.4%
|
One-off items
|
1,524
|
311,825
|
-99.5%
|
-
|
-
|
|
22,585
|
311,825
|
-92.8%
|
Profit
|
330,110
|
637,724
|
-48.2%
|
357,364
|
-7.6%
|
|
1,397,327
|
1,443,999
|
-3.2%
|
Basic earnings per share
|
7.53
|
14.10
|
-46.6%
|
8.12
|
-7.3%
|
|
31.30
|
30.99
|
1.0%
|
Diluted earnings per share
|
7.31
|
13.61
|
-46.3%
|
7.92
|
-7.7%
|
|
30.43
|
30.33
|
0.3%
|
GEL
thousands
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
Liquid assets
|
9,984,238
|
10,367,600
|
-3.7%
|
10,258,057
|
-2.7%
|
Cash and cash equivalents
|
3,101,824
|
3,584,843
|
-13.5%
|
2,959,832
|
4.8%
|
Amounts due from credit institutions
|
1,752,657
|
2,433,028
|
-28.0%
|
1,878,849
|
-6.7%
|
Investment securities
|
5,129,757
|
4,349,729
|
17.9%
|
5,419,376
|
-5.3%
|
Loans to customers and finance lease
receivables
|
20,232,721
|
16,861,706
|
20.0%
|
19,010,599
|
6.4%
|
Property and equipment
|
436,955
|
398,855
|
9.6%
|
430,181
|
1.6%
|
All remaining assets
|
1,103,644
|
1,273,739
|
-13.4%
|
1,150,976
|
-4.1%
|
Total assets
|
31,757,558
|
28,901,900
|
9.9%
|
30,849,813
|
2.9%
|
Client deposits and notes
|
20,522,739
|
18,261,397
|
12.4%
|
21,743,543
|
-5.6%
|
Amounts owed to credit
institutions
|
5,156,009
|
5,266,653
|
-2.1%
|
3,163,001
|
63.0%
|
Borrowings from DFIs
|
2,124,264
|
1,867,454
|
13.8%
|
2,084,165
|
1.9%
|
Short-term loans from central banks
|
2,101,653
|
1,715,257
|
22.5%
|
180,099
|
1066.9%
|
Loans and deposits from commercial banks
|
930,092
|
1,683,942
|
-44.8%
|
898,737
|
3.5%
|
Debt securities issued
|
421,359
|
645,968
|
-34.8%
|
425,560
|
-1.0%
|
All remaining liabilities
|
637,615
|
479,060
|
33.1%
|
782,531
|
-18.5%
|
Total liabilities
|
26,737,722
|
24,653,078
|
8.5%
|
26,114,635
|
2.4%
|
Total equity
|
5,019,836
|
4,248,822
|
18.1%
|
4,735,178
|
6.0%
|
Book
value per share
|
114.62
|
94.07
|
21.8%
|
107.64
|
6.5%
|
KEY
RATIOS
|
4Q23
|
4Q22
|
|
3Q23
|
|
FY23
|
FY22
|
|
ROAA
|
4.2%
|
4.7%
|
|
4.8%
|
|
4.7%
|
4.4%
|
|
ROAE
|
26.7%
|
33.7%
|
|
30.7%
|
|
29.9%
|
32.4%
|
|
Net interest margin
|
6.3%
|
5.7%
|
|
6.6%
|
|
6.5%
|
5.4%
|
|
Loan yield
|
12.4%
|
12.0%
|
|
12.6%
|
|
12.5%
|
11.5%
|
|
Liquid assets yield
|
5.0%
|
4.2%
|
|
4.7%
|
|
4.7%
|
4.3%
|
|
Cost of funds
|
4.9%
|
4.6%
|
|
4.7%
|
|
4.7%
|
4.9%
|
|
Cost of client deposits and
notes
|
4.2%
|
3.4%
|
|
4.2%
|
|
4.0%
|
3.6%
|
|
Cost of amounts owed to credit
Institutions
|
7.7%
|
8.5%
|
|
8.0%
|
|
8.0%
|
8.9%
|
|
Cost of debt securities
issued
|
9.3%
|
7.5%
|
|
8.6%
|
|
8.2%
|
7.1%
|
|
Cost:income ratio
|
34.3%
|
31.0%
|
|
28.8%
|
|
29.8%
|
32.0%
|
|
NPLs to gross loans
|
2.3%
|
2.7%
|
|
2.4%
|
|
2.3%
|
2.7%
|
|
NPL coverage ratio
|
69.2%
|
66.4%
|
|
69.1%
|
|
69.2%
|
66.4%
|
|
NPL coverage ratio adjusted for the
discounted value of collateral
|
117.6%
|
128.9%
|
|
122.1%
|
|
117.6%
|
128.9%
|
|
Cost of credit risk ratio
|
0.4%
|
0.9%
|
|
0.6%
|
|
0.7%
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
NBG (Basel III) CET 1 capital
adequacy ratio
|
n/a
|
14.7%
|
|
n/a
|
|
n/a
|
14.7%
|
|
Minimum regulatory requirement
|
n/a
|
11.6%
|
|
n/a
|
|
n/a
|
11.6%
|
|
NBG (Basel III) Tier I capital
adequacy ratio
|
n/a
|
16.7%
|
|
n/a
|
|
n/a
|
16.7%
|
|
Minimum regulatory requirement
|
n/a
|
13.8%
|
|
n/a
|
|
n/a
|
13.8%
|
|
NBG (Basel III) Total capital
adequacy ratio
|
n/a
|
19.8%
|
|
n/a
|
|
n/a
|
19.8%
|
|
Minimum regulatory requirement
|
n/a
|
17.2%
|
|
n/a
|
|
n/a
|
17.2%
|
|
|
|
|
|
|
|
|
|
|
IFRS-based NBG (Basel III) CET 1
capital adequacy ratio
|
18.2%
|
n/a
|
|
18.5%
|
|
18.2%
|
n/a
|
|
Minimum regulatory requirement
|
14.5%
|
n/a
|
|
14.7%
|
|
14.5%
|
n/a
|
|
IFRS-based NBG (Basel III) Tier I
capital adequacy ratio
|
20.0%
|
n/a
|
|
20.4%
|
|
20.0%
|
n/a
|
|
Minimum regulatory requirement
|
16.7%
|
n/a
|
|
16.9%
|
|
16.7%
|
n/a
|
|
IFRS-based NBG (Basel III) Total
capital adequacy ratio
|
22.1%
|
n/a
|
|
22.6[1]%
|
|
22.1%
|
n/a
|
|
Minimum regulatory requirement
|
19.6%
|
n/a
|
|
19.9%
|
|
19.6%
|
n/a
|
|
CHIEF EXECUTIVE OFFICER'S STATEMENT
2024 started off with a major event
in the Group's history, and before I discuss the 2023 results, I
would like to touch on the news. In February we announced the
proposed acquisition of Ameriabank, a leading universal bank in
Armenia, a neighbouring country to Georgia. Armenia and Georgia are
both prudently managed economies of similar size, with high GDP
growth rates. Ameriabank is a leading franchise in the local market
- #1 by loans and #2 by deposits - and is the "top-of-mind" banking
brand in Armenia, with further upside to grow, especially in the
retail and SME segments, leveraging the Group's experience and
know-how in digitalisation, payments, and customer experience. I
believe this acquisition, which was approved by the shareholders on
March 14th, is a great opportunity for the Group to
increase scale and unlock further growth. We are set to acquire
Ameriabank with our surplus capital, with no dilution for
shareholders, and it is expected to be immediately earnings
enhancing with an ROE uplift. Importantly, our dividend and capital
distribution policy and payout ratio of 30-50% will not change.
Considering the Group's strong performance during 2023 and robust
capital and liquidity positions, the Board intends to recommend, at
the 2024 Annual General Meeting, a final dividend for 2023 of GEL
4.94 per share, making a total dividend for 2023 of GEL 8.00 per
share. This is a 5% increase on the dividend for 2022 - a year
boosted by significant one-offs and FX income which broadly
normalised in 2023. In addition, the Board has also approved an
extension of the buyback and cancellation programme by an
additional GEL 100 million. This represents an overall dividend and
share buyback pay-out ratio for the year ended 31 December 2023 of
37% (2022: 37%).
Turning to the Group's recent
performance, 2023 was another successful year during which we
continued to deliver on our strategic priorities. Our team's
dedication to improving the customer experience, especially in
digital channels, has resulted in a 21.0% year-on-year growth in
Digital MAU[2] to
almost 1.4 million. We closed the year with a Net Promoter Score of
59, highlighting our dedication to customer satisfaction. Our
payments business continued to grow, with the volume of acquiring
transactions in Georgia up 46.5% year-on-year in 2023, achieving a
54.9% market share in December 2023. In addition, more than 1.2
million individuals used Bank of Georgia's cards for payments at
least once in December 2023, a 20.1% increase over the same period
in 2022.
This focus on customer needs and
product quality, coupled with the favourable macroeconomic
conditions, translated into full year operating income before cost
of risk (adjusted for one-off items) of GEL 1,777.8m, up 30.6%
year-on-year, profit (adjusted for one-off items) of GEL 1,374.7
million, up 21.4% year-on-year and ROAE of 29.9%[3]. On the portfolio side, loan book
growth picked up in 2023 and was 19.6% year-on-year on a constant
currency basis, while deposit growth was 12.2% year-on-year on a
constant currency basis, building on the significant inflows during
2022. This continued strong balance sheet growth has more than
offset the expected net interest margin erosion in the second half
of 2023. Going forward, we expect our double-digit balance sheet
growth to more than offset the margin impact of deposit re-pricing
and lower policy rates.
We delivered positive operating
leverage year-on-year in FY23, but the growth in operating expenses
was high in the fourth quarter, partly reflecting the impact of
transaction costs relating to the acquisition of Ameriabank, as
well as ongoing business development projects. These investments
are expected to underpin our future business growth, whilst we will
also continue to ensure we maintain a strong focus on day-to-day
efficiency and cost control. And, finally, a key positive aspect of
these results is the continued strength of our loan portfolio,
which translated into a lower cost of credit risk, particularly in
Retail.
The Group remains well-positioned to
capture the benefits of strong economic activity in the region.
Georgia's EU candidacy status, a significant milestone achieved in
December 2023, which has defined the country's geopolitical vector,
is expected to support ongoing investments in the Georgian economy.
We expect both Georgian and Armenian real GDPs to grow by more than
5% in 2024, and we remain focused on our strategic priorities to
unlock growth opportunities and sustainably deliver strong growth
and high profitability.
Archil Gachechiladze,
CEO, Bank of Georgia Group
PLC
14 March 2024
MACROECONOMIC DEVELOPMENTS
Strong economic growth
The Georgian economy maintained its
strong growth momentum in 2023 as domestic spending on consumption
and investment picked up to offset slowing external demand. The
ongoing recovery in international tourism and gradual exit from
tight monetary policy also supported the strong economic
performance. According to preliminary data by Geostat, real GDP
growth was 7.5% in 2023, with the main contributions from the
trade, IT, construction, transport and education sectors. Economic
activity is expected to remain robust with 6.0% real GDP growth in
2024, driven by strong consumption and investment expenditure along
with resilient external demand. The granting of Georgia's EU
candidate status by the European Council in December 2023 is also
expected to help the economy by improving sentiment among consumers
and investors. Sustained geopolitical instability in the region and
tight global financial conditions pose downside risks to the
outlook, however, increased fiscal space and replenished
international reserves cushion the economy from possible
shocks.
Resilient external sector
Georgia's international merchandise
trade slowed in 2023 reflecting the prior year's high base and
falling commodity prices. Exports and imports of goods posted
modest y-o-y contractions in the last quarter of 2023, resulting in
9.1% and 14.0% growth rates for the full year, respectively. The
slowing merchandise exports were partially offset by robust growth
in tourism revenues and solid increases in other service exports
including IT and transportation services. In 2023, tourism revenues
increased by 17.3% y-o-y, while the number of tourist visits
recovered to 91.9% of the 2019 level, suggesting room for further
growth. Remittances remained solid despite a contraction from the
prior year's record-high levels. Declining migrant-related inflows
were substituted by increased money transfers from the US and EU
countries leading to a modest decrease in total remittances of 5.7%
in 2023. Overall, external sector inflows are expected to remain
sound on the back of strong external demand and diversified income
sources.
Healthy bank lending
Bank lending growth remained robust
in the last quarter of 2023, increasing by 17.1% y-o-y on a
constant currency basis, following the 14.9% y-o-y growth in the
previous quarter. Credit growth was evenly split between local and
foreign currency lending, while loan dollarisation stood at 45.2%
at end-2023 (down 0.3 ppts y-o-y). Importantly, the growth in legal
entity lending has remained above the growth in household loans
since mid-2023, indicating a more productive allocation of funds
with favourable effects on medium-term economic growth prospects.
The quality of the banking sector's credit portfolio was sound,
with the sector's non-performing loans ratio at 1.5% at
end-2023.
Easing of macroprudential policy
In the last quarter of 2023, the
National Bank of Georgia introduced changes to several regulations
to soften the impact of the globally tight financial conditions on
the Georgian financial system. Specifically, the accumulation
period of the countercyclical buffer was extended from one to four
years and the upper limit of the mandatory reserve requirement on
short-term FX liabilities was reduced from 25% to 20%. These
measures are expected to increase FX liquidity in the banking
system and provide more flexibility in capital buffer accumulation,
thus supporting increased access to credit.
Continued fiscal consolidation
After sizeable improvements in
fiscal performance in 2022, the Government of Georgia remained
committed to fiscal consolidation. In 2023, the estimated fiscal
deficit was reduced to 2.5% of GDP (down from 3.0% of GDP in 2022)
and the estimated total public debt to GDP ratio declined to 39.1%
(from 39.5% in 2022). Thanks to robust economic growth in 2023,
consolidated budget tax revenues increased by 13.5% y-o-y. In 2024,
the Government plans to further reduce the fiscal deficit and the
public debt relative to GDP. The plan is underpinned by
demonstrated fiscal discipline and a positive growth outlook. The
ongoing consolidation helps strengthen fiscal buffers and ensure
fiscal sustainability.
Low
inflation
Inflation remained low on the back
of reducing domestic price pressures and declining import prices in
the last quarter of 2023. Headline CPI inflation was 0.4% y-o-y in
December 2023, a significant decrease from 9.8% registered in
December 2022. Inflation is expected to remain close to the central
bank's 3% target in 2024. However, upside risks to inflation
persist considering the strong domestic economic performance and
geopolitical instability in the region and in the Middle East.
Steady improvements in the inflation outlook enabled the National
Bank of Georgia to cut the policy rate by a total of 1.5 ppts
throughout 2023. On 13 March 2024, the central bank delivered an
additional rate cut of 0.75 ppts after reducing the rate by 0.5
ppts in January, thereby bringing the refinancing rate down to
8.25%. More interest rate reductions are expected in 2024 amid
improved inflation outlook.
Stable GEL
Sustained external inflows continue
to support the local currency. Despite some interim volatility, GEL
remained broadly unchanged against USD in 2023, after a 12.5%
appreciation in 2022. In the medium term, GEL is expected to remain
stable.
DELIVERING VALUE IN 4Q23 AND FY23
The Group's business consists of four key business segments.
(1) Retail Banking (RB)
operations in Georgia, comprising sub-segments that serve mass
retail (Mass Retail), and mass affluent and high-net-worth clients
(Premium Banking). (2) SME Banking
(SME) operations in Georgia, serving small and medium-sized
businesses[4]. (3)
Corporate and Investment Banking (CIB) operations in Georgia, serving
corporate and institutional customers and providing capital markets
and brokerage services through JSC Galt & Taggart. (4) JSC
Belarusky Narodny Bank (BNB), serving retail and SME clients in
Belarus.
Strategic Review
The following figures are given for JSC Bank of Georgia unless
otherwise stated
ACTIVE
CUSTOMERS
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
|
Number of monthly active retail
customers
|
1,808,907
|
1,632,439
|
10.8%
|
1,739,336
|
4.0%
|
|
Number of monthly active legal
entities
|
97,810
|
81,342
|
20.2%
|
91,862
|
6.5%
|
|
DIGITAL
|
|
|
|
|
|
|
Monthly active digital users (Digital
MAU: retail customers)
|
1,357,157
|
1,121,434
|
21.0%
|
1,262,867
|
7.5%
|
|
Share of MAU in total active retail
customers
|
75.0%
|
68.7%
|
|
72.6%
|
|
|
DAU/MAU
|
50.9%
|
47.6%
|
|
46.8%
|
|
|
Volume in GEL
thousands
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
DIGITAL
|
|
|
|
|
|
|
Number of transactions in
mBank, iBank
and sCoolApp (thousands)[5]
|
74,374
|
51,699
|
43.9%
|
62,564
|
18.9%
|
|
Share of products sold
digitally[6]
|
70.3%
|
47.1%
|
|
45.2%
|
|
|
PAYMENTS
|
|
|
|
|
|
|
Number of active POS terminals
(in-store and online)
|
39,620
|
34,884
|
13.6%
|
37,419
|
5.9%
|
|
Number of active merchants (in-store
and online)
|
18,335
|
14,507
|
26.4%
|
17,315
|
5.9%
|
|
Volume of transactions in BOG's
acquiring (in-store and online)
|
4,454,869
|
3,223,209
|
38.2%
|
4,047,230
|
10.1%
|
|
CUSTOMER
SATISFACTION
|
|
|
|
|
|
|
Net promoter score
(NPS)[7]
|
59.3
|
58.4
|
|
58.7
|
|
|
OUR
EMPLOYEES AT PERIOD-END:
|
|
|
|
|
|
|
Bank of Georgia
(standalone)
|
7,435
|
6,597
|
12.7%
|
7,185
|
3.5%
|
|
BNB
|
809
|
774
|
4.5%
|
799
|
1.3%
|
|
Others
|
1,154
|
1,020
|
13.1%
|
1,085
|
6.4%
|
|
Group total
|
9,398
|
8,391
|
12.0%
|
9,069
|
3.6%
|
|
OUR
NETWORK AT PERIOD-END (BOG STANDALONE)
|
|
|
|
|
|
|
Full-scale
branches[8]
|
91
|
88
|
3.4%
|
90
|
1.1%
|
|
Transactional branches
|
98
|
119
|
-17.6%
|
101
|
-3.0%
|
|
Total branches
|
189
|
207
|
-8.7%
|
191
|
-1.0%
|
|
Number of ATMs
|
1,030
|
1,006
|
2.4%
|
1,022
|
0.8%
|
|
Number of BOG Pay
terminals
|
3,153
|
3,145
|
0.3%
|
3,164
|
-0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Strong franchise growth
· Bank
of Georgia had 1.8 million monthly active retail clients as of 31
December 2023, up 10.8% y-o-y and up 4.0% q-o-q. Significant
growth was recorded in Premium Banking - 38.6% y-o-y and 7.5%
q-o-q. In December 2023, the number of active SOLO clients was 125
thousand (90 thousand in December 2022), and the share of Premium
Banking active clients in total Retail Banking active clients stood
at 7.0% as of 31 December 2023 vs 5.6% as of 31 December 2022 and
6.8% as of 30 September 2023.
· Monthly active legal entities, that is business clients, were
up 20.2% y-o-y and up 6.5% q-o-q to 98 thousand entities. The
growth was predominantly driven by small businesses.
· Monthly active digital users among retail clients (Digital
MAU) increased by 21.0% y-o-y and by 7.5% q-o-q to 1.4 million
users as of 31 December 2023. The share of Digital MAU in monthly
active retail customers increased to 75.0% as of 31 December 2023, up from 68.7%
as of 31 December 2022 and 72.6% as of 30 September 2023,
highlighting the extensive adoption of our market-leading financial
superapp and internet banking platform.
Financial superapp and other digital
channels
· Bank
of Georgia is successfully developing its retail financial superapp
to tailor product offerings and user experience to customer needs.
In October 2023, the Bank launched trivia-style gamification in the
app, engaging users in different activities, including those
increasing awareness of the Bank's financial products and services.
By answering questions users accumulated coins during the game and
redeemed these coins for vouchers at partner merchants. The main
goal of this game was to increase engagement within the app,
increase financial education, and show a myriad of benefits of
using the app. More than 500,000 users were engaged in the
game.
· The
share of products sold through digital channels stood at 70.3% in
4Q23, compared with 45.2% in 4Q22 and 47.1% in 3Q23. The
significant increase in digital sales was partly boosted by the
gamification in our financial superapp. We expect the digital
product sales to normalise following the end of gamification, but
continue to increase from a higher baseline going
forward.
· Since
the launch of sCoolApp -
the first financial mobile application for school students in
Georgia - in 2022, the Bank has deepened its relationships with the
youth segment. As at 31 December 2023, 90 thousand school students
were monthly active users of sCoolApp.
· Considering the increasing pace of digitalisation as well as
the growing share of transactional activity happening outside of
branches, Bank of Georgia's Retail Banking strategy entails a
gradual transformation of transactional branches into full-scale
branches where customers will be offered a full spectrum of banking
products and advice. This transformation will result in the
reduction of transactional branches.
Payments
· Bank
of Georgia's market share in acquiring by volume stood at 54.9% in
December 2023 vs 51.3% in December 2022 and 55.2% in September
2023. The volume of payment transactions executed through BOG's
in-store and online terminals was up 38.2% y-o-y and up 10.1% q-o-q
in the fourth quarter of 2023 to GEL 4.5bn. In FY23, it was up
46.5% y-o-y to GEL 15.0 billion.
· Bank
of Georgia's cards were used for payments at least once by more
than 1.2 million individuals in December 2023 (up 20.1% y-o-y and
up 7.6% q-o-q) - important progress towards a more cashless economy
in Georgia.
Customer satisfaction
· Net
Promoter Score (NPS) remained flat in the fourth quarter, standing
at a high level of 59 (58 in 4Q22 and 59 in 3Q23).
Update on management team
· Zurab
Masurashvili, Head of SME Banking since May 2019, will move to
International Business direction with effect from 1 April 2024, and
Tornike Kuprashvili will take on the role of Head of SME Banking,
directly reporting to the CEO, with effect from the same date.
Tornike joined Bank of Georgia in 2014 as a Principal Corporate
Banker and during his 10-year career with the Bank, he has advanced
through a number of roles in Corporate Banking. He held various
senior roles, including Head of Corporate Rehabilitation and Head
of Corporate Banking Department, directly reporting to Deputy CEO
during 2020-2024. Prior to joining Bank of Georgia, Tornike worked
at KPMG Tbilisi office for 3 years as an Audit assistant. Tornike
holds a bachelor's degree in business administration from Caucasus
School of Business.
Financial Review
Due to the settlement of a legacy claim, the fair value
revaluation of the receivable resulted in a one-off other income of
GEL 1.5 million posted in 4Q23 and one-off other income of GEL 22.6
for FY23. Net other income has been adjusted for these one-offs.
Due to the settlement of the same legacy claim, 4Q22 and FY22 net
other income was adjusted for a one-off GEL 391.1 million. The
entire legacy claim amount has already been settled. 4Q22 and FY22
income tax expense was adjusted for a one-off GEL 79.3 income tax
expense due to an amendment to the corporate taxation model in
Georgia. As a result, ROAA and ROAE were adjusted for both one-off
other income and one-off income tax expense where applicable and
Cost:income ratios were adjusted for one-off other income where
applicable. Comparisons given in text are with adjusted figures of
respective periods. You can see the unadjusted P&L on page 18
and the unadjusted ratios on page 19.
GEL
thousands, unless otherwise noted
|
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
OPERATING INCOME
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
744,806
|
607,652
|
22.6%
|
706,871
|
5.4%
|
|
2,748,261
|
2,256,881
|
21.8%
|
Interest expense
|
|
(317,145)
|
(273,007)
|
16.2%
|
(286,895)
|
10.5%
|
|
(1,132,815)
|
(1,074,546)
|
5.4%
|
Net
interest income
|
|
427,661
|
334,645
|
27.8%
|
419,976
|
1.8%
|
|
1,615,446
|
1,182,335
|
36.6%
|
Fee and commission
income
|
|
185,957
|
170,458
|
9.1%
|
168,108
|
10.6%
|
|
707,765
|
559,465
|
26.5%
|
Fee and commission
expense
|
|
(71,891)
|
(72,526)
|
-0.9%
|
(49,159)
|
46.2%
|
|
(273,283)
|
(241,974)
|
12.9%
|
Net
fee and commission income
|
|
114,066
|
97,932
|
16.5%
|
118,949
|
-4.1%
|
|
434,482
|
317,491
|
36.8%
|
Net foreign currency gain
|
|
97,251
|
125,395
|
-22.4%
|
97,790
|
-0.6%
|
|
365,711
|
466,094
|
-21.5%
|
Net other income
|
|
18,260
|
26,930
|
-32.2%
|
5,738
|
218.2%
|
|
114,735
|
36,092
|
217.9%
|
Operating income
|
|
657,238
|
584,902
|
12.4%
|
642,453
|
2.3%
|
|
2,530,374
|
2,002,012
|
26.4%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
|
6.3%
|
5.7%
|
|
6.6%
|
|
|
6.5%
|
5.4%
|
|
Average interest-earning
assets
|
|
26,913,230
|
23,154,159
|
16.2%
|
25,307,677
|
6.3%
|
|
24,967,791
|
21,765,305
|
14.7%
|
Average interest-bearing
liabilities
|
|
25,922,521
|
23,547,485
|
10.1%
|
24,147,396
|
7.4%
|
|
24,008,840
|
21,865,374
|
9.8%
|
Average net loans and finance lease
receivables
|
|
19,670,343
|
16,420,526
|
19.8%
|
18,636,788
|
5.5%
|
|
18,193,535
|
16,213,098
|
12.2%
|
Average net loans and finance lease
receivables, GEL
|
|
10,521,576
|
8,681,922
|
21.2%
|
9,965,205
|
5.6%
|
|
9,698,415
|
8,009,664
|
21.1%
|
Average net loans and finance lease
receivables, FC
|
|
9,148,767
|
7,738,604
|
18.2%
|
8,671,583
|
5.5%
|
|
8,495,120
|
8,203,434
|
3.6%
|
Average client deposits and
notes
|
|
21,295,147
|
17,785,715
|
19.7%
|
20,707,605
|
2.8%
|
|
19,813,930
|
15,876,171
|
24.8%
|
Average client deposits and notes,
GEL
|
|
9,564,520
|
6,627,550
|
44.3%
|
9,388,326
|
1.9%
|
|
8,554,724
|
6,172,866
|
38.6%
|
Average client deposits and notes,
FC
|
|
11,730,627
|
11,158,165
|
5.1%
|
11,319,279
|
3.6%
|
|
11,259,206
|
9,703,305
|
16.0%
|
Average liquid assets
|
|
10,147,183
|
9,871,678
|
2.8%
|
9,251,171
|
9.7%
|
|
9,474,612
|
8,178,417
|
15.8%
|
Average liquid assets,
GEL
|
|
3,992,655
|
3,395,553
|
17.6%
|
3,400,897
|
17.4%
|
|
3,419,120
|
3,305,624
|
3.4%
|
Average liquid assets, FC
|
|
6,154,528
|
6,476,125
|
-5.0%
|
5,850,274
|
5.2%
|
|
6,055,492
|
4,872,793
|
24.3%
|
Liquid assets yield
|
|
5.0%
|
4.2%
|
|
4.7%
|
|
|
4.7%
|
4.3%
|
|
Liquid assets yield, GEL
|
|
8.1%
|
8.7%
|
|
8.4%
|
|
|
8.4%
|
8.9%
|
|
Liquid assets yield, FC
|
|
3.1%
|
1.8%
|
|
2.5%
|
|
|
2.6%
|
1.0%
|
|
Loan yield
|
|
12.4%
|
12.0%
|
|
12.6%
|
|
|
12.5%
|
11.5%
|
|
Loan yield, GEL
|
|
15.3%
|
15.7%
|
|
15.6%
|
|
|
15.6%
|
15.9%
|
|
Loan yield, FC
|
|
8.9%
|
7.7%
|
|
9.1%
|
|
|
8.9%
|
7.2%
|
|
Cost of funds
|
|
4.9%
|
4.6%
|
|
4.7%
|
|
|
4.7%
|
4.9%
|
|
Cost of funds, GEL
|
|
8.4%
|
9.1%
|
|
8.7%
|
|
|
8.8%
|
9.4%
|
|
Cost of funds, FC
|
|
2.0%
|
1.5%
|
|
1.7%
|
|
|
1.7%
|
1.8%
|
|
Cost of client deposits and notes
|
|
4.2%
|
3.4%
|
|
4.2%
|
|
|
4.0%
|
3.6%
|
|
Cost of client deposits and notes, GEL
|
|
8.3%
|
8.2%
|
|
8.4%
|
|
|
8.4%
|
8.3%
|
|
Cost of client deposits and notes, FC
|
|
0.9%
|
0.5%
|
|
0.7%
|
|
|
0.7%
|
0.6%
|
|
Cost:income ratio
|
|
34.3%
|
31.0%
|
|
28.8%
|
|
|
29.8%
|
32.0%
|
|
Net
interest
income
· Interest income
in 4Q23 was up 22.6% y-o-y and up 5.4% q-o-q to
GEL 744.8m. In FY23, interest income amounted to GEL 2,748.3m, up
21.8% y-o-y. The y-o-y increase in interest income in the periods
presented was mostly attributable to increased loan portfolio
coupled with higher loan yield (up 40 bps y-o-y in 4Q23 and up 100
bps y-o-y in FY23, on the back in increasing rates in foreign
currency). The q-o-q increase was mainly related to loan growth
during the quarter.
· Interest
expense in 4Q23 was up 16.2% y-o-y
and up 10.5% q-o-q to GEL 317.1m. In FY23, interest expense
amounted to GEL 1,132.8m, up 5.4% y-o-y. The y-o-y increase in
interest expense in 4Q23 was driven by increased deposit portfolio
coupled with higher cost of deposits (up 80 bps y-o-y), partly
offset by reduced interest expense on amounts owed to credit
institutions. On a q-o-q basis, the
interest expense was mainly driven by an increased balance of the
amounts owed to credit institutions accumulated during the quarter
for liquidity management purposes. For the full year, the main
driver of increased interest expense was a significant increase in
deposit portfolio coupled with a 40-bps increase in cost of
deposits, partly offset by reduced interest expense on amounts owed
to credit institutions.
· Net interest
margin was 6.3% in 4Q23 (up 60 bps
y-o-y and down 30 bps q-o-q). NIM in FY23 stood at 6.5% (up 110 bps
y-o-y). The expected q-o-q decrease in NIM was driven by a
combination of lower loan yield, on the back of decreased GEL
policy rate and excepted decreases of policy rates by FED and ECB,
and a more normalised higher cost of funds following last year's
very strong deposit inflows.
Net
non-interest income
·
Net fee and
commission income was GEL 114.1m in
4Q23 (up 16.5% y-o-y and down 4.1% q-o-q). The y-o-y increase was
mainly driven by settlement operations, with strong growth also
posted on guarantees and letters of credit and currency conversion
operations. The q-o-q decrease was related to the elevated base of
the previous quarter as the Group reported a one-off adjustment
with a positive net effect of GEL 25.0 million in 3Q23.
If we exclude the net positive adjustment, the
q-o-q growth of net fee and commission would have been 21.4%. In
FY23, net fee and commission income amounted to GEL 434.5m, up
36.8% y-o-y, mainly due to settlement operations and advisory
services.
· Net foreign currency (FX)
gain has broadly normalised,
following last year's higher activity levels, and amounted to GEL
97.3m in 4Q23 (down 22.4% y-o-y and down 0.6% q-o-q). In FY23, net
foreign currency gain amounted to GEL 365.7m (down 21.5%
y-o-y).
· Net other
income (adjusted for a one-off GEL
1.5m other income) amounted to GEL 18.3m in
4Q23 (down 32.2% y-o-y and up 3.2x q-o-q). The y-o-y decrease was
due to higher income from the revaluation of investment property
posted in 4Q22, and the q-o-q increase was mainly driven by higher
net gains on the sale of repossessed assets. In FY23, net other
income (adjusted for a one-off GEL 22.6m other income) was GEL
114.7m, up 3.2x y-o-y, driven by the significant net gains on the
sale of repossessed assets booked in the second and the fourth
quarters of 2023.
Overall, the Group generated
operating income (adjusted for
one-off other income) of GEL 657.2m in 4Q23 (up 12.4% y-o-y
and up 2.3% q-o-q). The y-o-y increase in 4Q23 was mainly driven by
strong net interest income generation and increased net fee and
commission income, partly offset by lower net foreign currency gain
and lower net other income. Compared with 3Q23, the fourth quarter
was relatively subdued in all major revenue lines, with growth
reported in net interest income and net other income. In FY23,
operating income (adjusted for
one-off other income) amounted to GEL 2,530.4m, up 26.4%
y-o-y, driven by strong income generation across core revenue
lines, partly offset by lower net foreign currency gains reflecting
a normalising trend.
GEL
thousands
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
OPERATING EXPENSES, COST OF RISK, PROFIT
|
|
|
|
|
|
|
|
|
|
Salaries and other employee
benefits
|
(113,944)
|
(93,698)
|
21.6%
|
(106,739)
|
6.8%
|
|
(419,454)
|
(362,019)
|
15.9%
|
Administrative expenses
|
(74,428)
|
(54,931)
|
35.5%
|
(46,081)
|
61.5%
|
|
(205,368)
|
(164,450)
|
24.9%
|
Depreciation, amortisation and
impairment
|
(35,131)
|
(31,717)
|
10.8%
|
(31,247)
|
12.4%
|
|
(124,723)
|
(111,089)
|
12.3%
|
Other operating
expenses
|
(1,702)
|
(716)
|
137.7%
|
(1,247)
|
36.5%
|
|
(4,508)
|
(3,628)
|
24.3%
|
Operating expenses
|
(225,205)
|
(181,062)
|
24.4%
|
(185,314)
|
21.5%
|
|
(754,053)
|
(641,186)
|
17.6%
|
Profit from associates
|
254
|
128
|
98.4%
|
302
|
-15.9%
|
|
1,456
|
754
|
93.1%
|
Operating income before cost of risk
|
432,287
|
403,968
|
7.0%
|
457,441
|
-5.5%
|
|
1,777,777
|
1,361,580
|
30.6%
|
Expected credit loss on loans to
customers
|
(18,546)
|
(37,535)
|
-50.6%
|
(27,762)
|
-33.2%
|
|
(124,298)
|
(128,678)
|
-3.4%
|
Expected credit loss on finance lease
receivables
|
(1,513)
|
472
|
NMF
|
(1,437)
|
5.3%
|
|
(2,762)
|
(3,208)
|
-13.9%
|
Other expected credit loss and
impairment charge on other assets and provisions
|
(7,751)
|
(15,612)
|
-50.4%
|
(6,606)
|
17.3%
|
|
(17,004)
|
12,818
|
NMF
|
Cost
of risk
|
(27,810)
|
(52,675)
|
-47.2%
|
(35,805)
|
-22.3%
|
|
(144,064)
|
(119,068)
|
21.0%
|
Net
operating income before non-recurring items
|
404,477
|
351,293
|
15.1%
|
421,636
|
-4.1%
|
|
1,633,713
|
1,242,512
|
31.5%
|
Net non-recurring
items
|
-
|
329
|
-100.0%
|
58
|
-100.0%
|
|
-
|
1,038
|
-100.0%
|
Profit before income tax expense and one-off
costs
|
404,477
|
351,622
|
15.0%
|
421,694
|
-4.1%
|
|
1,633,713
|
1,243,550
|
31.4%
|
Income tax expense
|
(75,891)
|
(25,723)
|
195.0%
|
(64,330)
|
18.0%
|
|
(258,971)
|
(111,376)
|
132.5%
|
Profit adjusted for one-off items
|
328,586
|
325,899
|
0.8%
|
357,364
|
-8.1%
|
|
1,374,742
|
1,132,174
|
21.4%
|
One-off in other income
|
1,524
|
391,100
|
-99.6%
|
-
|
-
|
|
22,585
|
391,100
|
-94.2%
|
One-off income tax expense
|
-
|
(79,275)
|
-100.0%
|
-
|
-
|
|
-
|
(79,275)
|
-100.0%
|
Profit
|
330,110
|
637,724
|
-48.2%
|
357,364
|
-7.6%
|
|
1,397,327
|
1,443,999
|
-3.2%
|
Operating expenses and efficiency
· Operating expenses amounted to GEL 225.2m in 4Q23 (up 24.4%
y-o-y and up 21.5% q-o-q). In FY23, operating expenses amounted to
GEL 754.1m (up 17.6% y-o-y). The rise in operating expenses in 4Q23
was primarily related to overall business growth and ongoing
investments in strategic areas. Additionally, the y-o-y and the
q-o-q increase in administrative expenses was partly attributable
to the transaction costs incurred in relation to the acquisition of
Ameriabank as well as the consulting projects in IT and several
other business areas (totalling GEL 10.5 million).
· The Group's cost to income ratio was
34.3% in 4Q23 (31.0% in 4Q22 and 28.8% in 3Q23). For the full year
of 2023, the Group delivered positive operating leverage, with the
cost to income ratio at 29.8% vs 32.0% for the full year of
2022.
Cost of risk
The cost of credit risk ratio was
0.4% in 4Q23 (0.9% in 4Q22 and 0.6% in 3Q23). The expected credit
loss charge on loans and finance lease receivables posted during
the fourth quarter amounted to GEL 20.1m, driven by the Corporate
and Investment Banking and the SME Banking segments, partly offset
by better performance in the Retail Banking segment. The y-o-y and
the q-o-q decrease in cost of credit risk ratio in 4Q23 was driven
by improved loan portfolio performance in Retail Banking. The
expected credit loss charge on loans and finance lease receivables
posted for the full year of 2023 amounted to GEL 127.1m,
translating into the cost of credit risk ratio of 0.7% in FY23
(0.8% in FY22).
Profitability
· The
Group's profit (adjusted for a one-off) was GEL 328.6m in 4Q23 (up
0.8% y-o-y and down 8.1% q-o-q). For FY23, profit (adjusted for a
one-off) was GEL 1,374.7m (up 21.4% y-o-y).
· Return
on average equity (adjusted for a one-off) was 26.7% in 4Q23 (33.7%
in 4Q22 and 30.7% in 3Q23). For FY23, ROAE (adjusted for a one-off)
was 29.9% (32.4% in FY22).
GEL
thousands
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
Liquid assets
|
9,984,238
|
10,367,600
|
-3.7%
|
10,258,057
|
-2.7%
|
Liquid assets, GEL
|
4,113,597
|
3,461,218
|
18.8%
|
3,879,223
|
6.0%
|
Liquid assets, FC
|
5,870,641
|
6,906,382
|
-15.0%
|
6,378,834
|
-8.0%
|
Net loans and finance lease
receivables
|
20,232,721
|
16,861,706
|
20.0%
|
19,010,599
|
6.4%
|
Net loans and finance lease
receivables, GEL
|
10,838,243
|
8,854,286
|
22.4%
|
10,225,451
|
6.0%
|
Net loans and finance lease
receivables, FC
|
9,394,478
|
8,007,420
|
17.3%
|
8,785,148
|
6.9%
|
Client deposits and notes
|
20,522,739
|
18,261,397
|
12.4%
|
21,743,543
|
-5.6%
|
Client deposits and notes,
GEL
|
8,829,820
|
6,692,834
|
31.9%
|
10,027,311
|
-11.9%
|
Client deposits and notes,
FC
|
11,692,919
|
11,568,563
|
1.1%
|
11,716,232
|
-0.2%
|
Amounts owed to credit
institutions
|
5,156,009
|
5,266,653
|
-2.1%
|
3,163,001
|
63.0%
|
Borrowings from DFIs
|
2,124,264
|
1,867,454
|
13.8%
|
2,084,165
|
1.9%
|
Short-term loans from central
banks
|
2,101,653
|
1,715,257
|
22.5%
|
180,099
|
1066.9%
|
Loans and deposits from commercial
banks
|
930,092
|
1,683,942
|
-44.8%
|
898,737
|
3.5%
|
Debt securities issued
|
421,359
|
645,968
|
-34.8%
|
425,560
|
-1.0%
|
|
|
|
|
|
|
Risk-weighted assets (JSC Bank of
Georgia standalone)
|
23,061,905
|
20,279,424
|
13.7%
|
20,881,399
|
10.4%
|
Loan book
· Net
loans and finance lease receivables amounted to GEL 20,232.7m at 31
December 2023, up 20.0% y-o-y and up 6.4% q-o-q in nominal terms.
Growth on a constant-currency basis was 19.6% y-o-y and 5.5% q-o-q
respectively. On a constant currency basis, each segment recorded a
strong growth of loan book: RB - up 16.2% y-o-y and up 5.0% q-o-q;
SME - up 11.4% y-o-y and up 1.9% q-o-q, and CIB - up 30.5% y-o-y
and up 12.6% q-o-q.
· The
share of GEL-denominated loans stood at 53.6% at 31 December 2023
vs 52.5% at 31 December 2022 and 53.8% at 30 September
2023.
· The
NPLs to gross loans ratio reduced to 2.3% as at 31 December 2023
(down 40 bps y-o-y and down 10 bps q-o-q). The NPL ratios in Retail
and SME were broadly stable compared with 30 September 2023. The
NPL ratio in CIB decreased significantly in 4Q23, by 50 bps
compared with prior quarter, and stood at 1.7% as at 31 December
2023.
·
The positive asset quality trend is reflected in
improved Stage 3 loans to gross loans ratio to 2.5% as at 31
December 2023 compared with 3.4% as at 31 December 2022 and 2.8% as
at 30 September 2023.
GEL
thousands, unless otherwise noted
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
NON-PERFORMING LOANS
|
|
|
|
|
|
NPLs (in GEL thousands)
|
467,656
|
471,577
|
-0.8%
|
470,808
|
-0.7%
|
NPLs to gross loans
|
2.3%
|
2.7%
|
|
2.4%
|
|
NPLs to gross loans,
RB
|
1.9%
|
2.1%
|
|
2.0%
|
|
NPLs to gross loans,
SME
|
3.6%
|
3.2%
|
|
3.6%
|
|
NPLs to gross loans,
CIB
|
1.7%
|
3.4%
|
|
2.2%
|
|
NPL coverage ratio
|
69.2%
|
66.4%
|
|
69.1%
|
|
NPL coverage ratio adjusted for the
discounted value of collateral
|
117.6%
|
128.9%
|
|
122.1%
|
|
Stage 3 ratio
|
2.5%
|
3.4%
|
|
2.8%
|
|
Deposits
· Client
deposits and notes amounted to GEL 20,522.7m as at 31 December 2023
(up 12.4% y-o-y and down 5.6% q-o-q). On a constant currency
basis, deposits
increased by 12.2% y-o-y and decreased by 6.3% q-o-q. The q-o-q
decrease was driven by reduced CIB deposits by 29.4% on a constant
currency basis, partially offset by increases in RB by 6.4% and SME
by 6.9% on a constant currency basis. The q-o-q reduction in
corporate deposits reflects a substitution of the Ministry of
Finance deposits, which are treated as corporate deposits, for NBG
deposits, which are categorised as Central Bank loans.
· The
year-on-year growth was driven by both current/demand and time
deposits, while the q-o-q decrease was mainly driven by time
deposits.
·
The share of GEL-denominated deposits in total
deposits stood at 43.0% at 31 December 2023, vs 36.7% at 31
December 2022 and 46.1% at 30 September 2023.
Liquid assets and liquidity position
· Liquid
assets stood at GEL 9,984.2m at 31 December 2023 (down 3.7% y-o-y
and down 2.7% q-o-q). The share of liquid
assets in total assets stood at 31.4% at 31 December 2023 vs 35.9%
at 31 December 2022 and 33.3% at 30 September 2023. The reduction
of the upper limit of the mandatory reserve requirement on
short-term FX liabilities from 25% to 20% by National Bank of
Georgia has resulted in a lower FC liquidity requirement for the
Bank.
· Bank
of Georgia continues to operate with comfortable levels of
liquidity. At 31 December 2023, the Bank's IFRS-based Liquidity
Coverage Ratio (LCR) stood at 125.2% (132.4% at 31 December 2022
and 135.7% at 30 September 2023), above the minimum requirement of
100%[9]. The Net
Stable Funding Ratio also stood at a high level of 130.4% at 31
December 2023 (131.9% at 31 December 2022 and 134.5% at 30
September 2023). The loan-to-deposit ratio increased to 98.6% at 31
December 2023 vs 92.3% at 31 December 2022 and vs 87.4% at 30
September 2023, mainly driven by strong loan book growth.
Capital position
· The
Bank continues to operate with robust capital adequacy levels. At
31 December 2023, the Bank's Basel III CET1, Tier1, and Total
capital ratios stood at 18.2%, 20.0%, and 22.1%, respectively, all
comfortably above the minimum requirements of 14.5%, 16.7%, 19.6%,
respectively. The movement in capital adequacy ratios in 4Q23 and
the potential impact of a 10% devaluation of GEL is as follows:
|
30 Sep 2023
|
4Q23
profit
|
Business
growth
|
Currency
impact
|
Capital
distribution
|
Capital facility
impact
|
31 Dec
2023
|
|
|
|
Buffer above min
requirement
|
Potential
impact
of a 10% GEL
devaluation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CET 1 capital adequacy
|
18.5%
|
1.5%
|
-1.7%
|
-0.2%
|
0.0%
|
0.0%
|
18.2%
|
|
|
|
3.7%
|
-0.9%
|
Tier 1 capital adequacy
|
20.4%
|
1.5%
|
-1.9%
|
-0.2%
|
0.0%
|
0.0%
|
20.0%
|
|
|
|
3.3%
|
-0.9%
|
Total capital adequacy
|
22.6[10]%
|
1.5%
|
-2.1%
|
-0.2%
|
0.0%
|
0.2%
|
22.1%
|
|
|
|
2.5%
|
-0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
·
In March 2023, the Financial Stability Committee
at the NBG set the cycle-neutral countercyclical capital buffer
(base rate) at 1%. Local banks are required to accumulate neutral
countercyclical capital buffer according to the following schedule:
0.25% by March 15, 2024; 0.5% by March 15, 2025; 0.75% by March 15,
2026; 1% by March 15, 2027.
· The
Bank's minimum capital requirements for December 2024 are expected
to be 14.7%, 16.9% and 19.9% for CET 1 ratio, Tier 1 ratio, and
Total capital ratio respectively.
Capital return
· In
August 2023, the Board of Directors declared an interim dividend of
GEL 3.06 per ordinary share in respect of the period ended 30 June
2023 to ordinary shareholders of Bank of Georgia Group PLC. The
interim dividend was paid on 27 October 2023.
·
In August 2023, the Board announced a further
share buyback and cancellation programme ("Buyback Programme")
totalling GEL 62 million. The total number of shares cancelled
since the launch of this Buyback Programme is 205,621 at a cost of
GEL 23.9 million. There are currently 45,709,102 shares in
issue.
· At the
2024 Annual General Meeting, the Board intends to recommend for
shareholder approval a final dividend for 2023 of GEL 4.94 per
share payable in Pounds Sterling at the prevailing rate. This would
make a total dividend in respect of the Group's 2023 earnings of
GEL 8.00 per share. This is a 5% increase
on the dividend for 2022 - a year boosted by significant one-offs
and FX income which broadly normalised in 2023.
·
In addition, the Board has also approved an
extension of the share buyback and cancellation programme by an
additional GEL 100 million.
SEGMENT RESULTS[11]
In the first quarter of 2023 we
split the SME Banking segment from Retail Banking and transferred
the majority of the Micro portfolio, where customers had
business-related needs, to SME Banking. The remaining Micro
portfolio has been transferred to Mass Retail. The SME segment has
grown significantly over the past few years. In addition, the value
proposition for business clients has been different from the value
proposition for retail customers, leading to our decision to change
the segmentation. The comparative figures have been restated
accordingly to reflect this change.
RETAIL BANKING (RB)
4Q22 and FY22 were adjusted for a one-off GEL 33.1 income tax
expense due to an amendment to the corporate taxation model in
Georgia. As a result, ROAE was adjusted for this one-off item.
Comparisons given in text are with adjusted figures of respective
periods. You can see the unadjusted ROAE at the bottom of this
table.
GEL
thousands, unless otherwise noted
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Interest income
|
349,562
|
308,986
|
13.1%
|
334,596
|
4.5%
|
|
1,323,069
|
1,166,265
|
13.4%
|
Interest expense
|
(130,495)
|
(150,994)
|
-13.6%
|
(123,622)
|
5.6%
|
|
(532,439)
|
(601,090)
|
-11.4%
|
Net
interest income
|
219,067
|
157,992
|
38.7%
|
210,974
|
3.8%
|
|
790,630
|
565,175
|
39.9%
|
Net fee and commission
income
|
85,463
|
69,795
|
22.4%
|
91,696
|
-6.8%
|
|
302,555
|
221,495
|
36.6%
|
Net foreign currency gain
|
56,356
|
63,692
|
-11.5%
|
49,407
|
14.1%
|
|
197,379
|
234,425
|
-15.8%
|
Net other income
|
4,391
|
11,690
|
-62.4%
|
2,800
|
56.8%
|
|
18,471
|
18,898
|
-2.3%
|
Operating income
|
365,277
|
303,169
|
20.5%
|
354,877
|
2.9%
|
|
1,309,035
|
1,039,993
|
25.9%
|
Salaries and other employee
benefits
|
(66,036)
|
(50,207)
|
31.5%
|
(59,744)
|
10.5%
|
|
(235,601)
|
(193,730)
|
21.6%
|
Administrative expenses
|
(49,717)
|
(35,248)
|
41.0%
|
(29,558)
|
68.2%
|
|
(133,419)
|
(104,789)
|
27.3%
|
Depreciation, amortisation and
impairment
|
(28,383)
|
(24,433)
|
16.2%
|
(23,950)
|
18.5%
|
|
(97,938)
|
(86,546)
|
13.2%
|
Other operating
expenses
|
(1,151)
|
(394)
|
192.1%
|
(815)
|
41.2%
|
|
(2,897)
|
(2,082)
|
39.1%
|
Operating expenses
|
(145,287)
|
(110,282)
|
31.7%
|
(114,067)
|
27.4%
|
|
(469,855)
|
(387,147)
|
21.4%
|
Profit from associates
|
240
|
115
|
108.7%
|
278
|
-13.7%
|
|
1,391
|
700
|
98.7%
|
Operating income before cost of risk
|
220,230
|
193,002
|
14.1%
|
241,088
|
-8.7%
|
|
840,571
|
653,546
|
28.6%
|
Cost of risk
|
460
|
(40,409)
|
NMF
|
(19,358)
|
NMF
|
|
(83,847)
|
(164,099)
|
-48.9%
|
Profit before non-recurring items and income
tax
|
220,690
|
152,593
|
44.6%
|
221,730
|
-0.5%
|
|
756,724
|
489,447
|
54.6%
|
Net non-recurring
items
|
-
|
502
|
-100.0%
|
-
|
-
|
|
-
|
1,241
|
-100.0%
|
Profit before income tax expense and one-off
items
|
220,690
|
153,095
|
44.2%
|
221,730
|
-0.5%
|
|
756,724
|
490,688
|
54.2%
|
Income tax expense
|
(40,825)
|
(10,912)
|
NMF
|
(34,188)
|
19.4%
|
|
(121,126)
|
(43,342)
|
179.5%
|
Profit adjusted for one-off items
|
179,865
|
142,183
|
26.5%
|
187,542
|
-4.1%
|
|
635,598
|
447,346
|
42.1%
|
One-off income tax expense
|
-
|
(33,147)
|
-100.0%
|
-
|
-
|
|
-
|
(33,147)
|
-100.0%
|
Profit
|
179,865
|
109,036
|
65.0%
|
187,542
|
-4.1%
|
|
635,598
|
414,199
|
53.5%
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Net loans and finance lease
receivables
|
8,502,529
|
7,304,874
|
16.4%
|
8,059,209
|
5.5%
|
|
8,502,529
|
7,304,874
|
16.4%
|
Net loans and finance lease
receivables, GEL
|
6,547,120
|
5,307,288
|
23.4%
|
6,157,169
|
6.3%
|
|
6,547,120
|
5,307,288
|
23.4%
|
Net loans and finance lease
receivables, FC
|
1,955,409
|
1,997,586
|
-2.1%
|
1,902,040
|
2.8%
|
|
1,955,409
|
1,997,586
|
-2.1%
|
Client deposits and notes
|
12,597,938
|
10,923,787
|
15.3%
|
11,728,532
|
7.4%
|
|
12,597,938
|
10,923,787
|
15.3%
|
Client deposits and notes,
GEL
|
4,115,260
|
2,863,880
|
43.7%
|
3,662,528
|
12.4%
|
|
4,115,260
|
2,863,880
|
43.7%
|
Client deposits and notes,
FC
|
8,482,678
|
8,059,907
|
5.2%
|
8,066,004
|
5.2%
|
|
8,482,678
|
8,059,907
|
5.2%
|
of
which:
|
|
|
|
|
|
|
|
|
|
Time deposits
|
6,528,765
|
5,329,886
|
22.5%
|
6,026,685
|
8.3%
|
|
6,528,765
|
5,329,886
|
22.5%
|
Time deposits, GEL
|
2,562,840
|
1,801,029
|
42.3%
|
2,340,575
|
9.5%
|
|
2,562,840
|
1,801,029
|
42.3%
|
Time deposits, FC
|
3,965,925
|
3,528,857
|
12.4%
|
3,686,110
|
7.6%
|
|
3,965,925
|
3,528,857
|
12.4%
|
Current accounts and demand
deposits
|
6,069,173
|
5,593,901
|
8.5%
|
5,701,847
|
6.4%
|
|
6,069,173
|
5,593,901
|
8.5%
|
Current accounts and demand
deposits, GEL
|
1,552,420
|
1,062,851
|
46.1%
|
1,321,953
|
17.4%
|
|
1,552,420
|
1,062,851
|
46.1%
|
Current accounts and demand
deposits, FC
|
4,516,753
|
4,531,050
|
-0.3%
|
4,379,894
|
3.1%
|
|
4,516,753
|
4,531,050
|
-0.3%
|
Assets under management
|
2,486,547
|
1,953,970
|
27.3%
|
2,312,568
|
7.5%
|
|
2,486,547
|
1,953,970
|
27.3%
|
|
|
|
|
|
|
|
|
|
|
KEY
RATIOS
|
|
|
|
|
|
|
|
|
|
ROAE
|
42.2%
|
36.2%
|
|
46.9%
|
|
|
39.6%
|
31.7%
|
|
Net interest margin
|
6.3%
|
5.0%
|
|
6.3%
|
|
|
6.0%
|
5.0%
|
|
Loan yield
|
13.9%
|
13.9%
|
|
14.0%
|
|
|
14.1%
|
13.7%
|
|
Loan yield, GEL
|
16.3%
|
16.7%
|
|
16.5%
|
|
|
16.6%
|
17.0%
|
|
Loan yield, FC
|
5.8%
|
6.3%
|
|
6.2%
|
|
|
6.4%
|
5.9%
|
|
Cost of funds
|
4.4%
|
5.4%
|
|
4.4%
|
|
|
4.8%
|
5.9%
|
|
Cost of client deposits and
notes
|
3.2%
|
2.5%
|
|
3.0%
|
|
|
3.0%
|
2.7%
|
|
Cost of client deposits and notes,
GEL
|
8.1%
|
8.1%
|
|
8.1%
|
|
|
8.2%
|
8.5%
|
|
Cost of client deposits and notes,
FC
|
1.0%
|
0.6%
|
|
0.8%
|
|
|
0.8%
|
0.6%
|
|
Cost of time deposits
|
5.4%
|
4.5%
|
|
5.2%
|
|
|
5.1%
|
4.3%
|
|
Cost of time deposits,
GEL
|
11.1%
|
11.2%
|
|
11.1%
|
|
|
11.2%
|
11.2%
|
|
Cost of time deposits, FC
|
1.8%
|
1.2%
|
|
1.5%
|
|
|
1.5%
|
1.0%
|
|
Cost of current accounts and demand
deposits
|
0.9%
|
0.6%
|
|
0.8%
|
|
|
0.8%
|
0.6%
|
|
Cost of current accounts and demand
deposits, GEL
|
2.8%
|
2.4%
|
|
2.9%
|
|
|
2.8%
|
2.8%
|
|
Cost of current accounts and demand
deposits, FC
|
0.2%
|
0.2%
|
|
0.2%
|
|
|
0.2%
|
0.1%
|
|
Cost:income ratio
|
39.8%
|
36.4%
|
|
32.1%
|
|
|
35.9%
|
37.2%
|
|
Cost of credit risk ratio
|
-0.1%
|
2.0%
|
|
0.8%
|
|
|
1.0%
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
ROAE (unadjusted)
|
42.2%
|
27.7%
|
|
46.9%
|
|
|
39.6%
|
29.3%
|
|
Performance highlights
· In
4Q23, operating income grew 20.5% y-o-y and
2.9% q-o-q, amounting to GEL 365.3m. In FY23, operating income
amounted to GEL 1,309.0m (up 25.9% y-o-y). The y-o-y increase in
all periods presented was driven by growth in both net interest
income and net fee and commission income, partly offset by the
normalisation of net foreign currency gains and lower net other
income.
· In
4Q23, operating expenses were up 31.7% y-o-y and up 27.4% q-o-q and
amounted to GEL 145.3m. In FY23, operating expenses amounted to GEL
469.9m (up 21.4% y-o-y). The y-o-y and the q-o-q increase in
operating expenses was driven by business growth and continuing
investments in strategic areas. In addition, around 20% of the
y-o-y and q-o-q growth in operating expenses was related to the
allocated costs with respect to the acquisition of Ameriabank and
ongoing business consulting projects.
· The
cost of credit risk ratio in 4Q23 stood at -0.1% (down 210 bps
y-o-y and down 90 bps q-o-q), driven by improved performance of the
loan portfolio, especially the consumer loan portfolio. In FY23,
the cost of credit risk ratio was 1.0% (vs 2.2% in
FY22).
· Overall, in 4Q23, RB generated a profit of GEL 179.9m (up
26.5% y-o-y and down 4.1% q-o-q). In FY23, the profit amounted to
GEL 635.6m (up 42.1% y-o-y).
Portfolio highlights
· RB's
net loans and finance lease receivables stood at GEL 8,502.5m (up
16.4% y-o-y and up 5.5% q-o-q) as at 31 December 2023. On a
constant currency basis, the loan book increased by 16.2% y-o-y and
by 5.0% q-o-q. Both the y-o-y and the q-o-q growth was mainly
driven by consumer loans, followed by mortgage
loans.
· 77.0%
of the loan book was denominated in GEL at 31 December 2023 vs
72.7% at 31 December 2022 and 76.4% at 30 September
2023.
· Client
deposits and notes stood at GEL 12,597.9m at 31 December 2023 (up
15.3% y-o-y and up 7.4% q-o-q). On a constant currency basis,
deposits increased by 15.1% y-o-y and by 6.4% q-o-q. The strong
y-o-y increase in deposits was mainly driven by time deposits,
followed by current accounts and demand deposits.
· The
share of GEL-denominated client deposits increased to 32.7% as at
31 December 2023 vs 26.2% at 31 December 2022 and 31.2% at 30
September 2023.
SME
BANKING
4Q22 and FY22 were adjusted for a one-off GEL 12.5 income tax
expense due to an amendment to the corporate taxation model in
Georgia. As a result, ROAE was adjusted for this one-off item.
Comparisons given in text are with adjusted figures of respective
periods. You can see the unadjusted ROAE at the bottom of this
table.
GEL
thousands, unless otherwise noted
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Interest income
|
145,601
|
123,562
|
17.8%
|
143,980
|
1.1%
|
|
553,281
|
467,707
|
18.3%
|
Interest expense
|
(78,853)
|
(69,297)
|
13.8%
|
(78,088)
|
1.0%
|
|
(297,268)
|
(264,914)
|
12.2%
|
Net
interest income
|
66,748
|
54,265
|
23.0%
|
65,892
|
1.3%
|
|
256,013
|
202,793
|
26.2%
|
Net fee and commission
income
|
11,561
|
11,205
|
3.2%
|
10,834
|
6.7%
|
|
40,574
|
34,792
|
16.6%
|
Net foreign currency gain
|
9,170
|
13,550
|
-32.3%
|
10,307
|
-11.0%
|
|
38,357
|
43,183
|
-11.2%
|
Net other income
|
959
|
1,297
|
-26.1%
|
1,157
|
-17.1%
|
|
6,049
|
2,503
|
141.7%
|
Operating income
|
88,438
|
80,317
|
10.1%
|
88,190
|
0.3%
|
|
340,993
|
283,271
|
20.4%
|
Salaries and other employee
benefits
|
(16,455)
|
(14,394)
|
14.3%
|
(15,593)
|
5.5%
|
|
(61,641)
|
(57,800)
|
6.6%
|
Administrative expenses
|
(9,612)
|
(7,292)
|
31.8%
|
(5,787)
|
66.1%
|
|
(25,523)
|
(22,022)
|
15.9%
|
Depreciation, amortisation and
impairment
|
(3,255)
|
(3,698)
|
-12.0%
|
(3,029)
|
7.5%
|
|
(12,206)
|
(13,193)
|
-7.5%
|
Other operating
expenses
|
(136)
|
(87)
|
56.3%
|
(102)
|
33.3%
|
|
(410)
|
(492)
|
-16.7%
|
Operating expenses
|
(29,458)
|
(25,471)
|
15.7%
|
(24,511)
|
20.2%
|
|
(99,780)
|
(93,507)
|
6.7%
|
Profit from associates
|
14
|
13
|
7.7%
|
24
|
-41.7%
|
|
65
|
54
|
20.4%
|
Operating income before cost of risk
|
58,994
|
54,859
|
7.5%
|
63,703
|
-7.4%
|
|
241,278
|
189,818
|
27.1%
|
Cost of risk
|
(6,823)
|
(3,846)
|
77.4%
|
(13,450)
|
-49.3%
|
|
(32,316)
|
(8,603)
|
NMF
|
Profit before income tax expense and one-off
items
|
52,171
|
51,013
|
2.3%
|
50,253
|
3.8%
|
|
208,962
|
181,215
|
15.3%
|
Income tax expense
|
(9,965)
|
(3,438)
|
189.8%
|
(8,043)
|
23.9%
|
|
(34,094)
|
(16,310)
|
109.0%
|
Profit adjusted for one-off costs
|
42,206
|
47,575
|
-11.3%
|
42,210
|
0.0%
|
|
174,868
|
164,905
|
6.0%
|
One-off income tax expense
|
-
|
(12,475)
|
-100.0%
|
-
|
-
|
|
-
|
(12,475)
|
-100.0%
|
Profit
|
42,206
|
35,100
|
20.2%
|
42,210
|
0.0%
|
|
174,868
|
152,430
|
14.7%
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Net loans and finance lease
receivables
|
4,550,840
|
4,064,034
|
12.0%
|
4,422,394
|
2.9%
|
|
4,550,840
|
4,064,034
|
12.0%
|
Net loans and finance lease
receivables, GEL
|
2,570,051
|
2,208,103
|
16.4%
|
2,537,288
|
1.3%
|
|
2,570,051
|
2,208,103
|
16.4%
|
Net loans and finance lease
receivables, FC
|
1,980,789
|
1,855,931
|
6.7%
|
1,885,106
|
5.1%
|
|
1,980,789
|
1,855,931
|
6.7%
|
Client deposits and notes
|
1,876,967
|
1,508,932
|
24.4%
|
1,744,883
|
7.6%
|
|
1,876,967
|
1,508,932
|
24.4%
|
Client deposits and notes,
GEL
|
1,197,070
|
852,922
|
40.3%
|
1,071,511
|
11.7%
|
|
1,197,070
|
852,922
|
40.3%
|
Client deposits and notes,
FC
|
679,897
|
656,010
|
3.6%
|
673,372
|
1.0%
|
|
679,897
|
656,010
|
3.6%
|
of
which:
|
|
|
|
|
|
|
|
|
|
Time deposits
|
84,245
|
65,626
|
28.4%
|
95,154
|
-11.5%
|
|
84,245
|
65,626
|
28.4%
|
Time deposits, GEL
|
61,408
|
41,930
|
46.5%
|
60,648
|
1.3%
|
|
61,408
|
41,930
|
46.5%
|
Time deposits, FC
|
22,837
|
23,696
|
-3.6%
|
34,506
|
-33.8%
|
|
22,837
|
23,696
|
-3.6%
|
Current accounts and demand
deposits
|
1,792,722
|
1,443,306
|
24.2%
|
1,649,729
|
8.7%
|
|
1,792,722
|
1,443,306
|
24.2%
|
Current accounts and demand
deposits, GEL
|
1,135,662
|
810,992
|
40.0%
|
1,010,863
|
12.3%
|
|
1,135,662
|
810,992
|
40.0%
|
Current accounts and demand
deposits, FC
|
657,060
|
632,314
|
3.9%
|
638,866
|
2.8%
|
|
657,060
|
632,314
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
KEY
RATIOS
|
|
|
|
|
|
|
|
|
|
ROAE
|
20.6%
|
25.7%
|
|
21.7%
|
|
|
22.6%
|
24.0%
|
|
Net interest margin
|
4.8%
|
4.4%
|
|
4.9%
|
|
|
4.9%
|
4.3%
|
|
Loan yield
|
11.1%
|
10.5%
|
|
11.4%
|
|
|
11.2%
|
10.0%
|
|
Loan yield, GEL
|
13.6%
|
13.7%
|
|
13.8%
|
|
|
13.8%
|
13.5%
|
|
Loan yield, FC
|
7.8%
|
6.7%
|
|
8.2%
|
|
|
7.9%
|
6.4%
|
|
Cost of funds
|
6.3%
|
6.1%
|
|
6.5%
|
|
|
6.4%
|
6.1%
|
|
Cost of client deposits and
notes
|
1.9%
|
1.0%
|
|
1.9%
|
|
|
1.7%
|
1.0%
|
|
Cost of client deposits and notes,
GEL
|
3.3%
|
2.5%
|
|
3.3%
|
|
|
3.1%
|
2.4%
|
|
Cost of client deposits and notes,
FC
|
-0.4%
|
-1.0%
|
|
-0.4%
|
|
|
-0.4%
|
-0.7%
|
|
Cost of time deposits
|
8.5%
|
7.3%
|
|
7.7%
|
|
|
7.7%
|
6.4%
|
|
Cost of time deposits,
GEL
|
11.4%
|
11.0%
|
|
11.3%
|
|
|
10.8%
|
10.8%
|
|
Cost of time deposits, FC
|
1.2%
|
1.0%
|
|
1.1%
|
|
|
1.2%
|
0.8%
|
|
Cost of current accounts and demand
deposits
|
1.6%
|
0.7%
|
|
1.6%
|
|
|
1.4%
|
0.7%
|
|
Cost of current accounts and demand
deposits, GEL
|
2.9%
|
2.0%
|
|
2.8%
|
|
|
2.7%
|
1.9%
|
|
Cost of current accounts and demand
deposits, FC
|
-0.4%
|
-1.1%
|
|
-0.4%
|
|
|
-0.5%
|
-0.7%
|
|
Cost:income ratio
|
33.3%
|
31.7%
|
|
27.8%
|
|
|
29.3%
|
33.0%
|
|
Cost of credit risk ratio
|
0.6%
|
0.3%
|
|
1.1%
|
|
|
0.7%
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
ROAE (unadjusted)
|
20.6%
|
18.9%
|
|
21.7%
|
|
|
22.6%
|
22.2%
|
|
Performance highlights
· In
4Q23, SME's operating income amounted to GEL 88.4m (up 10.1% y-o-y
and up 0.3% q-o-q). In FY23, operating income was GEL 341.0m (up
20.4% y-o-y). The y-o-y increases were mainly driven by strong net
interest income generation, partly offset by the reduced net
foreign currency gain.
· Operating expenses were up 15.7% y-o-y and up 20.2% q-o-q in
4Q23 to GEL 29.5m. The y-o-y increase of operating expenses in the
fourth quarter of 2023 was driven by both salaries and
administrative expenses, with around 38% of the increase in total
operating expenses due to the allocated costs related to the
acquisition of Ameriabank and ongoing business consulting projects.
Compared with the prior quarter, the growth was mainly driven by
increased administrative expenses, affected by the project costs
described above. Operating expenses in FY23 were GEL 99.8m, up 6.7%
y-o-y.
· The
cost of credit risk ratio stood at 0.6% in 4Q23 (0.3% in 4Q22 and
1.1% in 3Q23). In FY23, the cost of credit risk ratio was 0.7%
(0.1% in FY22).
·
Overall, in 4Q23, SME generated a profit of GEL
42.2m (down 11.3% y-o-y and flat q-o-q). In FY23, profit amounted
to GEL 174.9m (up 6.0% y-o-y).
Portfolio highlights
· Net
loans and finance receivables stood at GEL 4,550.8m at 31 December
2023, up 12.0% y-o-y and up 2.9% q-o-q. On a constant currency
basis, the loan book increased by 11.4% y-o-y and by 1.9% q-o-q in
4Q23.
· GEL-denominated loans remained broadly stable at 56.5% of
total SME loans at 31 December 2023, compared with 54.3% at 31
December 2022 and 57.4% at 30 September 2023.
· Client
deposits and notes amounted to GEL 1,877.0m at 31 December 2023, up
24.4% y-o-y and up 7.6% q-o-q. On a constant currency basis,
deposits increased by 24.1% y-o-y and by 6.9% q-o-q in
4Q23.
· GEL-denominated deposits represented 63.8% of total SME
deposits at 31 December 2023, compared with 56.5% at 31 December
2022 and 61.4% at 30 September 2023.
CORPORATE AND INVESTMENT BANKING (CIB)
Due to the settlement of a legacy claim, the fair value
revaluation of the receivable resulted in a one-off other income of
GEL 1.5 million posted in 4Q23 and one-off other income of GEL 22.6
million posted in FY23. Net other income was adjusted for these
one-offs. Due to the settlement of the same legacy claim, 4Q22 and
FY22 net other income was adjusted for a one-off GEL 391.1 million.
4Q22 and FY22 income tax expense was adjusted for a one-off GEL
33.7 income tax expense due to an amendment to the corporate
taxation model in Georgia. As a result, ROAE was adjusted for
one-off other income and one-off tax expense where applicable and
Cost:income ratios were adjusted for one-off other income where
applicable. Comparisons given in text are with adjusted figures of
respective periods. You can see the unadjusted ROAE and Cost:income
ratios at the bottom of this table.
GEL
thousands, unless otherwise noted
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Interest income
|
231,354
|
160,388
|
44.2%
|
209,961
|
10.2%
|
|
803,408
|
554,135
|
45.0%
|
Interest expense
|
(102,534)
|
(46,740)
|
119.4%
|
(80,637)
|
27.2%
|
|
(283,171)
|
(177,364)
|
59.7%
|
Net
interest income
|
128,820
|
113,648
|
13.3%
|
129,324
|
-0.4%
|
|
520,237
|
376,771
|
38.1%
|
Net fee and commission
income
|
16,009
|
14,157
|
13.1%
|
13,756
|
16.4%
|
|
83,718
|
49,543
|
69.0%
|
Net foreign currency gain
|
21,148
|
33,612
|
-37.1%
|
28,367
|
-25.4%
|
|
88,369
|
123,993
|
-28.7%
|
Net other income
|
11,872
|
11,503
|
3.2%
|
1,698
|
599.2%
|
|
89,035
|
14,299
|
522.7%
|
Operating income
|
177,849
|
172,920
|
2.9%
|
173,145
|
2.7%
|
|
781,359
|
564,606
|
38.4%
|
Salaries and other employee
benefits
|
(23,174)
|
(20,388)
|
13.7%
|
(22,245)
|
4.2%
|
|
(86,237)
|
(80,978)
|
6.5%
|
Administrative expenses
|
(11,291)
|
(7,232)
|
56.1%
|
(6,005)
|
88.0%
|
|
(27,217)
|
(18,079)
|
50.5%
|
Depreciation, amortisation and
impairment
|
(1,554)
|
(1,685)
|
-7.8%
|
(1,085)
|
43.2%
|
|
(5,319)
|
(5,292)
|
0.5%
|
Other operating
expenses
|
(264)
|
(437)
|
-39.6%
|
(100)
|
164.0%
|
|
(624)
|
(1,283)
|
-51.4%
|
Operating expenses
|
(36,283)
|
(29,742)
|
22.0%
|
(29,435)
|
23.3%
|
|
(119,397)
|
(105,632)
|
13.0%
|
Profit from associates
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
Operating income before cost of risk
|
141,566
|
143,178
|
-1.1%
|
143,710
|
-1.5%
|
|
661,962
|
458,974
|
44.2%
|
Cost of risk
|
(18,092)
|
(5,210)
|
NMF
|
(5,875)
|
NMF
|
|
(30,549)
|
79,461
|
NMF
|
Profit before non-recurring items and income
tax
|
123,474
|
137,968
|
-10.5%
|
137,835
|
-10.4%
|
|
631,413
|
538,435
|
17.3%
|
Net non-recurring
items
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
Profit before income tax expense and one-off
items
|
123,474
|
137,968
|
-10.5%
|
137,835
|
-10.4%
|
|
631,413
|
538,435
|
17.3%
|
Income tax expense
|
(23,107)
|
(9,145)
|
152.7%
|
(20,217)
|
14.3%
|
|
(95,274)
|
(44,040)
|
116.3%
|
Profit adjusted for one-off items
|
100,367
|
128,823
|
-22.1%
|
117,618
|
-14.7%
|
|
536,139
|
494,395
|
8.4%
|
One-off in other income
|
1,524
|
391,100
|
-99.6%
|
-
|
-
|
|
22,585
|
391,100
|
-94.2%
|
One-off income tax
|
-
|
(33,653)
|
-100.0%
|
-
|
-
|
|
-
|
(33,653)
|
-100.0%
|
Profit
|
101,891
|
486,270
|
-79.0%
|
117,618
|
-13.4%
|
|
558,724
|
851,842
|
-34.4%
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Net loans and finance lease
receivables
|
6,463,690
|
4,926,264
|
31.2%
|
5,664,297
|
14.1%
|
|
6,463,690
|
4,926,264
|
31.2%
|
Net loans and finance lease
receivables, GEL
|
1,714,253
|
1,321,797
|
29.7%
|
1,518,653
|
12.9%
|
|
1,714,253
|
1,321,797
|
29.7%
|
Net loans and finance lease
receivables, FC
|
4,749,437
|
3,604,467
|
31.8%
|
4,145,644
|
14.6%
|
|
4,749,437
|
3,604,467
|
31.8%
|
Client deposits and notes
|
5,256,172
|
4,824,646
|
8.9%
|
7,419,153
|
-29.2%
|
|
5,256,172
|
4,824,646
|
8.9%
|
Client deposits and notes,
GEL
|
3,734,682
|
3,021,179
|
23.6%
|
5,664,043
|
-34.1%
|
|
3,734,682
|
3,021,179
|
23.6%
|
Client deposits and notes,
FC
|
1,521,490
|
1,803,467
|
-15.6%
|
1,755,110
|
-13.3%
|
|
1,521,490
|
1,803,467
|
-15.6%
|
of
which:
|
|
|
|
|
|
|
|
|
|
Time deposits
|
1,416,400
|
1,520,701
|
-6.9%
|
2,902,554
|
-51.2%
|
|
1,416,400
|
1,520,701
|
-6.9%
|
Time deposits, GEL
|
1,295,713
|
1,412,130
|
-8.2%
|
2,774,497
|
-53.3%
|
|
1,295,713
|
1,412,130
|
-8.2%
|
Time deposits, FC
|
120,687
|
108,571
|
11.2%
|
128,057
|
-5.8%
|
|
120,687
|
108,571
|
11.2%
|
Current accounts and demand
deposits
|
3,839,772
|
3,303,945
|
16.2%
|
4,516,599
|
-15.0%
|
|
3,839,772
|
3,303,945
|
16.2%
|
Current accounts and demand
deposits, GEL
|
2,438,969
|
1,609,049
|
51.6%
|
2,889,546
|
-15.6%
|
|
2,438,969
|
1,609,049
|
51.6%
|
Current accounts and demand
deposits, FC
|
1,400,803
|
1,694,896
|
-17.4%
|
1,627,053
|
-13.9%
|
|
1,400,803
|
1,694,896
|
-17.4%
|
Letters of credit and guarantees
(off-balance sheet exposures)
|
1,973,156
|
1,812,231
|
8.9%
|
1,929,058
|
2.3%
|
|
1,973,156
|
1,812,231
|
8.9%
|
Assets under management
|
2,193,090
|
1,480,894
|
48.1%
|
1,927,240
|
13.8%
|
|
2,193,090
|
1,480,894
|
48.1%
|
|
|
|
|
|
|
|
|
|
|
KEY
RATIOS
|
|
|
|
|
|
|
|
|
|
ROAE
|
17.8%
|
36.5%
|
|
22.3%
|
|
|
26.0%
|
39.1%
|
|
Net interest margin
|
5.3%
|
6.3%
|
|
6.1%
|
|
|
6.2%
|
5.6%
|
|
Loan yield
|
11.6%
|
10.2%
|
|
11.8%
|
|
|
11.5%
|
9.3%
|
|
Loan yield, GEL
|
14.3%
|
14.8%
|
|
14.5%
|
|
|
14.7%
|
14.7%
|
|
Loan yield, FC
|
10.7%
|
8.6%
|
|
10.8%
|
|
|
10.3%
|
7.7%
|
|
Cost of funds
|
5.1%
|
2.6%
|
|
4.5%
|
|
|
4.1%
|
2.6%
|
|
Cost of client deposits and
notes
|
7.2%
|
6.2%
|
|
7.3%
|
|
|
7.2%
|
6.2%
|
|
Cost of client deposits and notes,
GEL
|
9.5%
|
9.7%
|
|
9.6%
|
|
|
9.8%
|
9.4%
|
|
Cost of client deposits and notes,
FC
|
0.6%
|
-0.2%
|
|
0.2%
|
|
|
0.3%
|
-0.1%
|
|
Cost of time deposits
|
10.1%
|
11.0%
|
|
9.9%
|
|
|
10.3%
|
10.4%
|
|
Cost of time deposits,
GEL
|
10.5%
|
11.6%
|
|
10.3%
|
|
|
10.7%
|
11.1%
|
|
Cost of time deposits, FC
|
3.1%
|
1.4%
|
|
2.3%
|
|
|
2.2%
|
1.1%
|
|
Cost of current accounts and demand
deposits
|
5.6%
|
3.7%
|
|
5.7%
|
|
|
5.5%
|
3.9%
|
|
Cost of current accounts and demand
deposits, GEL
|
8.6%
|
7.8%
|
|
8.9%
|
|
|
9.0%
|
7.7%
|
|
Cost of current accounts and demand
deposits, FC
|
0.5%
|
-0.3%
|
|
0.1%
|
|
|
0.1%
|
-0.2%
|
|
Cost:income ratio
|
20.4%
|
17.2%
|
|
17.0%
|
|
|
15.3%
|
18.7%
|
|
Cost of credit risk ratio
|
1.0%
|
0.0%
|
|
0.2%
|
|
|
0.4%
|
-1.0%
|
|
Concentration of top ten
clients
|
7.3%
|
5.9%
|
|
5.3%
|
|
|
7.3%
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
ROAE (unadjusted)
|
18.1%
|
138.1%
|
|
22.3%
|
|
|
27.1%
|
67.4%
|
|
Cost:income (unadjusted)
|
20.2%
|
5.3%
|
|
17.0%
|
|
|
14.9%
|
11.1%
|
|
Performance highlights
· In
4Q23, CIB's operating income (adjusted for a one-off GEL 1.5m other
income) was up 2.9% y-o-y and up 2.7% q-o-q to GEL 177.8m. In FY23,
operating income (adjusted for a one-off GEL 22.6m other income)
amounted to GEL 781.4m, up 38.4%, driven by significant growth in
every core revenue line, except for the net foreign currency gain
that broadly normalised in 2023.
· Operating expenses were up 22.0% y-o-y and up 23.3% q-o-q in
4Q23, amounting to GEL 36.3m. Around a third of this growth, both
y-o-y and q-o-q, is attributable to the allocated costs related to
the acquisition of Ameriabank as well as ongoing business
consulting projects. In FY23, operating expenses grew 13.0% y-o-y
to GEL 119.4m.
· In
4Q23, CIB's cost of credit risk ratio was 1.0% (up 100 bps y-o-y
and up 80 bps q-o-q), driven largely by a significant growth of the
loan portfolio during the quarter. In FY23, the cost of credit risk
ratio was 0.4% vs -1.0% in FY22.
· Overall, in 4Q23 CIB posted a profit (adjusted for a one-off
GEL 1.5m net other income) of GEL 100.4m, down 22.1% y-o-y and down
14.7% q-o-q. Profit for the full year of 2023 (adjusted for a
one-off GEL 22.6m net other income) amounted to GEL 536.1m, up 8.4%
y-o-y.
Portfolio highlights
· Net
loans and finance receivables stood at GEL 6,463.7m at 31 December
2023 (up 31.2% y-o-y and up 14.1% q-o-q). On a constant currency
basis, the loan book increased by 30.5% y-o-y and by 12.6% q-o-q in
4Q23.
· GEL-denominated loans represented 26.5% of total CIB loans at
31 December 2023, compared with 26.8% at 31 December 2022 and 26.8%
at 30 September 2023.
· The
concentration of top ten CIB clients was 7.3% of total gross loans
at 31 December 2023 (5.9% at 31 December 2022 and 5.3% at 30
September 2023).
· Client
deposits and notes amounted to GEL 5,256.2m at 31 December 2023 (up
8.9% y-o-y and down 29.2% q-o-q). On a constant currency basis,
deposits increased by 9.0% y-o-y and decreased by 29.4% q-o-q in
4Q23. The q-on-q reduction in corporate
deposits, reflects a substitution of Ministry of Finance deposits,
which are treated as corporate deposits, for NBG deposits which are
categorised as Central Bank loans.
· GEL-denominated deposits stood at 71.1% of total CIB deposits
at 31 December 2023, compared with 62.6% at 31 December 2022 and
76.3% at 30 September 2022.
BELARUSKY NARODNY BANK (BNB)
GEL
thousands, unless otherwise noted
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Net interest income
|
13,001
|
8,721
|
49.1%
|
13,757
|
-5.5%
|
|
48,486
|
37,511
|
29.3%
|
Net fee and commission
income
|
977
|
2,740
|
-64.3%
|
2,728
|
-64.2%
|
|
7,379
|
11,500
|
-35.8%
|
Net foreign currency gain
|
10,577
|
14,541
|
-27.3%
|
9,709
|
8.9%
|
|
41,606
|
64,493
|
-35.5%
|
Net other income
|
1,277
|
2,620
|
-51.3%
|
270
|
NMF
|
|
2,009
|
1,170
|
71.7%
|
Operating income
|
25,832
|
28,622
|
-9.7%
|
26,464
|
-2.4%
|
|
99,480
|
114,674
|
-13.2%
|
Operating expenses
|
(14,335)
|
(15,693)
|
-8.7%
|
(17,524)
|
-18.2%
|
|
(65,514)
|
(55,432)
|
18.2%
|
Operating income before cost of risk
|
11,497
|
12,929
|
-11.1%
|
8,940
|
28.6%
|
|
33,966
|
59,242
|
-42.7%
|
Cost of risk
|
(3,355)
|
(3,210)
|
4.5%
|
2,878
|
NMF
|
|
2,648
|
(25,827)
|
NMF
|
Net non-recurring
items
|
-
|
(173)
|
-100.0%
|
58
|
-100.0%
|
|
-
|
(203)
|
-100.0%
|
Profit before income tax expense
|
8,142
|
9,546
|
-14.7%
|
11,876
|
-31.4%
|
|
36,614
|
33,212
|
10.2%
|
Income tax expense
|
(1,994)
|
(2,228)
|
-10.5%
|
(1,882)
|
6.0%
|
|
(8,477)
|
(7,684)
|
10.3%
|
Profit
|
6,148
|
7,318
|
-16.0%
|
9,994
|
-38.5%
|
|
28,137
|
25,528
|
10.2%
|
GEL
thousands, unless otherwise noted
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
Cash and cash equivalents
|
407,456
|
640,018
|
-36.3%
|
478,219
|
-14.8%
|
Amounts due from credit
institutions
|
18,759
|
74,778
|
-74.9%
|
22,749
|
-17.5%
|
Investment securities
|
70,411
|
60,361
|
16.6%
|
103,970
|
-32.3%
|
Loans to customers and finance lease
receivables
|
716,905
|
538,166
|
33.2%
|
865,569
|
-17.2%
|
Other assets
|
66,636
|
68,043
|
-2.1%
|
85,706
|
-22.3%
|
Total assets
|
1,280,167
|
1,381,366
|
-7.3%
|
1,556,213
|
-17.7%
|
Client deposits and notes
|
1,048,512
|
1,034,124
|
1.4%
|
1,219,291
|
-14.0%
|
Amounts owed to credit
institutions
|
50,852
|
172,389
|
-70.5%
|
111,969
|
-54.6%
|
Debt securities issued
|
6,810
|
2,745
|
148.1%
|
11,271
|
-39.6%
|
Other liabilities
|
25,268
|
20,670
|
22.2%
|
33,600
|
-24.8%
|
Total liabilities
|
1,131,442
|
1,229,928
|
-8.0%
|
1,376,131
|
-17.8%
|
Total equity
|
148,725
|
151,438
|
-1.8%
|
180,082
|
-17.4%
|
Total liabilities and equity
|
1,280,167
|
1,381,366
|
-7.3%
|
1,556,213
|
-17.7%
|
During 2023 BNB continued to be
focused on its core domestic retail and small business
customers.
During a few months of 2023, as a
result of the ongoing Russia-Ukraine war, the NBG's official
exchange rate of GEL versus the Belarusian Ruble (BYN) was not
updated due to inactivity on the source platform. On 3 October
2023, the NBG's official exchange rate of GEL versus the Belarusian
Ruble (BYN) was reinstated, resulting in a 23.3% depreciation of
BYN against GEL. BNB's performance was adversely affected by this change in
exchange rate.
BNB's capital ratios, calculated in
accordance with the National Bank of the Republic of Belarus'
standards, were above the minimum requirements at 31 December 2023
- Tier 1 capital adequacy ratio at 9.9% (minimum requirement of
7.0%) and Total capital adequacy ratio at 13.8% (minimum
requirement of 12.5%).
SELECTED CONSOLIDATED FINANCIAL INFORMATION
GEL
thousands, unless otherwise noted
|
4Q23
|
4Q22
|
Change
y-o-y
|
3Q23
|
Change
q-o-q
|
|
FY23
|
FY22
|
Change
y-o-y
|
INCOME STATEMENT HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Interest income
|
744,806
|
607,652
|
22.6%
|
706,871
|
5.4%
|
|
2,748,261
|
2,256,881
|
21.8%
|
Interest expense
|
(317,145)
|
(273,007)
|
16.2%
|
(286,895)
|
10.5%
|
|
(1,132,815)
|
(1,074,546)
|
5.4%
|
Net
interest income
|
427,661
|
334,645
|
27.8%
|
419,976
|
1.8%
|
|
1,615,446
|
1,182,335
|
36.6%
|
Fee and commission
income
|
185,957
|
170,458
|
9.1%
|
168,108
|
10.6%
|
|
707,765
|
559,465
|
26.5%
|
Fee and commission
expense
|
(71,891)
|
(72,526)
|
-0.9%
|
(49,159)
|
46.2%
|
|
(273,283)
|
(241,974)
|
12.9%
|
Net
fee and commission income
|
114,066
|
97,932
|
16.5%
|
118,949
|
-4.1%
|
|
434,482
|
317,491
|
36.8%
|
Net foreign currency gain
|
97,251
|
125,395
|
-22.4%
|
97,790
|
-0.6%
|
|
365,711
|
466,094
|
-21.5%
|
Net other income without
one-offs
|
18,260
|
26,930
|
-32.2%
|
5,738
|
218.2%
|
|
114,735
|
36,092
|
217.9%
|
One-off other
income
|
1,524
|
391,100
|
-99.6%
|
-
|
-
|
|
22,585
|
391,100
|
-94.2%
|
Net
other income
|
19,784
|
418,030
|
-95.3%
|
5,738
|
244.8%
|
|
137,320
|
427,192
|
-67.9%
|
Operating income
|
658,762
|
976,002
|
-32.5%
|
642,453
|
2.5%
|
|
2,552,959
|
2,393,112
|
6.7%
|
Salaries and other employee
benefits
|
(113,944)
|
(93,698)
|
21.6%
|
(106,739)
|
6.8%
|
|
(419,454)
|
(362,019)
|
15.9%
|
Administrative expenses
|
(74,428)
|
(54,931)
|
35.5%
|
(46,081)
|
61.5%
|
|
(205,368)
|
(164,450)
|
24.9%
|
Depreciation, amortisation and
impairment
|
(35,131)
|
(31,717)
|
10.8%
|
(31,247)
|
12.4%
|
|
(124,723)
|
(111,089)
|
12.3%
|
Other operating
expenses
|
(1,702)
|
(716)
|
137.7%
|
(1,247)
|
36.5%
|
|
(4,508)
|
(3,628)
|
24.3%
|
Operating expenses
|
(225,205)
|
(181,062)
|
24.4%
|
(185,314)
|
21.5%
|
|
(754,053)
|
(641,186)
|
17.6%
|
Profit from associates
|
254
|
128
|
98.4%
|
302
|
-15.9%
|
|
1,456
|
754
|
93.1%
|
Operating income before cost of risk
|
433,811
|
795,068
|
-45.4%
|
457,441
|
-5.2%
|
|
1,800,362
|
1,752,680
|
2.7%
|
Expected credit loss on loans to
customers
|
(18,546)
|
(37,535)
|
-50.6%
|
(27,762)
|
-33.2%
|
|
(124,298)
|
(128,678)
|
-3.4%
|
Expected credit loss on finance lease
receivables
|
(1,513)
|
472
|
NMF
|
(1,437)
|
5.3%
|
|
(2,762)
|
(3,208)
|
-13.9%
|
Other expected credit loss and
impairment charge on other assets and provisions
|
(7,751)
|
(15,612)
|
-50.4%
|
(6,606)
|
17.3%
|
|
(17,004)
|
12,818
|
NMF
|
Cost
of risk
|
(27,810)
|
(52,675)
|
-47.2%
|
(35,805)
|
-22.3%
|
|
(144,064)
|
(119,068)
|
21.0%
|
Net
operating income before non-recurring items
|
406,001
|
742,393
|
-45.3%
|
421,636
|
-3.7%
|
|
1,656,298
|
1,633,612
|
1.4%
|
Net non-recurring
items
|
-
|
329
|
-100.0%
|
58
|
-100.0%
|
|
-
|
1,038
|
-100.0%
|
Profit before income tax expense
|
406,001
|
742,722
|
-45.3%
|
421,694
|
-3.7%
|
|
1,656,298
|
1,634,650
|
1.3%
|
Income tax expense (excluding one-off
income tax expense)
|
(75,891)
|
(25,723)
|
195.0%
|
(64,330)
|
18.0%
|
|
(258,971)
|
(111,376)
|
132.5%
|
One-off income tax expense
|
-
|
(79,275)
|
-100.0%
|
-
|
-
|
|
-
|
(79,275)
|
-100.0%
|
Income tax expense
|
(75,891)
|
(104,998)
|
-27.7%
|
(64,330)
|
18.0%
|
|
(258,971)
|
(190,651)
|
35.8%
|
Profit
|
330,110
|
637,724
|
-48.2%
|
357,364
|
-7.6%
|
|
1,397,327
|
1,443,999
|
-3.2%
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
-
shareholders of the Group
|
328,623
|
636,607
|
-48.4%
|
355,803
|
-7.6%
|
|
1,391,277
|
1,439,507
|
-3.4%
|
-
non-controlling interests
|
1,487
|
1,117
|
33.1%
|
1,561
|
-4.7%
|
|
6,050
|
4,492
|
34.7%
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
7.53
|
14.10
|
-46.6%
|
8.12
|
-7.3%
|
|
31.30
|
30.99
|
1.0%
|
Diluted earnings per share
|
7.31
|
13.61
|
-46.3%
|
7.92
|
-7.7%
|
|
30.43
|
30.33
|
0.3%
|
GEL
thousands, unless otherwise noted
|
Dec-23
|
Dec-22
|
Change
y-o-y
|
Sep-23
|
Change
q-o-q
|
BALANCE SHEET HIGHLIGHTS
|
|
|
|
|
|
Cash and cash equivalents
|
3,101,824
|
3,584,843
|
-13.5%
|
2,959,832
|
4.8%
|
Amounts due from credit
institutions
|
1,752,657
|
2,433,028
|
-28.0%
|
1,878,849
|
-6.7%
|
Investment securities
|
5,129,757
|
4,349,729
|
17.9%
|
5,419,376
|
-5.3%
|
Loans to customers and finance lease
receivables
|
20,232,721
|
16,861,706
|
20.0%
|
19,010,599
|
6.4%
|
Accounts receivable and other
loans
|
47,562
|
397,990
|
-88.0%
|
48,860
|
-2.7%
|
Prepayments
|
37,511
|
43,612
|
-14.0%
|
42,785
|
-12.3%
|
Foreclosed assets
|
271,712
|
119,923
|
126.6%
|
237,116
|
14.6%
|
Right-of-use assets
|
138,695
|
117,387
|
18.2%
|
144,422
|
-4.0%
|
Investment properties
|
124,068
|
166,546
|
-25.5%
|
132,896
|
-6.6%
|
Property and equipment
|
436,955
|
398,855
|
9.6%
|
430,181
|
1.6%
|
Goodwill
|
41,253
|
33,351
|
23.7%
|
39,116
|
5.5%
|
Intangible assets
|
167,862
|
149,441
|
12.3%
|
165,475
|
1.4%
|
Income tax assets
|
2,520
|
864
|
191.7%
|
786
|
NMF
|
Other assets
|
245,072
|
215,059
|
14.0%
|
310,188
|
-21.0%
|
Assets held for sale
|
27,389
|
29,566
|
-7.4%
|
29,332
|
-6.6%
|
Total assets
|
31,757,558
|
28,901,900
|
9.9%
|
30,849,813
|
2.9%
|
Client deposits and notes
|
20,522,739
|
18,261,397
|
12.4%
|
21,743,543
|
-5.6%
|
Amounts owed to credit
institutions
|
5,156,009
|
5,266,653
|
-2.1%
|
3,163,001
|
63.0%
|
Debt securities issued
|
421,359
|
645,968
|
-34.8%
|
425,560
|
-1.0%
|
Lease liability
|
141,934
|
114,470
|
24.0%
|
145,517
|
-2.5%
|
Accruals and deferred
income
|
129,355
|
106,366
|
21.6%
|
106,042
|
22.0%
|
Income tax liabilities
|
199,058
|
99,533
|
100.0%
|
158,956
|
25.2%
|
Other liabilities
|
167,268
|
158,691
|
5.4%
|
372,016
|
-55.0%
|
Total liabilities
|
26,737,722
|
24,653,078
|
8.5%
|
26,114,635
|
2.4%
|
Share capital
|
1,506
|
1,563
|
-3.6%
|
1,511
|
-0.3%
|
Additional paid-in capital
|
465,009
|
505,723
|
-8.1%
|
459,630
|
1.2%
|
Treasury shares
|
(71)
|
(83)
|
-14.5%
|
(69)
|
2.9%
|
Capital redemption reserve
|
112
|
55
|
103.6%
|
107
|
4.7%
|
Other reserves
|
21,385
|
14,564
|
46.8%
|
29,458
|
-27.4%
|
Retained earnings
|
4,510,780
|
3,709,751
|
21.6%
|
4,225,583
|
6.7%
|
Total equity attributable to shareholders of the
Group
|
4,998,721
|
4,231,573
|
18.1%
|
4,716,220
|
6.0%
|
Non-controlling interests
|
21,115
|
17,249
|
22.4%
|
18,958
|
11.4%
|
Total equity
|
5,019,836
|
4,248,822
|
18.1%
|
4,735,178
|
6.0%
|
Total liabilities and equity
|
31,757,558
|
28,901,900
|
9.9%
|
30,849,813
|
2.9%
|
Book
value per share
|
114.62
|
94.07
|
21.8%
|
107.64
|
6.5%
|
KEY
RATIOS
|
4Q23
|
4Q22
|
3Q23
|
|
FY23
|
FY22
|
Profitability
|
|
|
|
|
|
|
ROAA (adjusted)
|
4.2%
|
4.7%
|
4.8%
|
|
4.7%
|
4.4%
|
ROAA (unadjusted)
|
4.2%
|
9.1%
|
4.8%
|
|
4.8%
|
5.6%
|
ROAE (adjusted)
|
26.7%
|
33.7%
|
30.7%
|
|
29.9%
|
32.4%
|
RB
ROAE
|
42.2%
|
36.2%
|
46.9%
|
|
39.6%
|
31.7%
|
SME ROAE
|
20.6%
|
25.7%
|
21.7%
|
|
22.6%
|
24.0%
|
CIB ROAE
|
17.8%
|
36.5%
|
22.3%
|
|
26.0%
|
39.1%
|
ROAE (unadjusted)
|
26.8%
|
66.1%
|
30.7%
|
|
30.4%
|
41.4%
|
RB ROAE
|
42.2%
|
27.7%
|
46.9%
|
|
39.6%
|
29.3%
|
SME ROAE
|
20.6%
|
18.9%
|
21.7%
|
|
22.6%
|
22.2%
|
CIB ROAE
|
18.1%
|
138.1%
|
22.3%
|
|
27.1%
|
67.4%
|
Net interest margin
|
6.3%
|
5.7%
|
6.6%
|
|
6.5%
|
5.4%
|
RB
NIM
|
6.3%
|
5.0%
|
6.3%
|
|
6.0%
|
5.0%
|
SME NIM
|
4.8%
|
4.4%
|
4.9%
|
|
4.9%
|
4.3%
|
CIB NIM
|
5.3%
|
6.3%
|
6.1%
|
|
6.2%
|
5.6%
|
Loan yield
|
12.4%
|
12.0%
|
12.6%
|
|
12.5%
|
11.5%
|
RB
loan yield
|
13.9%
|
13.9%
|
14.0%
|
|
14.1%
|
13.7%
|
SME loan yield
|
11.1%
|
10.5%
|
11.4%
|
|
11.2%
|
10.0%
|
CIB loan yield
|
11.6%
|
10.2%
|
11.8%
|
|
11.5%
|
9.3%
|
Liquid assets yield
|
5.0%
|
4.2%
|
4.7%
|
|
4.7%
|
4.3%
|
Cost of funds
|
4.9%
|
4.6%
|
4.7%
|
|
4.7%
|
4.9%
|
Cost of client deposits and
notes
|
4.2%
|
3.4%
|
4.2%
|
|
4.0%
|
3.6%
|
RB
cost of client deposits and notes
|
3.2%
|
2.5%
|
3.0%
|
|
3.0%
|
2.7%
|
SME cost of client deposits and notes
|
1.9%
|
1.0%
|
1.9%
|
|
1.7%
|
1.0%
|
CIB cost of client deposits and notes
|
7.2%
|
6.2%
|
7.3%
|
|
7.2%
|
6.2%
|
Cost of amounts owed to credit
Institutions
|
7.7%
|
8.5%
|
8.0%
|
|
8.0%
|
8.9%
|
Cost of debt securities
issued
|
9.3%
|
7.5%
|
8.6%
|
|
8.2%
|
7.1%
|
Operating leverage, Y-o-Y
|
-12.0%
|
34.1%
|
6.8%
|
|
8.8%
|
20.4%
|
Operating leverage, Q-o-Q
|
-19.2%
|
-1.5%
|
-7.0%
|
|
n/a
|
n/a
|
Cost:income ratio
|
34.3%
|
31.0%
|
28.8%
|
|
29.8%
|
32.0%
|
RB
cost:income ratio
|
39.8%
|
36.4%
|
32.1%
|
|
35.9%
|
37.2%
|
SME cost:income ratio
|
33.3%
|
31.7%
|
27.8%
|
|
29.3%
|
33.0%
|
CIB cost:income ratio
|
20.4%
|
17.2%
|
17.0%
|
|
15.3%
|
18.7%
|
Cost:income ratio
(unadjusted)
|
34.2%
|
18.6%
|
28.8%
|
|
29.5%
|
26.8%
|
RB cost:income ratio
|
39.8%
|
36.4%
|
32.1%
|
|
35.9%
|
37.2%
|
SME cost:income ratio
|
33.3%
|
31.7%
|
27.8%
|
|
29.3%
|
33.0%
|
CIB cost:income ratio
|
20.2%
|
5.3%
|
17.0%
|
|
14.9%
|
11.1%
|
Liquidity
|
|
|
|
|
|
|
NBG liquidity coverage
ratio
|
n/a
|
132.4%
|
n/a
|
|
n/a
|
132.4%
|
IFRS-based NBG liquidity coverage
ratio
|
125.2%
|
n/a
|
135.7%
|
|
125.2%
|
n/a
|
Liquid assets to total
liabilities
|
37.3%
|
42.1%
|
39.3%
|
|
37.3%
|
42.1%
|
Net loans to client deposits and
notes
|
98.6%
|
92.3%
|
87.4%
|
|
98.6%
|
92.3%
|
Net loans to client deposits and
notes + DFIs
|
89.3%
|
83.8%
|
79.8%
|
|
89.3%
|
83.8%
|
Leverage (Times)
|
5.3
|
5.8
|
5.5
|
|
5.3
|
5.8
|
Asset quality:
|
|
|
|
|
|
|
NPLs (in GEL thousands)
|
467,656
|
471,577
|
470,808
|
|
467,656
|
471,577
|
NPLs to gross loans
|
2.3%
|
2.7%
|
2.4%
|
|
2.3%
|
2.7%
|
NPL coverage ratio
|
69.2%
|
66.4%
|
69.1%
|
|
69.2%
|
66.4%
|
NPL coverage ratio adjusted for the
discounted value of collateral
|
117.6%
|
128.9%
|
122.1%
|
|
117.6%
|
128.9%
|
Cost of credit risk ratio
|
0.4%
|
0.9%
|
0.6%
|
|
0.7%
|
0.8%
|
RB
cost of credit risk ratio
|
-0.1%
|
2.0%
|
0.8%
|
|
1.0%
|
2.2%
|
SME cost of credit risk ratio
|
0.6%
|
0.3%
|
1.1%
|
|
0.7%
|
0.1%
|
CIB cost of credit risk ratio
|
1.0%
|
0.0%
|
0.2%
|
|
0.4%
|
-1.0%
|
Capital adequacy:
|
|
|
|
|
|
|
NBG (Basel III) CET 1 capital
adequacy ratio
|
n/a
|
14.7%
|
n/a
|
|
n/a
|
14.7%
|
Minimum regulatory requirement
|
n/a
|
11.6%
|
n/a
|
|
n/a
|
11.6%
|
NBG (Basel III) Tier I capital
adequacy ratio
|
n/a
|
16.7%
|
n/a
|
|
n/a
|
16.7%
|
Minimum regulatory requirement
|
n/a
|
13.8%
|
n/a
|
|
n/a
|
13.8%
|
NBG (Basel III) Total capital
adequacy ratio
|
n/a
|
19.8%
|
n/a
|
|
n/a
|
19.8%
|
Minimum regulatory requirement
|
n/a
|
17.2%
|
n/a
|
|
n/a
|
17.2%
|
|
|
|
|
|
|
|
IFRS-based NBG (Basel III) CET 1
capital adequacy ratio
|
18.2%
|
n/a
|
18.5%
|
|
18.2%
|
n/a
|
Minimum regulatory requirement
|
14.5%
|
n/a
|
14.7%
|
|
14.5%
|
n/a
|
IFRS-based NBG (Basel III) Tier I
capital adequacy ratio
|
20.0%
|
n/a
|
20.4%
|
|
20.0%
|
n/a
|
Minimum regulatory requirement
|
16.7%
|
n/a
|
16.9%
|
|
16.7%
|
n/a
|
IFRS-based NBG (Basel III) Total
capital adequacy ratio
|
22.1%
|
n/a
|
22.6[12]%
|
|
22.1%
|
n/a
|
Minimum regulatory requirement
|
19.6%
|
n/a
|
19.9%
|
|
19.6%
|
n/a
|
|
|
|
|
|
|
|
FX
rates
|
|
|
|
|
|
|
GEL/USD exchange rate
(period-end)
|
2.6894
|
2.7020
|
2.6783
|
|
2.6894
|
2.7020
|
GEL/GBP exchange rate
(period-end)
|
3.4228
|
3.2581
|
3.2852
|
|
3.4228
|
3.2581
|
|
|
|
|
|
|
|
Shares outstanding
|
|
|
|
|
|
|
Ordinary shares outstanding
(period-end)
|
43,610,758
|
44,982,831
|
43,816,379
|
|
43,610,758
|
44,982,831
|
Treasury shares outstanding
(period-end)
|
2,155,535
|
2,516,151
|
2,098,344
|
|
2,155,535
|
2,516,151
|
Total shares outstanding
(period-end)
|
45,766,293
|
47,498,982
|
45,914,723
|
|
45,766,293
|
47,498,982
|
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
§ Digital daily active user
(Digital DAU) Average daily number
of retail customers who logged into our mBank/iBank at least one
within the past month
§ Digital monthly active user
(Digital MAU) Number of retail
customers who logged into our mBank/iBank 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
§ MAU (Monthly active user -
retail or business) Number of
customers who satisfied pre-defined activity criteria within the
past month
§ Payment MAU
Number of retail customers who made at least one
payment with a BOG card within the past month
Ratio definitions
§ 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
§ Cost of credit risk
ratio 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 (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
§ 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
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
§ Loan yield
Interest income from 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 (annualised where applicable)
§ 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 over the same period (annualised where applicable)
§ 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
§ 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 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)
§ 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
Not meaningful
Constant currency basis
To calculate the q-o-q growth of
loans and deposits without the currency exchange rate effect, we
used the USD/GEL exchange rate of 2.6783 as of 30 September 2023.
To calculate the y-o-y growth without the currency exchange rate
effect, we used the USD/GEL exchange rate of 2.7020 as of 31
December 2022.
ABOUT BANK OF GEORGIA GROUP PLC
Bank of Georgia Group PLC (the
"Company" - LSE:
BGEO LN or the "Group" when referring to the group
companies as a whole) is a UK-incorporated holding company. The
Group mainly comprises: 1) retail banking and payments business
(Retail Banking or RB); 2) SME (small and medium-sized enterprises)
banking (SME Banking); and 3) corporate banking and investment banking operations
(Corporate and Investment Banking or CIB) 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.
Bank of Georgia is a digital banking leader
in Georgia, serving more than 1.8 million monthly active retail
customers and c.98 thousand monthly active business
clients.
Enabled by high levels of customer
satisfaction and the strength of our customer franchise, we have
consistently delivered a return on average equity above 20%. We
focus on customer relationships - supporting our clients at every
step of their journeys, creating products and services that fulfil
their needs and delivering positive experiences across different
touchpoints. We are committed to creating shared opportunities and
building long-term value - underpinned by the highest standards of
corporate governance and a strong risk management framework and
guided by our purpose - helping people achieve more of their
potential.
4Q23 AND FY23 RESULTS AND CONFERENCE CALL
DETAILS
Bank of Georgia Group PLC announces
the Group's preliminary consolidated financial results for the
fourth quarter and the full year 2023. Unless otherwise noted,
numbers in this announcement are given for 4Q23 and FY23 and the
year-on-year comparisons are with 4Q22 and FY22 and the q-o-q
comparisons are with 3Q23. 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.
The information in this Announcement
in respect of the full year 2023 preliminary results, which was
approved by the Board of Directors on 14 March 2024, does not
constitute statutory accounts within the meaning of Section 434 of
the UK Companies Act 2006. The statutory accounts for the year
ended 31 December 2022 have been filed with the Registrar of
Companies, and the audit reports were unqualified and contained no
statements in respect of Sections 498 (2) or (3) of the UK
Companies Act 2006. The consolidated financial statements for the
year ended 31 December 2023 will be included in the Annual Report
and Accounts expected to be published in April 2023, which will be
filed with the Registrar of Companies following Bank of Georgia
Group PLC's Annual General Meeting.
A conference call with investors and
analysts will be held on 15 March 2024, at 14:00 GMT.
Webinar instructions:
Please click the link below to join
the webinar:
https://bankofgeorgia.zoom.us/j/99337532784?pwd=K0x2Sk5Lekp3MTNPRllic0tNNlhTdz09
Webinar ID: 993 3753 2784
Passcode: 816902
Or use the following international
dial-in numbers available at: https://bankofgeorgia.zoom.us/u/aylJN8UCh
Webinar ID: 993 3753 2784#
Passcode: 816902
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 2022 and in the 2Q23 and 1H23 results release.
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.