Bank of Georgia delivers solid Q1 as profit jump

First-quarter profits at Bank of Georgia were up by more than a fifth, helped by favourable macro conditions and the recent acquisition of Armenia's Ameriabank.

Adjusted profit came in at 369.1m Georgian lari (£107m), up 22.5% on last year, with net interest income rising 17.7% to GEL437.8m.

Adjusted return on average equity (ROE) rose to 27.7%, up from 26.7% in the fourth quarter but down slightly on the 27.9% recorded the year before – though still well above the bank's medium-term target of 20%.

"You are now seeing the group's balance sheet in its new shape, with assets close to $16bn at the end of March, comprising two leading, top-of-mind universal banks in Georgia and Armenia," said chief executive Archil Gachechiladze in a note to shareholders.

Gachechiladze said "positive dynamics" in the Georgian economy were bolstering results in the first three months of the year, with real GDP growing by 7.8% year-on-year amid low inflation. However, he did caution over geopolitical uncertainty ahead of the upcoming parliamentary elections in October.

In the Georgian Financial Services division, annual loan growth was 22.6% in the first quarter of 2024, with the loan book quality said to be at "very healthy levels", while customer deposits grew by 19.3%.

Over in Armenia, real GDP growth was estimated at 9.2% year-on-year, driving loan book growth of 30% and high profitability with the ROE at 25%.

"Following the acquisition of Ameriabank, we increased the Group's medium-term target for annual loan book growth to c.15%. We maintain our profitability target of a 20%+ ROE, and capital distribution policy of 30-50% of annual profits via dividends and share buyback and cancellation. The teams across the Group are committed to driving strong results and success going forward," Gachechiladze said.