Bank of Georgia posts 'exceptional' results, shares hit fresh highs

Underlying operating profit jumped by 59% versus the year earlier period to reach 351m Georgian lari (Numis: 257m GEL).

Across 2022, the economy of the country, which is located on the Black Sea in the Caucasus region was estimated to have grown by 10.1%.

The lender's net interest margin jumped from 5.3% to 5.7% alongside income growth of 54%.

In parallel, its cost:income ratio plummeted from 40% to 31%.

Its return of equity meanwhile shot higher during the quarter, reaching a record 33.7%, helped by a 113m GEL share buyback programme

Bank of Georgia's common equity tier one ratio improved from 13.2% to 14.7%.

The CET1 ratio excluded an extraordinary gain of GEL391m related to a settlement involving one of its legacy defaulted borrowers, which was being held at the holding company level.

In line with the lender's distribution policy, on Thursday it unveiled a further GEL148m share buy back authorisation which would commence on 16 February.

Analysts at Numis described the results as "exceptional" and raised its target price for the shares from 4,777.0p to 5,752.0p.

"We believe BoG offers lower risk, materially higher returns and structurally superior growth, compared to every UK lender.

"Despite the shares trading at very close to an all-time high (and banks doing that are very thin on the ground) BoG is being valued at just 4.1x current year earnings, falling to 3.7x next year."

As of 1123 GMT, shares of Bank of Georgia were trading 6.8% higher at 2,905.0p, having earlier risen to 3,005.0p.