17th Nov 2020 12:21
(Alliance News) - Bank of Georgia Group PLC on Tuesday reported a significant profit rise for the third quarter of 2020, helped by higher interest income as well as lower expenses and a reduced expected loss on loans to customers.
The Georgian lender posted a GEL163.4 million in profit before tax and one-off items, about GBP37.3 million, for the three months ended September 30, up 4.1% from GEL157.0 million a year before. Profit after tax was GEL148.4 million, up from GEL134.3 million.
Net interest income rose to GEL204.0 million from GEL201.0 million, while net fee and commission income fell to GEL45.5 million from GEL48.0 million, and the company made a smaller gain on foreign currency, resulting in a decline in operating income to GEL276.5 million from GEL285.0 million.
However, salaries and other employee benefits were lower, administrative expenses fell, and the firm incurred a lower expected credit loss on loans to customers of GEL5.8 million versus GEL13.6 million a year before. Additionally, non-recurring items swung to a GEL254,000 gain from a GEL5.0 million loss.
The bank's CET1 ratio fell to 9.9% from 11.1% the year before, but its total capital adequacy ratio rose to 17.3% from 16.8%.
Chief Executive Archil Gachechiladze, said: "Our two clear strategic targets remain unchanged: to achieve at least 20% return on average equity and to deliver [circa] 15% growth of the loan book, over time. These results are consistent with those targets, in what remain challenging times. After very low levels of Covid-19 cases, Georgia has recently experienced the emergence of some further waves of infection, although the government expects the economy to remain open despite these new waves. Our ongoing performance, of course, continues to be affected by the Covid-19 economic impact, but our balance sheet is demonstrating robustness, asset quality is resilient, and the group is very well-positioned for the future, with strong liquidity and funding, and capital resources."
Shares in Bank of Georgia were up 3.8% at 1,146.00 pence in London at midday.
By Anna Farley; [email protected]
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