14th May 2019 09:46
LONDON (Alliance News) - Bank of Georgia Group PLC on Tuesday reported a rise in profit and income, as the bank's loan book expanded sharply and its investment management arm also grew.
In the three months to March 31, the Georgian lender reported an 11% increase in pretax profit to GEL122.7 million, about GBP34.6 million, from GEL110.9 million, about GBP31.2 million, the year before.
The lender's net interest income increased 1.5% in the quarter to GEL182.9 million from GEL180.2 million in the corresponding period the year prior.
Bank of Georgia's loan book jumped 22% year-on-year to GEL9.57 billion compared to GEL7.82 billion at the end of the first period last year. The lender ended the period with a non-performing loans to gross loans ratio of 3.3%.
The lender's net interest margin in the period slipped to 5.8% compared to 7.0% in the first quarter the year before.
Bank of Georgia's regulatory Tier I capital adequacy ratio ended the period at 12.7%, slightly higher than the 12.4% at the same time last year.
"In the first quarter of 2019, the group delivered another period of good balance sheet and fee income growth, in the seasonally quiet first quarter of the year, combined with continued superior profitability. In addition, we have continued to build our fully integrated digital capacity; we improved our already strong capital position with the issuance of USD100 million Additional Tier 1 capital, and announced the strengthening of our executive management team. At the same time, the Bank has adopted a significant tranche of local regulatory changes and the Georgian economy has continued to achieve strong macro-economic growth," said Chief Executive Archil Gachechiladze.
The bank's Retail banking unit suffered a 1.3% slip in pretax profit to GEL76.9 million on a 3.3% decrease in net interest income to GEL131.0 million. The unit's loan book saw a 23% jump however. Loan originations in the quarter were boosted by a sharp rise in small business loans, partially offset by a significant decrease in mortgage loans.
Bank of Georgia attributed the unit's difficulties to recent regulations covering consumer lending introduced in the country. The retail unit's net interest margin slipped to 6.4% in the quarter from 8.2% a year before.
The Corporate Investment Banking unit reported a 53% rise in pretax profit to GEL48.1 million and a 20% increase in net interest income to GEL45.7 million.
The unit's investment management business saw its assets under management increase 29% year-on-year to GEL2.37 billion.
Gachechiladze added: "Looking forward, we expect that banks will see a shift towards lending to corporates and the MSME sector, and in the mortgage sector, improving the overall quality of banking balance sheets, and driving further progress in the dedollarisation of the banking sector. This is expected to support increased capital efficiency, and continuing strong profitability for Bank of Georgia."
Shares in Bank of Georgia were down 0.2% Tuesday morning at 1,680.00 pence each.
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