16th Mar 2020 13:08
(Alliance News) - Bank of Georgia Group PLC on Monday said it is halting plans to pay a dividend amid the Covid-19 outbreak.
The Georgian lender had at the time of its 2019 results announcement in mid-February said it would be recommending a dividend of GEL2.67 per share for 2019.
Guidances for 2020 was at least a 20% return on equity and growth of 15% in the loan book.
"Given the current level of uncertainty with regard to the global impact of Covid-19, and the potential length of time of that impact, the board of directors will keep these issues under review in the light of developments over the next few months," said Bank of Georgia.
"In the meantime, the board of directors has decided not to recommend a dividend to shareholders at the 2020 annual general meeting, at this stage. When the full economic impact of the Covid-19 pandemic is better understood, the board will consider the appropriate level."
A further update will come at the time of first-quarter results in May.
Trading so far in 2020 has either met or exceeded targets, the company said, with asset quality "very robust" and funding and liquidity strong, well ahead of regulatory requirements.
The firm said all 93 of its main branches will be staying open, though some customer services support areas will be closed at express branches.
The Georgian tourism sector is already suffering, Bank of Georgia said. It has around GEL800 million of loans to the sector, which it said are almost all fully secured.
Chief Executive Archil Gachechiladze said: "Georgia's response to the evolving coronavirus crisis has so far been extremely successful, but these are unprecedentedly challenging times and the country cannot be immune to the global economic impact on many businesses, but particularly in the tourism and tourism-related sectors.
"Our priority at Bank of Georgia is first and foremost the health and well-being of our staff and customers, and our BCP has been implemented to ensure that priority, together with sustaining the long-term stability, strength and profitability of the group. We will monitor the impact of Covid-19 on an ongoing basis, and adapt and manage our resources according to evolving circumstances."
"The group is very well-positioned with strong capital, funding and liquidity resources, and we aim to ensure that this remains the case. We will also continue to work with the government of Georgia and the National Bank of Georgia to take the appropriate actions to pro-actively manage this process," the CEO continued.
Shares were 14% lower on Monday afternoon in London at 1,057.00 pence each.
By George Collard; [email protected]
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