19th Feb 2019 08:33
LONDON (Alliance News) - Bank of Georgia Group PLC on Tuesday reported strong growth in profit and revenue for 2018 as the lender shifted its focus to increase mortgage lending.
The FTSE 250-listed lender's revenue in 2018 increased 14% to GEL1.03 billion, about GBP300 million, from GEL900.34 million, about GBP263 million.
Bank of Georgia's net interest income jumped 10% to GEL741.8 million from GEL672.5 million in 2017. The bank reported a GEL128.8 million net gain on foreign currency compared to GEL79.1 million gain in 2017.
The lender's pretax profit increased 12% in 2018 to GEL437.5 million from GEL391.3 million.
The bank intends to recommend an annual dividend of 2.55 pence, a 4.5% increase on 2017's payout.
"From a macroeconomic perspective, Georgia continues to produce strong real GDP growth, estimated at 4.8% for 2018, with inflation remaining well contained at 1.5% in December 2018, comfortably below the National Bank of Georgia's target of 3.0% for the year. The Georgian government's prudent macroeconomic policies continue to serve the country well, and the economy has remained extremely resilient to pressures in neighbouring countries, and some volatility in regional financial markets," said Chief Executive Archil Gachechiladze.
"Perhaps most significantly, the country recorded its first ever current account surplus in the third quarter of 2018, an extremely positive macroeconomic development for Georgia."
Bank of Georgia's loan to customers increased 22% during the year to GEL9.40 billion from GEL7.69 billion in 2017. Customer deposits increased 21% to GEL8.13 billion from GEL6.71 billion. The lender's non-performing loans increased 5.7% in 2018 to GEL318.4 million.
The lender's net interest margin decreased to 6.5% from 7.3%. The bank's total capital adequacy ratio fell to 16.6% from 17.9%, Bank of Georgia's tier I capital adequacy ratio decreased slightly to 12.2%.
Gachechiladze added: "The group's capital and funding position remains strong."
The bank operates three main units: Retail Banking, Corporate Investment Banking and its Belarusian subsidiary BNB, which trades as JSC Belarusky Narodny Bank.
The Retail unit saw a 10% rise in profit to GEL294.6 million on an 18% increase in revenue to GEL723.5 million. The Investment Banking unit saw a similar increase in profit, jumping 20%, to GEL136.0 million on a revenue rise of 6.0% to GEL253.8 million.
"The Retail Banking's clear focus over the last few quarters has been on growing the mortgage and SME portfolios more rapidly than the unsecured consumer lending portfolios, and loan originations in these portfolios have been extremely strong. In the fourth quarter of 2018, the mortgage and SME portfolios grew by 13% and 7.9% quarter-on-quarter, respectively, driven by very targeted and capital efficient lending campaigns. Over the last 12 months, the mortgage portfolio increased by 50%, while SME portfolio growth totalled 25%," said Gachechiladze.
He added: "We also continued to deliver strong progress in the Corporate Investment Banking business, and lending growth is now more balanced between retail and corporate banking.
"Overall, the group has delivered another year of strong franchise and earnings growth. Returns continue to be high and the group remains very well positioned to continue to deliver good momentum and high returns."
Shares in Bank of Georgia were down 0.7% to 1,712.60 pence early Tuesday morning.
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