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1. Company Snapshot

1.a. Company Description

Bank of Georgia Group PLC, through its subsidiaries, provides various banking products and services in Georgia.It operates through three segments: Retail Banking, Corporate and Investment Banking, and BNB.The Retail Banking segment offers consumer loans, mortgage loans, overdrafts, credit cards, and other credit facilities; funds transfer and settlement services; and customers' deposits for individuals and legal entities under the Express, Bank of Georgia, MSME, and SOLO brands.


It primarily serves retail, and mass retail and affluent segments, as well as small and medium enterprises, and micro businesses.The Corporate Investment Banking segment provides loans and other credit facilities, funds transfers and settlement services, trade finance services, and documentary operations support services; and handles saving and term deposits for corporate and institutional customers.This segment also offers private banking services to high net worth clients; and brokerage services.


The BNB segment provides retail and corporate banking services to clients in Belarus.As of December 31, 2021, the company operated 211 retail branches, 989 automated teller machines, and 3,134 Express Pay terminals.Bank of Georgia Group PLC was incorporated in 2017 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on BGEO

Bank of Georgia Group PLC's recent performance has been positively driven by its robust long-term growth trajectory. Over the last five years, investors have seen an enviable 987% return, underscoring the company's strong fundamentals. Although no recent earnings release data is available, the company's sustained growth suggests a favorable business condition evolution. Additionally, with no mentioned legal issues or negative short-term news, the environment appears conducive for continued growth, fueled by a solid operational backdrop.

1.c. Company Highlights

2. Lion Finance Delivers Strong Q3 Results Amidst Favorable Macroeconomic Conditions

Lion Finance reported a profit of GEL 547 million, up 8% year-over-year, with a return on average equity of 28%. The loan book grew 22% in constant currency, driven by strong growth in Armenia and Georgia. Net interest income was up 21% year-over-year, contributing to a 15.6% growth in operating income. Earnings per share (EPS) came in at 3.47, beating analyst estimates of 3.04. The net interest margin (NIM) increased by 20 basis points quarter-over-quarter, driven by a pickup in Georgia. Operating expenses rose 17.1%, resulting in a cost-to-income ratio of 35.3%.

Publication Date: Nov -23

📋 Highlights
  • Profit & ROE Growth:: Q3 profit rose to GEL 547 million (+8% YoY), with ROAE at 28% and Georgian subsidiary ROE at 32%.
  • Loan Book Expansion:: Loan growth reached 22% in constant currency, driven by 36.5% in Armenia and 16.1% in Georgia.
  • Operating Income & Costs:: Operating income grew 15.6% (+21% net interest income), but expenses climbed 17.1%, yielding a 35.3% cost-to-income ratio.
  • Capital & Market Position:: Maintains 1.5% capital buffer above minimum, with 40% Georgia market share and 30% target in Armenia.
  • Future Guidance:: Aims for 10-12% loan growth in Georgia, 15-20% in Armenia, and stable NIM amid 50 bps rate cut forecast by 2026.

Valuation and Dividend Yield

The stock is currently trading at a P/E ratio of 1.77 and a Price-to-Book (P/B) ratio of 0.47. The dividend yield stands at 3.48%, indicating an attractive return for income-seeking investors. With a strong capital position and a focus on maintaining a management buffer, the bank is well-positioned to continue its dividend payments.

Growth Prospects and Regional Outlook

The bank expects loan growth to be between 10-12% in Georgia and 15-20% in Armenia. The macroeconomic outlook for both countries is positive, with real GDP growth forecast at 7.5% and 5%, respectively. The bank's franchise value, particularly in digital retail, is not yet fully appreciated by the market, with the stock trading at a discount to its historical range.

Strategic Initiatives and Capital Management

Lion Finance is scanning the market for potential M&A opportunities in Central and Eastern Europe, Southeast Europe, and Central Asia. The bank targets a capital distribution range of 30-50%, with a split of roughly 2/3 for dividends and 1/3 for buybacks. The regulatory environment remains stable, with no material changes expected in Armenia or Georgia.

Outlook and Analyst Estimates

Analysts estimate next year's revenue growth at 11.2%. The bank's strong performance and positive outlook are expected to drive future growth, with a record high profit in Q3 exceeding $200 million. The medium-term prospects for Armenia are positive, especially with the expected opening of Azerbaijan and Turkish borders.

3. NewsRoom

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Lion Finance Group PLC (FRA:GEB) Q3 2025 Earnings Call Highlights: Robust Loan Growth and ...

Nov -25

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How Analyst Upgrades Are Shaping the Lion Finance Group Story for Investors

Nov -21

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Lion Finance Group PLC (FRA:GEB) (Q2 2025) Earnings Call Highlights: Strong Profit Growth ...

Aug -23

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Lion Finance Group Second Quarter 2025 Earnings: EPS Misses Expectations

Aug -23

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Lion Finance Group's (LON:BGEO) investors will be pleased with their enviable 987% return over the last five years

Aug -16

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Bank of Georgia Group PLC (BDGSF) Q3 2024 Earnings Call Highlights: Record Profits and Digital ...

Nov -13

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Bank of Georgia Group PLC (BDGSF) (H1 2024) Earnings Call Highlights: Robust Growth and ...

Oct -09

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Top UK Dividend Stocks To Watch In October 2024

Oct -07

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.58%)

6. Segments

Retail Banking

Expected Growth: 12%

The 12% growth in Retail Banking from Bank of Georgia Group PLC is driven by increasing demand for consumer loans, expansion of digital channels, and strategic partnerships. Additionally, the bank's focus on customer experience, innovative product offerings, and effective cost management have contributed to the growth. Furthermore, the bank's strong brand recognition and extensive branch network have enabled it to capitalize on the growing Georgian economy.

Corporate Investment Banking

Expected Growth: 18%

Strong economic growth in Georgia, increasing demand for corporate lending and investment products, strategic expansion into new markets, and effective cost management have driven 18% growth in Corporate Investment Banking at Bank of Georgia Group PLC.

Small and Medium-sized Enterprises

Expected Growth: 10%

The 10% growth of Small and Medium-sized Enterprises (SMEs) from Bank of Georgia Group PLC is driven by increased lending, improved financial inclusion, and government support for entrepreneurship. Additionally, the bank's digitalization efforts, simplified loan procedures, and competitive interest rates have also contributed to the growth.

Belarusky Narodny Bank

Expected Growth: 11%

Belarusky Narodny Bank's 11% growth is driven by strategic expansion into retail banking, increased lending to SMEs, and a growing presence in the Belarusian market. Additionally, the bank's digital transformation efforts, including the introduction of online banking and mobile payment systems, have improved operational efficiency and enhanced customer experience.

Eliminations

Expected Growth: 5%

Bank of Georgia Group PLC's 5% growth driven by increasing demand for digital banking services, expansion into microfinance and SME lending, strategic partnerships, and cost optimization initiatives. Additionally, the group's diversified revenue streams, strong risk management practices, and favorable macroeconomic conditions in Georgia contribute to its growth momentum.

7. Detailed Products

Retail Banking

Provides a range of personal banking services including current and savings accounts, credit cards, personal loans, and mortgages.

Corporate Banking

Offers a range of services to corporate clients, including cash management, trade finance, and lending solutions.

Micro, Small and Medium-Sized Enterprises (MSME) Banking

Provides specialized banking services to micro, small, and medium-sized enterprises, including lending, cash management, and trade finance solutions.

Wealth Management

Offers investment and wealth management services to high net worth individuals, including portfolio management, investment advice, and wealth planning.

Card Services

Provides a range of card services, including debit and credit cards, prepaid cards, and loyalty programs.

Digital Banking

Offers online and mobile banking services, including account management, bill payments, and fund transfers.

Insurance Services

Provides a range of insurance products, including life insurance, non-life insurance, and health insurance.

8. Bank of Georgia Group PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Bank of Georgia Group PLC is moderate due to the presence of alternative financial institutions and digital payment systems.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of concentration of buyers in the Georgian banking industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of a few large suppliers of technology and services to the banking industry.

Threat Of New Entrants

The threat of new entrants is low due to the high capital requirements and regulatory barriers to entry in the Georgian banking industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several large banks in the Georgian market, leading to intense competition for customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.09%
Debt Cost 9.36%
Equity Weight 58.91%
Equity Cost 9.36%
WACC 9.36%
Leverage 69.76%

11. Quality Control: Bank of Georgia Group PLC passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Bank of Georgia

A-Score: 8.2/10

Value: 9.6

Growth: 9.9

Quality: 7.9

Yield: 6.2

Momentum: 10.0

Volatility: 5.3

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Sparebanken Vest

A-Score: 7.1/10

Value: 7.9

Growth: 5.1

Quality: 7.6

Yield: 8.8

Momentum: 6.5

Volatility: 6.7

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Banca IFIS

A-Score: 6.4/10

Value: 7.3

Growth: 4.1

Quality: 5.4

Yield: 10.0

Momentum: 4.0

Volatility: 7.7

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Banco di Desio Brianza

A-Score: 6.3/10

Value: 6.8

Growth: 4.4

Quality: 4.8

Yield: 8.8

Momentum: 8.5

Volatility: 4.3

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Vestjysk Bank

A-Score: 6.2/10

Value: 6.9

Growth: 2.8

Quality: 7.6

Yield: 8.1

Momentum: 8.5

Volatility: 3.3

1-Year Total Return ->

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Bank of Cyprus

A-Score: 4.6/10

Value: 6.8

Growth: 5.1

Quality: 7.0

Yield: 2.5

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

91.7$

Current Price

91.7$

Potential

-0.00%

Expected Cash-Flows