2024-03-15 09:42:58
(Alliance News) – Bank of Georgia Group PLC launched a new share buyback on Friday, but said higher costs would limit profits in 2023.
Bank of Georgia shares fell 3.7% to 4,986.69 pence each in London on Friday morning following the announcement.
The Tbilisi-based lender said 2023 was another successful year, as it revealed that operating income increased by 26% to GEL 2.53 billion, approximately $954.8 million, from GEL 2.00 billion, of which net interest income contributed GEL 1.62 billion, up 37% from GEL 1.18 billion.
The net interest margin improved from 5.4% in 2022 to 6.5%.
However, due to increased costs, profit after tax and exceptional items fell by 3.2%, from GEL 1.44 billion to GEL 1.40 billion.
Profit before tax increased by 1.3%, from GEL 1.63 billion to GEL 1.66 billion. Excluding exceptional items, profit before tax increased by 31%, from GEL 1.24 billion to GEL 1.63 billion.
In 2023, operating expenses increased by 18%, from GEL 641.2 million to GEL 754.1 million, due to continued investments, increased administrative expenses and related transaction costs to the acquisition of Ameriabank CJSC.
In February, the Bank of Georgia Group announced the acquisition of Ameriabank for USD 303.6 million, opening the door to one of the “fastest growing economies” in the Caucasus region.
Bank of Georgia said the Yerevan-based bank had “an attractive franchise, in an attractive market, with similar characteristics to those in Georgia.”
The deal has “significant upside potential,” the group said, and Bank of Georgia believes there is room for growth in the bank’s retail performance and customer base.
Bank of Georgia said the acquisition would not change its policy on dividends and capital distribution ratio, which is between 30 and 50 percent.
The lender declared a final dividend of 4.94 GEL per share, which will mean a total dividend of 8.00 GEL for 2023, up 4.6% from 7.65 GEL in 2022, itself doubled compared to 3.81 GEL in 2021. The
Bank of Georgia also extended its share buyback program by an additional 100 million GEL. It will begin this program once the current buyback of 62 million GEL is completed and will complete the new program by its annual general meeting in June.
On an optimistic note, the bank said it remains well positioned to benefit from strong economic activity in the region.
“Georgia’s EU candidate status, an important milestone reached in December 2023, which defined the country’s geopolitical vector, is expected to support ongoing investments in the Georgian economy,” the bank said.
“We expect the real GDPs of Georgia and Armenia to grow by more than 5% in 2024, and we remain focused on our strategic priorities to unlock growth opportunities and sustainably deliver strong and sustainable growth. high profitability.”
By Jeremy Cutler, Alliance News reporter
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