Bank of Georgia Group PLC on Friday launched a new share buyback but said higher costs kept profits in check in 2023.
Shares in Bank of Georgia were down 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 disclosed operating income rose by 26% to ₾2.53 billion, about $954.8 million, from ₾2.00 billion, of which net interest income contributed ₾1.62 billion, up 37% from ₾1.18 billion.
The net interest margin improved to 6.5% from 5.4% in 2022.
But higher costs meant profit after tax and one-off items fell 3.2% to ₾1.40 billion from ₾1.44 billion.
Pretax profit rose 1.3% to ₾1.66 billion from ₾1.63 billion. Excluding one-off items, pretax profit rose 31% to ₾1.63 billion from ₾1.24 billion.
In 2023, operating expenses jumped 18% to ₾754.1 million from ₾641.2 million reflecting ongoing investment, a rise in administrative expenses, and transaction costs incurred in relation to the acquisition of Ameriabank CJSC.
In February, Bank of Georgia Group announced the acquisition of Ameriabank for $303.6 million, opening the door into one of the Caucasus region’s ‘fastest-growing economies’.
Bank of Georgia said that the Yerevan-based bank has ‘an attractive franchise, in an attractive market, with similar characteristics to Georgia’.
The deal possesses ‘significant upside potential’, the group said, and Bank of Georgia believes that there is scope for growth in the bank’s retail performance and customer base.
Bank of Georgia said the acquisition would not alter its dividend and capital payout ratio policy of 30% to 50%.
The lender declared a final dividend of ₾4.94 per share, which will mean a total dividend of ₾8.00 for 2023, up 4.6% from ₾7.65 in 2022, itself doubled from ₾3.81 in 2021. The
Bank of Georgia also extended its share buyback programme by a further ₾100 million. It will start this once the current ₾62 million buyback is completed and complete the new programme by the time of its annual general meeting in June.
Striking an optimistic note, the bank said it remains well-positioned to capture the benefits of strong economic activity in the region.
‘Georgia’s EU candidacy status, a significant milestone achieved in December 2023, which has defined the country’s geopolitical vector, is expected to support ongoing investments in the Georgian economy,’ it said.
‘We expect both Georgian and Armenian real GDPs to grow by more than 5% in 2024, and we remain focused on our strategic priorities to unlock growth opportunities and sustainably deliver strong growth and high profitability.’
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