Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q4 2022 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Feb 17, 2023
Slide 1: Results Call Presentation 4Q22 and FY22
RESULTS CALL PRESENTATION 4Q22 and FY22 16 February 2023 Performance ww.bankofgeorgiagroup.com 1
Slide 2: Disclaimer – forward looking statements
Disclaimer – forward looking statements This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs,
Slide 3: Delivering value in 2022
Delivering value in 2022 Highlights of the quarter December 2022 Profit ROE C/I GEL 326m 33.7% 31.0% up 62.4% y-o-y NPS MAU Highlights of the year 58 1.1m+ up 31.5% y-o-y Profit ROE C/I GEL 1,132m 32.4% 32.0% up 55.7% y-o-y Profit, ROE, and cost to income ratio were adjusted for a one-off GEL 391.1m
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q22 AND FY22 RESULTS 4
Slide 5: Strong growth momentum maintained in 4Q22
Strong growth momentum maintained in 4Q22 Real GDP y-o-y growth Key drivers of growth in 2022: 44.8% 2021 1Q22 2Q22 3Q22 4Q22E 2022E Resilient inflows from exports and remittances, full recovery in tourism revenues 10.5% 15.0% 7.2% 9.8% 9.5% 10.1% Increased activity in transport and communicatio
Slide 6: External inflows: exports, remittances, tourism
800 0 200 400 600 800 0 200 400 600 -200 Jan-21 Jan-21 Feb-21 Feb-21 Mar-21 Mar-21 Apr-21 Apr-21 May-21 May-21 Jun-21 Jun-21 Remittances Jul-21 Jul-21 Aug-21 Aug-21 Source: GeoStat, NBG, GNTA Export of goods Sep-21 Sep-21 Oct-21 Oct-21 Nov-21 Nov-21 Dec-21 Dec-21 Export of goods, US$ m Jan-22 Jan-22
Slide 7: Expected normalisation of economic growth
Expected normalisation of economic growth Georgia’s economic growth forecast 10.5% 10.1% In 2023, real GDP growth is expected to slow to 4.8%, considering a high base after two 7.4% consecutive years of double-digit growth 6.4% 4.8% 4.8% 5.0% 5.0% 4.4% The main drivers of growth are expected to
Slide 8: Inflation started to decrease amid eased commodity price pressures
Inflation started to decrease amid eased commodity price pressures Monetary policy remains tight to curb inflation pressures Monetary policy rate Annual CPI inflation 16% 16% 5-year Annual Nov-22 Dec-22 14% average 14% Inflation was mainly driven by elevated Headline CPI 6.8% 10.4% 9.8% 12% 12% fo
Slide 9: GEL supported by sustained FX inflows and tight monetary policy
GEL supported by sustained FX inflows and tight monetary policy Currency movements vs. US$, 12/31/2021 – 12/31/2022 17.9% 12.5% 1.9% 1.5% 0.2% -3.8% -6.1% -7.1% -7.8% -34.7% -40.1% GEL continued to appreciate on the back of strong external inflows, tight monetary policy, and improved sentiments. T
Slide 10: Growing international reserves
1.0 0.0 3.0 4.0 5.0 6.0 2.0 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Source: NBG, BOG Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 external shocks Sep-18 International reserves Dec-18 Mar-19 Jun-19 Gross international reserves, US$ bn Sep-19 Dec-19 Mar-20 Jun-
Slide 11: Healthy banking sector, with dollarisation down
Healthy banking sector, with dollarisation down Bank loan book growth vs. nominal Loan and deposit dollarisation Non-performing bank loans to total GDP growth gross loans in selected countries, 1H2022 Nominal GDP growth, y-o-y Bank loan dollarisation Lithuania 0.5% Bank credit growth, y-o-y Bank dep
Slide 12: Reduced debt burden in the economy
Reduced debt burden in the economy Banking sector loans to households Public debt as % of GDP and legal entities as % of GDP Domestic public debt as % of GDP External public debt as % of GDP Household loans to GDP Legal entity loans to GDP Total public debt as % of GDP 60.2% 100% 100% 70% 70% 49.7%
Slide 13: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q22 AND FY22 RESULTS 13
Slide 14: Who we are and what we focus on
Who we are and what we focus on A FTSE-250 company with a diversified institutional investor base Retail digital banking leader Top of mind and the most trusted bank in Georgia Consistently delivering high profitability (ROE above 20%) Highest standards of corporate governance and a strong focus on
Slide 15: Our customers are becoming more digital and engaged
Our customers are becoming more digital and engaged Figures given for JSC Bank of Georgia standalone Active users (retail) Building a financial super app thousands Monthly active clients MAU DAU +17.1% 1,632 y-o-y 1,492 1,546 1,394 1,429 1,121 +31.5% 959 1,005 y-o-y 853 892 533 +41.4% 398 439 454 37
Slide 16: sCoolApp | the first financial mobile application for juniors
sCoolApp | the first financial mobile application for juniors Monthly active digital users Money request Application skins Animations Fun features 33,167 Check 23,436 available balance 9,495 sCool Card details and transactions Oct-22 Nov-22 Dec-22 Special offers Addressable market Piggy Bank Total a
Slide 17: Focusing on increasing sales in digital channels
Focusing on increasing sales in digital channels Figures given for JSC Bank of Georgia standalone Number of transactions Product offloading millions thousands Share of +74.9% mBank/iBank 50.8% 53.7% 53.9% 55.8% 58.2% transactions +46.9% 90.2 700 642 100.0% 80.7 3.2 76.6 90.0% 2.7 12.0 600 69.6 80.0%
Slide 18: Full digital experience for our business customers
Full digital experience for our business customers Figures given for JSC Bank of Georgia standalone Monthly active digital users Number of transactions thousands millions +39.0% +32.4% +10.1% +12.4% 4.4 58 52 3.9 3.7 47 3.3 41 43 2.9 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 4Q21 1Q22 2Q22 3Q22 4Q22 79% Cu
Slide 19: Payments business – our daily touchpoint with customers
Payments business – our daily touchpoint with customers Figures given for JSC Bank of Georgia standalone Acquiring - volume of payment transactions Issuing – payment MAU GEL millions thousands +52.8% +33.0% +16.5% +11.8% 3,223 1,040 2,766 2,291 1,000 930 2,109 767 1,922 883 641 723 812 617 782 1,999
Slide 20: Fostering a customer-centric culture
Fostering a customer-centric culture Figures given for JSC Bank of Georgia standalone NPS* 60 Engaging with customers proactively and responding in real 58 55 54 time 52 49 47 Anticipating customer needs, wants, and future behavior 46 42 43 39 38 Harnessing strong human relationships with data analy
Slide 21: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q22 AND FY22 RESULTS 21
Slide 22: Financial highlights
Financial highlights 4Q FY 33.7% ROE 32.4% Loans 31 Dec 2022 GEL 16.9bn +4.3% y-o-y +12.9% y-o-y 0.9% Cost of credit risk ratio 0.8% +4.3% q-o-q +4.8% q-o-q On a constant currency basis 31.0% Cost to income ratio 32.0% Deposits 31 Dec 2022 GEL 18.3bn +30.1% y-o-y +43.2% y-o-y +6.2% q-o-q +8.5% q-o-q
Slide 23: Strong underlying performance
Strong underlying performance All currency data are in GEL m unless otherwise stated Net non-interest income* Operating income* +129.2% +99.1% +54.2% +46.6% +8.1% +11.1% 820 250 36 585 2,002 231 527 214 1 27 495 7 396 250 820 466 379 231 1,366 214 151 125 412 124 126 109 124 412 109 1 70 11 64 109 3
Slide 24: Investing for growth while maintaining the focus on efficiency
Investing for growth while maintaining the focus on efficiency All currency data are in GEL m unless otherwise stated Operating expenses Cost to income ratio* +20.1% +26.2% +12.6% 181 641 1 4 161 161 151 32 508 111 39.8% 1 1 1 138 37.2% 28 27 4 25 2 35.0% 94 164 25 55 37 38 32.5% 32.0% 44 34 130 30.
Slide 25: Increased deposits reflecting the strength of our franchise
Increased deposits reflecting the strength of our franchise All currency data are in GEL m unless otherwise stated Loan portfolio Deposit portfolio +4.3% +30.1% +12.9% +43.2% +6.2% +4.3% +8.5% +4.8% 18,261 16,862 17,193 16,169 16,289 16,300 16,163 14,517 15,100 14,038 7,659 8,007 11,569 8,820 8,715
Slide 26: Increase in NIM driven by higher loan yield
Increase in NIM driven by higher loan yield Net interest margin Loan yield, cost of funds, cost of deposits 12.0% 11.5% 11.1% 11.4% 11.6% 11.0% 10.6% 5.7% 5.4% 5.3% 5.3% 5.3% 5.3% 4.9% 4.8% 5.0% 5.2% 4.9% 4.9% 4.6% 4.6% 3.5% 3.7% 3.7% 3.6% 3.4% 3.6% 3.6% 4Q21 1Q22 2Q22 3Q22 4Q22 FY21 FY22 4Q21 1Q22
Slide 27: High quality loan portfolio
High quality loan portfolio All currency data are in GEL m unless otherwise stated Cost of credit risk ratio Loan portfolio quality NPL coverage 95.5% 97.3% 89.6% 89.4% 66.4% 1.0% 0.9% 0.8% NPL coverage adjusted for collateral value 0.8% 0.6% 147.7% 153.0% 138.0% 138.0% 128.9% 0.0% -0.2% 4Q21 1Q22 2
Slide 28: Robust bottom-line growth and profitability
Robust bottom-line growth and profitability All currency data are in GEL m unless otherwise stated Profit (adjusted)* ROE* +62.4% +55.7% 32.8% 33.7% 32.4% +12.3% 32.4% 30.7% 1,132 26.4% 25.8% 326 275 290 241 727 201 4Q21 1Q22 2Q22 3Q22 4Q22 FY21 FY22 4Q21 1Q22 2Q22 3Q22 4Q22 FY21 FY22 Profit (report
Slide 29: Continued strong capital generation
Continued strong capital generation Figures given for JSC Bank of Georgia standalone Evolution of capital ratios during 4Q22 Minimum Capital Potential impact 30 Sep 4Q22 Business Currency Capital 31 Dec requirement facility of a 10% GEL 2022 profit growth impact distribution 2022 (31 Dec devaluation
Slide 30: Continued strong capital generation
Continued strong capital generation Figures given for JSC Bank of Georgia standalone Capital adequacy ratios and minimum requirements Risk-weighted assets +12.8% 20.3% +4.5% 19.7% 19.8% 19.8% 19.3% 1.6% 2.1% 2.3% 3.0% 2.6% 17.0% 16.4% 16.7% 20,279 15.0% 15.4% 14.8% 14.7% 13.7% 1.3% 14.0%2.4% 3.2% 2.
Slide 31: Strong liquidity position
Strong liquidity position Liquidity coverage and net stable Net loans to customer funds and DFIs funding ratios JSC Bank of Georgia standalone (Basel III liquidity) 115.2% 132.5% 132.4% 131.9% 112.2% 130.7% 130.6% 130.9% 107.9% 124.0% 100.0% 121.4% 97.9% 95.5% 94.0% 92.3% 116.2% 113.5% 84.5% 83.8% D
Slide 32: Track record of strong performance
Track record of strong performance 32.4% 27.0% ROE* 26.4% 26.1% 25.8% Loan book YoY 21.4% growth 18.9% 19.8% 20%+ 13.0% c.10% 19.0% 22.0% 12.9% 13.9% 10.2% 4.3% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Nominal Constant currency basis PAYOUT 36% 33% 34% 32% 30% 30% 35%** 37%** RATIO: 600 539
Slide 33: Thank you
THANK YOU 33