Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q2 2024 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Aug 22, 2024
Slide 1: Results Call Presentation 2Q24 & 1H24 Performance
RESULTS CALL PRESENTATION 22 August 2024 2Q24 & 1H24 Performance www.bankofgeorgiagroup.com
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: Strong 1H24 performance, further enhanced by Ameriabank consolidation
Strong 1H24 performance, further enhanced by Ameriabank consolidation Highlights of the quarter Profit ROAE C/I GEL 430m 28.0% 35.6% up 11.0% y-o-y GEL 3.38/ordinary share interim dividend declared Highlights of the first half of the year Share buyback and cancellation programme GEL 73.4 million Pro
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q24 AND 1H24 RESULTS 4
Slide 5: Georgian and Armenian economies maintain strong growth
Georgian and Armenian economies maintain strong growth fueled by robust consumption spending and resilient external demand Economic growth in Georgia Economic growth in Armenia Nominal GDP per capita, US$ Real GDP growth, year-on-year Nominal GDP per capita, US$ Real GDP growth, year-on-year 12.6% 1
Slide 6: Inflation remains low allowing central banks to continue easing
Both in Georgia and Armenia, inflation remains low allowing the central banks to continue easing the monetary policy Inflation and monetary policy in Georgia Inflation and monetary policy in Armenia Monetary policy rate CPI inflation, year-on-year Monetary policy rate CPI inflation, year-on-year 15%
Slide 7: Robust consumption spending supported by improved labor market conditions
Robust consumption spending in Georgia and Armenia has been supported by improved labor market conditions Labor market conditions in Georgia Labor market conditions in Armenia 2023 1Q24 2Q24 2023 1Q24 Unemployment rate 16.4% 14.0% 13.7% Unemployment rate 12.6% 15.5% Participation rate 53.3% 55.0% 54
Slide 8: External sector inflows normalising, import of goods remains strong
In Georgia and Armenia, external sector inflows are normalising, while import of goods remains strong due to robust consumption Main sources of external sector inflows and Main sources of external sector inflows and outflows in Georgia, US$ bn outflows in Armenia, US$ bn Export of goods Net money tr
Slide 9: Service exports continue to expand in Georgia and Armenia
Service exports continue to expand in Georgia and Armenia, boosting productivity and creating a resilient source of hard currency inflows Export of services from Georgia, US$ bn. Export of services from Armenia, US$ bn. Travel Transport IT Other % of GDP Travel Transport IT Other % of GDP 26.1% 26.5
Slide 10: GEL and AMD supported by sustained FX inflows
GEL and AMD supported by sustained FX inflows and strong economic growth outlooks Currency movements vs. US$, GEL and AMD real effective exchange 12/31/2023 – 8/20/2024 rates, Jan-2014 = 100 GEL AMD 240 230 224.6 220 210 4.1% 1.8% 0.9% 0.2% 0.0% 0.0% 200 190 -0.1% -2.4% -5.3% -8.7% -14.3% 180 170 16
Slide 11: Solid international reserves and demonstrated fiscal discipline
Solid international reserves and demonstrated fiscal discipline underpinning the resilience of the Georgian and Armenian economies International reserves in Georgia, International reserves in Armenia, end of period end of period Net international reserves, US$ bn Gross international reserves, US$ bn
Slide 12: Georgian and Armenian banking sectors are sound
Georgian and Armenian banking sectors are sound, with robust growth and declining dollarisation Bank lending growth on a constant Total bank loan dollarisation Non-performing bank loans to total gross currency basis, y-o-y loans, end-March 2024 or latest available Georgia Armenia Georgia Armenia Lit
Slide 13: Bank loans-to-GDP ratio is lower in Armenia
Bank loans-to-GDP ratio is lower in Armenia, indicating more room for healthy credit expansion Bank loans as % of GDP in Georgia Bank loans as % of GDP in Armenia Household loans to GDP Household loans to GDP Legal entity loans to GDP Legal entity loans to GDP Non-resident loans to GDP Non-resident
Slide 14: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q24 AND 1H24 RESULTS 14
Slide 15: What we focus on
What we focus on Our strategic priorities The main bank Excellent customer experience Profitable growth Being the main bank in Anticipating customer needs Growing the balance sheet customers’ daily lives by and wants and providing profitably and focusing on areas leveraging the digital and relevant
Slide 16: Our award-winning financial apps
Our award-winning financial apps Retail Financial SuperApp Business Mobile App Daily banking Daily banking Bill split, money request, automatic Transfers & payments, packaged transfers, payments, instant P2P payments to treasury payments, card management, payroll other banks, digital cards managemen
Slide 17: Our customers have become more digital and engaged
Our customers have become more digital and engaged Figures given for JSC Bank of Georgia standalone Monthly active retail clients Monthly active business clients thousands thousands 1,898 +11.8% 105 1,809 1,836 +20.4% 1,739 y-o-y 100 y-o-y 1,698 98 1,469 +20.3% 92 1,357 1,405 1,263 y-o-y 87 1,221 82
Slide 18: Focusing on increasing product sales in retail digital channels
Focusing on increasing product sales in retail digital channels Figures given for JSC Bank of Georgia standalone Share of products sold digitally (Retail) Strong digital sales in loans (Retail) Gamification campaign effect 70% 80% 57% 57% Loan digital sales | 2Q24 +13ppts YoY 47% 43% Transactions ar
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 +35.1% +18.7% +17.1% +4.2% 4,455 4,687 1,337 4,047 4,002 3,469 1,283 1,782 1,648 1,249 1,383 1,503 1,150 1,
Slide 20: Record-high NPS thanks to our customer-centric culture
Record-high NPS thanks to our customer-centric culture Figures given for JSC Bank of Georgia standalone NPS* 71 Engaging with customers proactively and responding in real 60 61 61 time 58 58 59 59 55 54 52 Anticipating customer needs, wants, and future behavior 49 46 47 42 43 Harnessing strong human
Slide 21: Digitalisation momentum at Ameriabank underpins upside potential
Digitalisation momentum at Ameriabank underpins huge upside potential Monthly active Customers (Individuals) Digital engagement of active customers thousands 292 296 300 275 +13.4% 265 y-o-y 57% 54% +43.0% 51% 173 y-o-y 49% 160 150 46% 135 121 +55.3% 43% 41% 42% 64 66 72 39% y-o-y 39% 47 53 Jun-23 S
Slide 22: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q24 AND 1H24 RESULTS 22
Slide 23: Strong growth in GFS core revenue, Group enhanced by Ameriabank
Strong growth in GFS core revenue, Group total enhanced by the consolidation of Ameriabank All currency data are in GEL m unless otherwise stated Operating income (Group)* Operating income (GFS)* +42.2% +29.4% +4.8% +9.4% +47.4% +8.2% 1,593 1,289 1,178 1,231 537 428 670 436 949 639 614 632 619 463 3
Slide 24: Strong growth in GFS fees, high base of other income
Strong growth in GFS fees, high base of other income impacting y-o-y growths All currency data are in GEL m unless otherwise stated Net non-interest income (Group)* Net non-interest income (GFS)* +21.9% +16.0% -10.1% -1.7% +60.4% 537 +18.0% 436 428 36 463 19 258 90 91 232 331 242 209 219 28 12 181 2
Slide 25: GFS cost to income ratio below 30%
GFS cost to income ratio below 30% while Group total impacted by the consolidation of Ameriabank in 2Q24 All currency data are in GEL m unless otherwise stated Operating expenses (Group) Cost to income ratio* +88.3% +53.1% +79.7% 526 35.6% 33.0% 34.3% 338 125 29.2% 28.8% 27.9% 344 41 26.9% 32.7% 123
Slide 26: Strong loan and deposit growth dynamics
Strong loan and deposit growth dynamics All currency data are in GEL m unless otherwise stated Loan portfolio Deposit portfolio +64.5% +56.3% +8.6% +8.4% 30,082 30,706 27,699 28,331 7,714 6,851 20,233 6,833 21,744 20,523 6,523 19,011 708 19,647 1,196 18,282 - 706 - 1,125 - 1,064 - 700 - 988 - 673 84
Slide 27: Net interest margin broadly stable
Net interest margin broadly stable, supported by Ameriabank consolidation Net interest margin (Group)* Loan yield, cost of funds, cost of deposits (Group)* 12.7% 12.6% 12.4% 12.4% 12.4% 12.6% 12.4% 6.6% 6.6% 6.5% 6.3% 6.4% 6.3% 6.3% 4.8% 4.7% 4.9% 5.0% 4.8% 4.6% 4.9% 4.1% 4.2% 4.2% 4.2% 4.0% 4.1% 3.
Slide 28: Healthy loan portfolio
Healthy loan portfolio All currency data are in GEL m unless otherwise stated Cost of credit risk ratio (Group)* Loan portfolio quality (Group) NPL coverage** 1.1% 0.9% 70.4% 69.1% 69.2% 72.3% 0.8% 63.7% 0.8% NPL coverage adjusted for the discounted value of collateral** 0.6% 0.4% 0.4% 0.4% 126.4% 1
Slide 29: Strong bottom-line growth and profitability
Strong bottom-line growth and profitability All currency data are in GEL m unless otherwise stated Profit (Group)* ROAE (Group)* 34.6% +11.0% 30.7% 31.3% 31.3% +16.0% 27.7% 30.1% 26.7% +16.5% 28.0% 28.4% 49 2Q23 3Q23 4Q23 1Q24 2Q24 1H23 1H24 799 Initial ECL related to ROAE ROAE adjusted for Ameriaba
Slide 30: Strong capital positions of key operating banks
Strong capital positions of key operating banks (Jun-24) 23.4% 17.8% 20.8% 3.8% 15.3% 15.3% 1.3% 17.0% 4.2% 1.5% 3.6% 2.6% 19.6% 16.5% 16.6% 13.8% 14.4% 11.7% CET1 Tier1 Total CET1 Tier1 Total Min. requirement Buffer above min. requirement Min. requirement Buffer above min. requirement ▪ On 9 April
Slide 31: Strong liquidity positions, well above minimum requirements
Strong liquidity positions, well above the 100% minimum requirements NBG Liquidity NBG Net stable CBA Liquidity CBA Net stable coverage ratio funding ratio coverage ratio funding ratio 128.3% 126.9% 209.7% 125.9% 30 June 2024 30 June 2024 30 June 2024 30 June 2024 31
Slide 32: Creating long-term shareholder value
Creating long-term shareholder value Capital distribution 1H24 dividend and buyback GEL millions Target: 30-50% dividend and buyback payout ratio GEL 3.38 GEL 73.4 million Interim dividend Share buyback and PAYOUT per share cancellation RATIO*: 36% 33% 34% 32% 30% 30% 35% 37% 37% 535 511 188 Total s
Slide 33: Thank you
THANK YOU 33