Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q3 2023 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Nov 16, 2023
Slide 1: Investor Presentation 3Q23 & 9M23 Performance
INVESTOR PRESENTATION 14 November 2023 3Q23 & 9M23 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: The Group delivered a strong performance in 3Q23 and 9M23
The Group delivered a strong performance in 3Q23 and 9M23 Highlights of the quarter September 2023 Profit ROE C/I GEL 357m 30.7% 28.8% up 23.1% y-o-y NPS MAU Highlights of the first nine months 59 1.3m up 25.6% y-o-y Profit ROE C/I GEL 1,046m 31.1% 28.2% up 29.8% y-o-y Profit, ROAE and Cost:income o
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q23 AND 9M23 RESULTS 4
Slide 5: Strong economic growth persisted in the first nine months of the year
Strong economic growth persisted in the first nine months of the year Real GDP y-o-y growth Key drivers of growth in 3Q23: Robust inflows from tourism and exports, increasing from last year’s high base: 2011-2022 2021 2022 9M23 2023F 2024F average Tourism revenues up 5.3% y-o-y (+29.2% 4.7% 10.5
Slide 6: Solid external inflows despite recent slowdown given last year's high base
Solid external inflows despite recent slowdown given last year’s high base Export of goods Import of goods Export of goods, US$ bn % change y-o-y Import of goods, US$ bn % change y-o-y 2.0 50% 5.0 50% 1.5 1.6 1.6 3.9 3.9 1.6 40% 4.0 3.6 40% 1.2 30% 3.0 30% 0.8 20% 2.0 20% 7.9% 0.4 10% 1.0 10% 1.6% 0
Slide 7: Low inflation on the back of falling import prices
Low inflation on the back of falling import prices and decreasing domestic price pressures The NBG continues a gradual exit from tight monetary policy Monetary policy rate Annual CPI inflation Inflation target 16% 16% 5-year 14% Annual Sep-23 Oct-23 14% average Headline CPI 6.9% 0.7% 0.8% Inflatio
Slide 8: GEL supported by sustained FX inflows despite some weakening
GEL supported by sustained FX inflows despite some weakening in recent months Currency movements vs. US$, 12/31/2022 – 10/31/2023 1.2% -0.1% -0.1% -0.2% -1.4% -1.4% -8.8% -25.3% -30.6% -51.1% Despite some weakening in recent months, GEL remained broadly unchanged against USD in the first ten month
Slide 9: Sufficient international reserves cushion the economy against external shocks
Sufficient international reserves cushion the economy against external shocks Gross international reserves above In 3Q23, the NBG decreased hard currency US$ 5bn as at end-September 2023 purchases as external inflows slowed Gross international reserves, USD bn Net international reserves, USD bn Cent
Slide 10: 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 gross GDP growth loans in selected countries, 2022 Nominal GDP growth, y-o-y Bank loan dollarisation Lithuania 0.5% Estonia 0.8% Bank credit growth, y-o
Slide 11: Debt-to-GDP ratios started to pick up gradually
Debt-to-GDP ratios started to pick up gradually on the back of healthy lending growth Banking sector loans to households Public debt as % of GDP and legal entities as % of GDP Household loans to GDP Legal entity loans to GDP Domestic public debt to GDP External public debt to GDP 77.6% 71.8% 64.8% 6
Slide 12: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q23 AND 9M23 RESULTS 12
Slide 13: Who we are
Who we are A FTSE-250 company with a Corporate and diversified institutional investor base Investment Banking Retail Banking Net loans: GEL 8.1bn Net loans: GEL 5.7bn MAU: 1,739K MAU: 4K Retail digital banking leader in Georgia 31% 44% Top of mind and the most trusted bank in Georgia 24% Consistentl
Slide 14: What we focus on
What we focus on Our strategic priorities Mobile Payments Loyalty Relevant in customers’ Increasing customer Growing payments Excellent customer daily lives engagement business experience Our enablers Effective risk Customer-centricity Data and AI People and culture Brand strength management Key med
Slide 15: Our retail customers are becoming more digital and engaged
Our retail customers are becoming more digital and engaged Figures given for JSC Bank of Georgia standalone Monthly active users (Retail) Digital engagement of active customers thousands 71.9% 72.6% 1,739 68.7% 70.3% 1,671 1,698 1,632 +12.5% 65.0% 1,546 y-o-y 1,221 1,263 1,121 1,174 +25.6% 1,005 y-o
Slide 16: Developing our financial super app to fulfill a variety of customer needs
Developing our financial super app to fulfill a variety of customer needs Credit Lifestyle • End-to-end online consumer • Offers from partner merchants lending • Buy now, pay later NEW • Pre-approved credit limits • Fully online credit card Daily banking • Transactions Savings NEW • Payments • End-t
Slide 17: 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 Number of transactions* Products sales in digital channels** millions thousands Share of digital Share of channel 57.5% 60.2% 62.6% 63.9% 65.5% products sold 37.9% 45.2% 44.1% 42.5% 47.1%
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 +31.9% +26.1% +6.5% +5.6% 69 4.9 65 4.6 58 60 4.4 3.9 4.0 52 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 3Q22 4Q22 1Q23 2Q23 3Q23 86% Cust
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 +46.3% +24.8% +16.7% +3.1% 4,047 1,161 1,126 3,469 1,083 3,223 1,040 2,994 1,383 2,766 1,150 930 1,000 767
Slide 20: Fostering a customer-centric culture
Fostering a customer-centric culture Figures given for JSC Bank of Georgia standalone NPS* 60 61 Engaging with customers proactively and responding in real 58 58 59 time 55 54 52 49 Anticipating customer needs, wants, and future behavior 46 47 42 43 39 38 Harnessing strong human relationships with d
Slide 21: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q23 AND 9M23 RESULTS 21
Slide 22: Financial highlights of 3Q23 and 9M23
Financial highlights of 3Q23 and 9M23 3Q23 9M23 30.7% ROE 31.1% Net loans 30 Sep 2023 GEL 19.0bn +17.6% y-o-y +19.0% y-o-y 0.6% Cost of credit risk ratio 0.8% +4.0% q-o-q +3.4% q-o-q On a constant currency basis 28.8% Cost to income ratio 28.2% Deposits 30 Sep 2023 GEL 21.7bn +26.5% y-o-y +29.4% y-o
Slide 23: Strong underlying performance
Strong underlying performance All currency data are in GEL m unless otherwise stated Operating income* Net non-interest income* +22.0% +32.2% -3.9% +20.4% -3.7% -18.0% 1,873 271 667 250 685 642 231 585 222 96 564 1,417 685 1 27 82 569 527 192 6 9 271 222 9 250 192 569 268 98 231 151 125 71 341 100 1
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* +15.2% +14.9% +3.3% 181 179 185 529 31.0% 1 30.6% 161 1 164 1 460 3 32 1 30 31 1 3 90 29.1% 28.8% 27 28 79 46 55 46 131 26.9% 38 39 32.5% 110
Slide 25: 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 +17.6% +26.5% +19.0% +29.4% +10.7% +4.0% +9.7% +3.4% 19,011 21,744 18,282 19,647 16,163 16,862 16,993 18,261 18,310 17,193 8,487 8,785 11,716 7,659 8,007 7,895 11,011 11,56
Slide 26: The y-o-y increase in NIM driven by higher loan yield and lower cost of funds
The y-o-y increase in NIM driven by higher loan yield and lower cost of funds Net interest margin Loan yield, cost of funds, cost of deposits 12.6% 12.5% 12.7% 12.6% 11.6% 12.0% 11.4% 6.6% 6.6% 6.5% 6.4% 5.7% 5.3% 4.9% 4.6% 4.8% 4.7% 5.0% 4.7% 5.3% 4.5% 4.1% 4.2% 4.0% 3.6% 3.4% 3.6% 3.6% 3Q22 4Q22 1
Slide 27: Healthy loan portfolio
Healthy loan portfolio All currency data are in GEL m unless otherwise stated Cost of credit risk ratio Loan portfolio quality NPL coverage 89.4% 66.4% 72.8% 70.4% 69.1% 1.0% 1.0% 0.8% 0.8% NPL coverage adjusted for the discounted value of collateral 0.9% 0.8% 0.6% 138.0% 128.9% 128.7% 126.4% 122.1%
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* +23.1% +29.8% 33.7% 34.6% 32.0% -7.8% 32.4% 31.1% 30.7% 1,046 27.9% 387 357 806 290 326 301 3Q22 4Q22 1Q23 2Q23 3Q23 9M22 9M23 3Q22 4Q22 1Q23 2Q23 3Q23 9M22 9M23 Profit (reporte
Slide 29: Strong capital position at Bank of Georgia
Strong capital position at Bank of Georgia Figures given for JSC Bank of Georgia standalone All currency data are in GEL m unless otherwise stated Evolution of capital ratios during 3Q23 Minimum Capital Buffer above Potential impact 30 June 3Q23 Business Currency Capital 30 Sep requirement facility
Slide 30: Strong liquidity position
Strong liquidity position Figures given for JSC Bank of Georgia standalone Liquidity coverage and net stable Net loans to customer funds and DFIs funding ratios* JSC Bank of Georgia standalone (Basel III liquidity) 135.7% 134.5% 130.9% 132.4% 131.9% 129.8% 130.1% 128.2% 121.4% 94.0% 92.8% 93.1% 92.3
Slide 31: Track record of growth and strong performance
Track record of growth and strong performance 32.4% 31.1% 26.1% 25.8% 1600 58 59 62 ROAE 55 1400 1200 46 1,132 1,121 1,263 52 13.0% 20%+ 37 1,046 42 1000 853 32 800 727 2019 2020 2021 2022 9M23 699 22 600 514 519 27.0% 12 400 295 18.9% 19.8% 19.0% 22.0% Loan book YoY 2 200 12.9% growth 17.6% 0 2019
Slide 32: Returning capital to shareholders
Returning capital to shareholders Capital distribution* Number of shares outstanding (period-end)*** GEL millions millions 800 PAYOUT RATIO:** 36% 33% 34% 32% 30% 30% 35% 37% 35% 49.2 49.2 49.2 49.2 700 47.5 1.5 2.0 1.6 2.3 45.9 30% 2.5 600 535 2.1 25% 500 Interim 188 dividends/ 400 20% buyback 300
Slide 33: Thank you
THANK YOU 33