Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q4 2023 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Mar 18, 2024
Slide 1: Results Call Presentation 4Q23 & FY23 Performance
RESULTS CALL PRESENTATION 15 March 2024 4Q23 & FY23 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 4Q23 and FY23
The Group delivered a strong performance in 4Q23 and FY23 Highlights of the quarter December 2023 Profit ROE C/I GEL 329m 26.7% 34.3% up 0.8% y-o-y NPS MAU Highlights of the year 59 1.4m up 21.0% y-o-y Profit ROE C/I GEL 1,375m 29.9% 29.8% up 21.4% y-o-y Due to the settlement of a legacy claim, the
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q23 AND FY23 RESULTS 4
Slide 5: Robust economic growth persisted in 2023
Robust economic growth persisted in 2023 as slowing external demand was substituted by stronger domestic spending Real GDP y-o-y growth Key growth drivers in 2023: Robust domestic demand driven by strong investment and consumption spending 2011-2022 2021 2022 2023 2024F 2025F average Increased a
Slide 6: Solid external sector inflows in 2023
Solid external sector inflows in 2023 despite recent slowdown from the previous 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% 3.98 4.11 1.50 1.55 1.49 3.88 1.6 40% 4.0 40% 1.2 30% 3.0 30% 0.8 20% 2.0 20%
Slide 7: Improving inflation outlook enabling central bank rate cuts
Steady improvements in the inflation outlook enabling the central bank to continue cutting interest rate Inflation and monetary policy rate Monetary policy rate Annual CPI inflation Inflation target 16% 16% 5-year 14% Annual Jan-24 Feb-24 14% average Inflation is expected to remain low amid Headli
Slide 8: GEL supported by sustained FX inflows
GEL supported by sustained FX inflows Currency movements vs. US$, 12/31/2022 – 2/29/2024 4.8% 2.4% 1.6% 1.5% -0.2% -2.4% -3.5% -11.2% -23.6% -29.7% -66.7% Despite some interim volatility, GEL remained broadly unchanged against USD in 2023, after a 12.5% appreciation in 2022 In the medium term, G
Slide 9: High international reserves cushion the economy against external shocks
Adequately high international reserves cushion the economy against external shocks Gross reserves increased by US$102 m in In 4Q23, the NBG discontinued hard 2023, while net reserved were up US$ 623 m currency purchases as FX inflows slowed Gross international reserves, USD bn Central bank’s interve
Slide 10: Healthy banking sector, with dollarisation down to historically low levels
Healthy banking sector, with dollarisation down to historically low levels Bank loan book growth vs. nominal Loan and deposit dollarisation Non-performing bank loans to total gross GDP growth loans in selected countries, Sep-2023 Nominal GDP growth, y-o-y Bank loan dollarisation Lithuania 0.5% Eston
Slide 11: Private debt-to-GDP picked up while public debt-to-GDP decreased
In 2023, private debt-to-GDP picked up gradually amid healthy lending growth, while public debt-to-GDP decreased further 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 pub
Slide 12: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q23 AND FY23 RESULTS 12
Slide 13: Who we are
Who we are A FTSE-250 company with a diversified Corporate and institutional investor base. Retail Banking Investment Banking Net loans: GEL 8.5bn Net loans: GEL 6.5bn MAU: 1,809K MAU: 4K Retail digital banking leader in Georgia 33% 44% Top of mind and the most trusted bank in Georgia 23% Consistent
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 have become more digital and engaged
Our retail customers have become more digital and engaged Figures given for JSC Bank of Georgia standalone Monthly active users (Retail) Digital engagement of active customers thousands 1,809 75.0% 1,739 71.9% 72.6% 1,632 1,671 1,698 +10.8% 68.7% 70.3% y-o-y 1,357 1,221 1,263 1,121 1,174 +21.0% 50.9
Slide 16: Developing our financial super app
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 • Pre-approved credit limits • Gift cards • Fully online credit card Daily banking • Transactions Savings NEW • Payment
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 60.2% 62.6% 63.9% 65.5% 68.0% products sold 45.2% 44.1% 42.5% 47.1% 70.3%
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 +28.6% +25.5% +7.4% +12.4% 74 5.5 69 65 4.9 4.6 58 60 4.4 4.0 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 4Q22 1Q23 2Q23 3Q23 4Q23 89% Cus
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 +38.2% +20.1% +10.1% +7.6% 4,455 1,249 4,047 1,161 1,126 2,994 3,469 1,083 3,223 1,648 1,040 1,383 1,150 1,
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 59 time 55 54 52 49 Anticipating customer needs, wants, and future behavior 46 47 42 43 39 38 Harnessing strong human relationships wit
Slide 21: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 4Q23 AND FY23 RESULTS 21
Slide 22: Financial highlights of 4Q23 and FY23
Financial highlights of 4Q23 and FY23 4Q23 FY23 26.7% ROE 29.9% Net loans 31 Dec 2023 GEL 20.2bn +20.0% y-o-y +19.6% y-o-y 0.4% Cost of credit risk ratio 0.7% +6.4% q-o-q +5.5% q-o-q On a constant currency basis 34.3% Cost to income ratio 29.8% Deposits 31 Dec 2023 GEL 20.5bn +12.4% y-o-y +12.2% 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* +12.4% +26.4% -8.3% +11.6% +2.3% +3.2% 271 915 667 2,530 642 657 250 820 230 115 585 564 222 36 2,002 27 82 6 18 271 222 230 915 192 192 9 366 250 820 98 97 466 125 71 100
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* +24.4% +17.6% +21.5% 225 754 5 34.3% 2 641 125 181 185 35 32.0% 179 4 1 164 1 1 111 31.0% 31 29.8% 32 1 30 205 28 74 29.1% 28.8% 164 46 46 26
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 +20.0% +12.4% +19.6% +12.2% -5.6% +6.4% -6.3% +5.5% 21,744 20,523 19,011 20,233 19,647 18,282 18,261 18,310 16,862 16,993 9,394 11,716 8,487 8,785 11,011 11,693 8,007 7,895
Slide 26: The y-o-y increase in NIM in FY23 was driven by higher loan yield
The y-o-y increase in NIM in FY23 was driven by higher loan yield and lower cost of funds Net interest margin Loan yield, cost of funds, cost of deposits 12.7% 12.5% 12.5% 12.6% 12.4% 11.5% 12.0% 6.6% 6.6% 6.5% 6.4% 6.3% 5.7% 5.4% 4.6% 4.5% 4.8% 4.7% 4.9% 4.9% 4.7% 4.1% 4.2% 4.2% 4.0% 3.4% 3.6% 3.6%
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 66.4% 72.8% 70.4% 69.1% 69.2% 1.0% 0.8% NPL coverage adjusted for the discounted value of collateral 0.9% 0.8% 0.7% 0.6% 128.9% 128.7% 126.4% 122.1% 117.6% 0.4%
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* +0.8% +21.4% 33.7% 34.6% 32.4% -8.1% 30.7% 29.9% 1,132 1,375 27.9% 26.7% 387 357 326 301 329 4Q22 1Q23 2Q23 3Q23 4Q23 FY22 FY23 4Q22 1Q23 2Q23 3Q23 4Q23 FY22 FY23 Profit (report
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 4Q23 Capital Minimum Buffer above Potential impact 30 Sep 4Q23 Business Currency Capital 31 Dec facility requirement m
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% 132.4% 131.9% 129.8% 130.1% 130.4% 128.2% 125.2% 98.6% 92.3% 92.8% 93.1
Slide 31: Track record of growth and strong performance
Track record of growth and strong performance 32.4% 29.9% 26.1% 25.8% 1600 58 59 62 ROAE 55 20%+ 1400 1,375 1,357 52 46 13.0% 1200 1,132 1,121 37 42 1000 853 32 800 727 2019 2020 2021 2022 2023 699 22 600 514 519 27.0% 12 400 20.0% 295 18.9% 19.8% 22.0% Loan book YoY 2 200 19.6% growth 12.9% 0 2019
Slide 32: Returning capital to shareholders
Returning capital to shareholders Capital distribution Number of shares outstanding (period-end)** GEL millions millions PAYOUT 36% 33% 34% 32% 30% 30% 35% 37% 37% RATIO:* 49.2 49.2 49.2 47.5 535 514 2.0 1.6 2.3 45.8 2.5 2.2 188 162 This includes a final dividend of 257 GEL 4.94 per 47.2 47.5 46.9 s
Slide 33: Thank you
THANK YOU 33