Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q2 2023 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Aug 18, 2023
Slide 1: Results Call Presentation 2Q23 & 1H23 Performance
RESULTS CALL PRESENTATION 17 August 2023 2Q23 & 1H23 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 2Q23 and 1H23
The Group delivered a strong performance in 2Q23 and 1H23 Highlights of the quarter June 2023 Profit ROE C/I GEL 387m 34.6% 26.9% up 40.6% y-o-y NPS MAU Highlights of the half year 61 1.2m+ up 27.3% y-o-y Profit ROE C/I GEL 689m 31.3% 27.9% up 33.5% y-o-y GEL 3.06/ordinary share interim dividend dec
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q23 AND 1H23 RESULTS 4
Slide 5: Robust economic growth persisted in 1H23, improved outlook for the year
Robust economic growth persisted in 1H23, contributing to an improved outlook for the entire year Real GDP y-o-y growth Key drivers of growth in 1H23: Resilient inflows from exports and tourism: 2011-2022 Export of goods increased 14.8% y-o-y 2021 2022 1H23 2023F 2024F average (+19.3% in 1H23) 4
Slide 6: Strong external inflows underpinning economic growth
Strong external inflows underpinning economic growth 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% 1.6 1.6 1.5 40% 4.0 3.6 3.7 40% 1.2 30% 3.0 30% 0.8 14.8% 20% 2.0 20% 11.8% 0.4 10% 1.0 10% 0.0 0% 0.0 0% -0.4 -10% -1.0
Slide 7: Inflation continued to fall on high base, lower commodity prices and strong GEL
Inflation continued to fall on the back of last year’s high base, declining commodity prices and strong GEL The NBG proceeds with a gradual exit from tight monetary policy Monetary policy rate Annual CPI inflation Inflation target 16% 16% Consistent reduction in global commodity Annual 5-year Jun-
Slide 8: GEL supported by sustained FX inflows, tight monetary policy and improved sentiments
GEL supported by sustained FX inflows, tight monetary policy and improved sentiments Currency movements vs. US$, 12/31/2022 – 7/31/2023 6.3% 3.7% 3.3% 2.6% 2.0% 0.0% -0.2% -0.5% -3.3% -24.6% -44.0% GEL remained strong in the first half of the year gaining an additional 2.6% against the US dollar d
Slide 9: Growing international reserves cushion the economy against external shocks
Growing international reserves cushion the economy against external shocks Gross international reserves above The NBG keeps purchasing hard US$ 5.0 bn as at end of June 2023 currency amid strong external inflows Gross international reserves in US$ bn, end of period Central bank’s interventions, net
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 flattened after significant decreases in previous years
Debt-to-GDP ratios flattened after significant decreases in previous years 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% 60.2% 64.8% 62.4%6
Slide 12: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q23 AND 1H23 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 7.7 bn Net loans: GEL 5.5 bn MAU: 1,698K MAU: 3K Retail digital banking leader in Georgia 31% 44% Top of mind and the most trusted bank in Georgia 25% Consisten
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 70.3% 71.9% 1,671 1,698 68.7% 1,632 +13.8% 1,492 1,546 y-o-y 64.3% 65.0% 1,174 1,221 1,121 +27.3% 959 1,005 y-o-y
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 lending • Offers from partner merchants • Pre-approved credit limits • Buy now, pay later • Fully online credit card Daily banking • Transactions Savings NEW • Payments • End-to en
Slide 17: Focusing on increasing product sales in digital channels
Focusing on increasing product sales in 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 55.7% 57.5% 60.2% 62.6% 63.9% digital product 38.6% 37.9% 45.2% 44.1% 42.5% tran
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 +38.3% +24.3% +8.3% +15.0% 4.4 4.6 65 58 60 3.9 4.0 52 3.7 47 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 2Q22 3Q22 4Q22 1Q23 2Q23 88% Cus
Slide 19: Payments business – our daily touch point with customers
Payments business – our daily touch point with customers Figures given for JSC Bank of Georgia standalone Acquiring - volume of payment transactions Issuing – payment MAU GEL millions thousands +51.4% +27.6% +15.9% +4.0% 3,469 1,083 1,126 3,223 1,040 2,994 883 930 2,766 1,150 2,291 1,000 767 996 641
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 time 55 54 52 49 Anticipating customer needs, wants, and future behavior 46 47 42 43 39 38 Harnessing strong human relationships with data
Slide 21: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 2Q23 AND 1H23 RESULTS 21
Slide 22: Financial highlights of 2Q23 and 1H23
Financial highlights of 2Q23 and 1H23 2Q23 1H23 34.6% ROE 31.3% Net loans 30 Jun 2023 GEL 18.3bn +12.2% y-o-y +17.6% y-o-y 0.8% Cost of credit risk ratio 0.9% +7.6% q-o-q +6.4% q-o-q On a constant currency basis 26.9% Cost to income ratio 27.9% Deposits 30 Jun 2023 GEL 19.6bn +30.1% y-o-y +38.1% 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* +34.8% +38.2% +26.9% +37.0% +18.4% +41.6% 271 1,231 667 250 463 231 585 564 214 27 1 82 527 891 463 192 91 495 271 7 338 9 250 192 8 231 338 151 125 71 171 214 126 100 190
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* +11.5% +14.8% +9.3% 181 179 344 161 161 1 164 1 2 1 1 32 1 30 299 58 33.6% 28 27 28 2 52 32.5% 46 37 38 55 39 85 30.6% 31.0% 71 29.1% 27.9% 2
Slide 25: Loan growth picked up, and deposit growth remains strong
Loan growth picked up, and deposit growth remains strong All currency data are in GEL m unless otherwise stated Loan portfolio Deposit portfolio +12.2% +30.1% +17.6% +38.1% +7.3% +7.6% +5.9% +6.4% 19,647 18,282 18,261 18,310 16,300 16,163 16,862 16,993 17,193 15,100 8,487 11,011 7,659 8,007 7,895 11
Slide 26: Increase in NIM driven by higher loan yield and lower cost of funds
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% 11.6% 12.0% 11.3% 11.4% 6.6% 6.5% 6.4% 5.7% 5.3% 5.2% 4.9% 4.8% 5.1% 5.3% 5.3% 4.6% 4.5% 4.6% 3.7% 3.6% 3.6% 4.1% 3.7% 3.8% 3.4% 2Q22 3Q22 4Q22 1Q23 2
Slide 27: Healthy loan quality portfolio
Healthy loan quality portfolio All currency data are in GEL m unless otherwise stated Cost of credit risk ratio Loan portfolio quality NPL coverage 89.6% 89.4% 66.4% 72.8% 70.4% 1.0% 1.0% 0.9% NPL coverage adjusted for the discounted value of collateral 0.9% 0.8% 0.7% 0.6% 138.0% 138.0% 128.9% 128.7
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* +40.6% +33.5% +28.6% 689 33.7% 34.6% 31.8% 31.3% 32.8% 32.4% 516 27.9% 387 275 290 326 301 2Q22 3Q22 4Q22 1Q23 2Q23 1H22 1H23 2Q22 3Q22 4Q22 1Q23 2Q23 1H22 1H23 Profit (reported
Slide 29: Strong capital position at Bank of Georgia
Strong capital position at Bank of Georgia Figures given for JSC Bank of Georgia standalone Evolution of capital ratios during 2Q23 Capital Minimum Potential impact 31 March 2Q23 Business Currency Capital 30 June facility requirement of a 10% GEL 2023 profit growth impact distribution 2023 devaluati
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) 132.4% 131.9% 107.9% 130.6% 130.9% 129.8% 130.1% 128.2% 121.4% 95.5% 94.0% 92.3% 92.8%
Slide 31: Track record of growth and strong performance
Track record of growth and strong performance 32.4% 31.3% 26.1% 25.8% 1600 61 64 ROAE 58 55 1400 1200 46 1,132 1,121 1,221 54 13.0% 20%+ 44 37 1000 853 34 800 699 727 689 2019 2020 2021 2022 1H23 24 600 514 519 27.0% 14 400 295 18.9% 19.8% 22.0% 17.6% Loan book YoY 200 4 12.9% growth 0 2019 2020 202
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% 2.5 600 529 1.8 25% Interim 500 dividends/ 188 20% buyback 400 300 257
Slide 33: Thank you
THANK YOU 33