Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q1 2023 Earnings Presentation
35 slides from Lion Finance's earnings presentation, May 8, 2023
Slide 1: Results Call Presentation 1Q23 Performance
RESULTS CALL PRESENTATION 17 May 2023 1Q23 Performance www.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: The Group delivered a strong performance in 1Q23
The Group delivered a strong performance in 1Q23 Profit ROE C/I NPS Digital MAU GEL 301.3M 27.9% 29.1% 58 1.2M up 25.3% y-o-y up 31.6% y-o-y up 55.7% y-o-y 3
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 1Q23 RESULTS 4
Slide 5: Economic growth remained strong in 1Q23
Economic growth remained strong in 1Q23 Real GDP y-o-y growth 18.0% 2011-2022 2021 2022 1Q23E Key drivers of growth in 1Q23: average 4.7% 10.5% 10.1% 7.2% Resilient inflows from exports, remittances, and tourism Increased activity in construction, transport 14.6% and logistics, trade and hospita
Slide 6: Strong external inflows underpinning economic growth
Strong external inflows underpinning economic growth Export of goods Import of goods Export of goods, US$ m % change y-o-y Import of goods, US$ m % change y-o-y 800 80% 1,600 80% 1,235 600 547 60% 1,200 60% 33% 800 40% 400 33% 40% 400 20% 200 20% 0 0% 0 0% -400 -20% Jan-22 Jun-22 Oct-22 Jan-23 Feb-2
Slide 7: Economic growth expected to moderate to sustainable levels
Economic growth expected to moderate to sustainable levels Georgia’s economic growth forecast 10.5% 10.1% In 2023, real GDP growth is expected to moderate to 5.8% considering the base effect 7.4% after two consecutive years of double-digit 6.4% growth 4.8% 4.8% 5.0% The main drivers of growth ar
Slide 8: Inflation decreased sharply; NBG started gradual exit from tight policy
Inflation decreased sharply due to reduction in global commodity prices and GEL appreciation The NBG started a gradual exit from tight monetary policy Monetary policy rate Annual CPI inflation 16% 16% 5-year Recent reduction in global commodity prices 14% Annual Mar-23 Apr-23 14% average and GEL a
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$, 12/31/2022 – 4/30/2023 7.6% 6.3% 2.9% 2.3% 2.0% 0.0% -0.2% -0.5% -1.4% -3.9% -9.2% GEL appreciated by an additional 7.6% against the US dollar during 4M23 on top of a 12.5% appreciation in 2022 The apprec
Slide 10: International reserves and NBG net FX purchases
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 Mar-16 Source: IMF, NBG, BOG Jun-16 Reserve adequacy Sep-16 ARA metric* Dec-16 Mar-17 Jun-17 Sep-17 2019 94.3% Dec-17 Mar-18 Jun-18 external shocks Sep-18 International reserves Dec-18 2020 100.2% Mar-19 Jun-19 *A ra
Slide 11: Healthy banking sector, with reduced dollarisation
Healthy banking sector, with reduced dollarisation Bank loan book growth vs. nominal Loan and deposit dollarisation Non-performing bank loans to total gross GDP growth loans in selected countries, end-2022 Nominal GDP growth, y-o-y Bank loan dollarisation Lithuania 0.5% Bank credit growth, y-o-y Ban
Slide 12: Debt burden continues to decrease both in private and public sectors
Debt burden continues to decrease both in private and public sectors 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
Slide 13: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 1Q23 RESULTS 13
Slide 14: 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 7.4 bn Net loans: GEL 4.9 bn MAU: 1,671K MAU: 3K Retail digital banking leader in Georgia Top of mind and the most trusted bank in Georgia Consistently deliveri
Slide 15: What we focus on
What we focus on Our strategic priorities Mobile Payments Loyalty Becoming increasingly Further improving Harnessing the Continuing to deliver an relevant in our customer engagement potential of our excellent customer customers’ daily lives across all business payments business experience through ou
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 • Payments • End-to end on
Slide 17: 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 1,632 1,671 +16.9% 1,546 68.7% 70.3% 1,492 y-o-y 1,429 64.3% 65.0% 62.4% 1,121 1,174 +31.6% 959 1,005 y-o-y 892 4
Slide 18: 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 +43.0% -15.0% 90.2 88.1 76.6 80.7 3.2 700 100.0% 2.6 626 2.7 12.0 11.0 65.7 2.7 11.5 600 90.0% 11.2 532 80.0% 2.2 22.4 20.8 9.0 21.5 500 70.
Slide 19: 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 +40.4% +37.9% +4.7% -9.1% 60 4.4 58 4.0 3.7 3.9 52 47 2.9 43 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 1Q22 2Q22 3Q22 4Q22 1Q23 84% Cust
Slide 20: 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 +55.7% +33.3% -7.1% +4.1% 3,223 1,083 2,994 1,040 2,766 930 1,000 883 2,291 812 767 996 1,922 641 617 1,99
Slide 21: 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 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 an
Slide 22: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 1Q23 RESULTS 22
Slide 23: Financial highlights of 1Q23
Financial highlights of 1Q23 27.9% 1.0% 29.1% 19.5% Minimum requirement 14.5% Cost of credit risk Cost to income ROE CET1 capital ratio ratio GEL 17.0bn GEL 18.3bn Loans Deposits +4.3% y-o-y +15.1% y-o-y +26.1% y-o-y +42.4% y-o-y +3.0% q-o-q +3.3% q-o-q +0.8% q-o-q On a constant currency basis +0.3%
Slide 24: Strong underlying performance
Strong underlying performance All currency data are in GEL m unless otherwise stated Net non-interest income* Operating income* +54.2% +42.4% -23.4% -3.7% 250 585 564 231 527 214 1 27 495 7 192 250 192 9 396 231 125 214 151 124 126 71 124 1 64 372 335 271 281 295 112 98 81 80 59 1Q22 2Q22 3Q22 4Q22
Slide 25: 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* +18.7% -9.3% 181 161 161 1 164 1 1 32 1 35.0% 138 28 28 27 2 32.5% 25 55 30.6% 31.0% 37 38 39 29.1% 34 95 95 94 96 78 1Q22 2Q22 3Q22 4Q22 1Q2
Slide 26: 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 +4.3% +26.1% +15.1% +42.4% +0.3% +0.8% +3.3% +3.0% 16,289 16,300 16,163 16,862 16,993 18,261 18,310 17,193 14,517 15,100 8,007 7,895 8,715 8,347 7,659 11,5
Slide 27: 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 6.4% 12.5% 11.6% 12.0% 11.1% 11.4% 5.7% 5.3% 5.3% 5.3% 5.0% 5.2% 4.9% 4.6% 4.5% 3.7% 3.7% 3.6% 3.4% 3.6% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Loan yield Co
Slide 28: 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 97.3% 89.6% 89.4% 66.4% 72.8% 1.0% 0.9% 1.0% NPL coverage adjusted for the discounted value of collateral 0.8% 0.6% 153.0% 138.0% 138.0% 128.9% 128.7% 1
Slide 29: Robust bottom-line growth and profitability
Robust bottom-line growth and profitability All currency data are in GEL m unless otherwise stated Profit ROE +25.3% 32.8% 33.7% -7.5% 32.4% 30.7% 27.9% 326 290 301 275 241 1Q22 2Q22 3Q22 4Q22 1Q23 ROA 4.5% 4.4% 4.7% 4.4% 4.1% 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 *4Q22 figures adjusted
Slide 30: 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 1Q23 Capital Minimum Potential impact 31 Dec 1Q23 Business Currency Capital 31 March facility requirement of a 10% GEL 2022 profit growth impact distribution 2023 devaluatio
Slide 31: Strong capital position continued
Strong capital position continued Figures given for JSC Bank of Georgia standalone All currency data are in GEL m unless otherwise stated Capital adequacy ratios and minimum requirements Risk-weighted assets 31 March 2023 -2.2% 23.3% 21.4% 20,067 19.5% Min. requirement 3.6% 19,629 4.6% Min. requirem
Slide 32: Excellent levels of liquidity
Excellent levels of liquidity 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% 112.2% 130.7% 130.6% 130.9% 129.8% 130.1% 107.9% 121.4% 116.2% 113.5
Slide 33: Track record of growth and strong performance
Track record of growth and strong performance 32.4% 27.9% 26.1% 25.8% ROAE 1,500 58 55 60 1,300 46 1,132 1,121 50 13.0% 20%+ 1,100 37 853 40 900 699 727 700 30 2019 2020 2021 2022 1Q23 514 519 500 295 20 27.0% 300 10 18.9% 19.8% 100 22.0% Loan book YoY 15.1% growth (100) 2019 2020 2021 2022 0 12.9%
Slide 34: Returning capital to shareholders
Returning capital to shareholders Capital distribution Number of shares outstanding*** GEL millions Millions 800 PAYOUT 36% 33% 34% 32% 30% 30% 35% 37% RATIO:** 49.2 49.2 49.2 49.2 35% 47.5 700 47.1 1.5 2.0 1.6 2.3 30% 2.5 1.7 600 532 25%GEL 5.80 final 500 dividend per 400 260* 20%share put for shar
Slide 35: Thank you
THANK YOU 35