Lion Finance Group Plc · LSE:BGEO
Lion Finance — Q3 2022 Earnings Presentation
33 slides from Lion Finance's earnings presentation, Nov 14, 2022
Slide 1: Results Call Presentation 3Q22 and 9M22
RESULTS CALL PRESENTATION 3Q22 and 9M22 10 November 2022 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: Highlights of the quarter
Highlights of the quarter Profit ROAE C/I NPS MAU GEL 290m 32.4% 30.6% 60 1,000,000+ up 56.6% y-o-y All-time high up 31.2% y-o-y 3
Slide 4: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q22 AND 9M22 RESULTS 4
Slide 5: Strong growth momentum maintained in the third quarter
Strong growth momentum maintained in the third quarter Real GDP y-o-y growth Key drivers of growth: 44.8% 2021 1Q22 2Q22 3Q22 9M22 Recovery in tourism revenues, resilient inflows from exports and remittances 10.4% 14.9% 7.1% 9.7% 10.2% Increased activity in transport and communication, real esta
Slide 6: Sustained external inflows underpinning growth momentum
Sustained external inflows underpinning growth momentum Export of goods Import of goods Export of goods, US$ m % change y-o-y Import of goods, US$ m % change y-o-y 1,084 523 600 100% 1,400 60% 1,200 500 80% 1,000 40% 400 800 60% 300 40% 600 40% 20% 400 200 20% 200 14% 100 0 0% 0 0% -200 -100 -20% -4
Slide 7: Reasonably optimistic economic outlook
Reasonably optimistic economic outlook Georgia’s economic growth forecast 10.4% 10.2% Considering stronger-than-expected 7.4% growth in the first nine months of 6.4% the year and promising preliminary data, Galt & Taggart revised 2022 4.8% 4.8% 5.0% 4.4% real GDP growth upwards to 10.2% 3.6% 3.0%
Slide 8: Inflation remains elevated, driven by global commodity price pressures
Inflation remains elevated, driven by global commodity price pressures Monetary policy remains tight to curb inflation pressures Monetary policy rate Annual CPI inflation 16% 16% 5-year Annual Aug-22 Sep-22 Oct-22 14% average 14% Headline CPI 6.7% 10.9% 11.5% 10.6% Inflation mainly driven by globa
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$, 12/31/2021 – 9/30/2022 25.0% 18.4% 9.5% 0.1% -1.8% -8.6% -8.7% -13.8% -26.0% -28.2% GEL continues to appreciate on the back of strong external inflows, tight monetary policy and improved sentiments. As at 3
Slide 10: Growing international reserves
0 1 2 3 4 5 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Source: NBG, BOG Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 International reserves Sep-18 Jan-19 Gross international reserves, US$ bn May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 Reserve adequacy: 3 months of goods
Slide 11: Healthy banking sector, with dollarisation down
Healthy banking sector, with dollarisation down Loan book growth: legal entities vs. Loan and deposit dollarisation Non-performing bank loans to total households (exc. FX effect) gross loans, 2019-2021 average Loan to legal entities, % change y-o-y Bank loan dollarisation Lithuania 0.8% Loans to hou
Slide 12: Reduced debt burden in the economy
Reduced debt burden in the economy Banking sector loans to legal entities and Public debt as % of GDP households as % of GDP Household loans to GDP Legal entity loans to GDP Domestic public debt as % of GDP External public debt as % of GDP 100% 100% Total public debt as % of GDP 60.1% 70% 70% 80% 80
Slide 13: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q22 AND 9M22 RESULTS 13
Slide 14: Who we are and what we focus on
Who we are and what we focus on A FTSE-250 company with a diversified institutional investor base Retail digital banking leader Top of mind and the most trusted bank in Georgia Consistently delivering high profitability (ROAE above 20%) Highest standards of corporate governance and a strong focus on
Slide 15: Our customers are becoming more digital and engaged
Our customers are becoming more digital and engaged Active users* Building a financial Super App thousands Monthly active clients MAU** DAU 1,546 +18.7% 1,429 1,492 y-o-y 1,394 1,302 959 1,005 +31.2% 853 892 y-o-y 766 398 439 454 +43.7% 316 377 y-o-y Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 DAU Play store
Slide 16: Focusing on increasing sales in digital channels
Focusing on increasing sales in digital channels Number of transactions* Product offloading** millions thousands Share of non- +46.1% branch 96.5% 96.0% 96.6% 96.5% 96.7% transactions 80.7 550 +12.0% 76.6 2.7 50.0% 69.6 2.7 437 65.7 11.5 450 45.0% 61.7 2.8 11.2 374 390 10.2 2.2 367 2.2 9.0 40.0% 9.7
Slide 17: Full digital experience for our business customers
Full digital experience for our business customers Number of monthly active users* Number of transactions thousands millions +34.7% +39.7% +11.8% +5.7% 52 3.9 47 3.7 43 3.3 41 39 2.9 2.8 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 3Q21 4Q21 1Q22 2Q22 3Q22 Average transactions per 900k 212k Average transactio
Slide 18: Payments business – our daily touch point with customers
Payments business – our daily touch point with customers Acquiring - volume of payment transactions GEL millions +45.6% +20.7% 2,766 2,291 48.8% 2,109 767 1,899 1,922 641 723 629 617 Market share by volume of transactions in BOG’s POS and e-commerce | 3Q22 1,999 1,650 +7.6 ppts YoY 1,270 1,386 1,305
Slide 19: Fostering a customer-centric culture
Fostering a customer-centric culture NPS* 60 Engaging with customers proactively and responding in real 55 54 time 52 49 46 47 Anticipating customer needs, wants, and future behavior 42 43 39 38 37 Harnessing strong human relationships with data analytics for 33 33 34 dynamic customer insights Inves
Slide 20: Contents
Contents MACROECONOMIC HIGHLIGHTS GROUP OVERVIEW AND STRATEGY 3Q22 AND 9M22 RESULTS 20
Slide 21: 3Q22 and 9M22 financial highlights
3Q22 and 9M22 financial highlights Resilient loan portfolio Strong operating Outstanding Strong deposit growth Robust capital base and quality and focus on performance profitability during the quarter liquidity position efficiency Operating income Profit Cost of credit risk Loans CET 1 capital ratio
Slide 22: Strong underlying performance
Strong underlying performance All currency data are in GEL m unless otherwise stated Operating income Net non-interest income +51.4% +43.7% +121.4% +88.2% +6.4% +8.3% 1,417 569 231 527 214 1 9 495 569 7 379 396 986 231 348 214 151 341 109 124 303 124 126 303 105 105 109 1 60 9 11 64 848 33 34 75 684
Slide 23: 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 +25.7% +28.8% 0.0% 460 2 161 161 151 138 1 1 357 79 128 1 2 39.8% 2 28 27 1 25 25 68 110 36.8% 23 37 38 35.0% 36.2% 44 86 34 32.5% 32 32.5% 30
Slide 24: Increased deposits reflecting the strength of our franchise
Increased deposits reflecting the strength of our franchise All currency data are in GEL m unless otherwise stated Loan portfolio Deposit portfolio +29.1% +3.7% +12.9% +40.3% +13.9% -0.8% +17.2% +2.3% 17,193 15,579 16,169 16,289 16,300 16,163 15,100 14,038 14,517 13,313 8,715 8,347 7,659 8,611 8,820
Slide 25: Net interest margin broadly stable
Net interest margin broadly stable Net interest margin Loan yield, cost of funds, cost of deposits 11.1% 11.4% 11.6% 10.6% 11.0% 11.4% 10.4% 5.3% 5.3% 5.3% 5.3% 5.3% 5.0% 5.2% 4.8% 4.7% 4.8% 5.0% 4.9% 5.0% 4.6% 3.6% 3.7% 3.7% 3.6% 3.6% 3.6% 3.5% 3Q21 4Q21 1Q22 2Q22 3Q22 9M21 9M22 3Q21 4Q21 1Q22 2Q22
Slide 26: 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 1.0% 90.9% 95.5% 97.3% 89.6% 89.4% 0.8% 0.6% 0.8% NPL coverage adjusted for collateral value 0.2% 0.1% 140.9% 147.7% 153.0% 138.0% 138.0% -0.2% 424 437 414 395
Slide 27: Robust bottom-line growth and profitability
Robust bottom-line growth and profitability All currency data are in GEL m unless otherwise stated Profit ROAE 32.8% 32.4% 32.0% 30.7% +56.6% +53.2% 25.7% 26.4% 25.7% +5.3% 806 290 275 241 3Q21 4Q21 1Q22 2Q22 3Q22 9M21 9M22 526 201 185 ROAA 4.5% 4.4% 4.3% 4.1% 3.5% 3.3% 3.2% 3Q21 4Q21 1Q22 2Q22 3Q22
Slide 28: Continued strong capital generation
Continued strong capital generation Figures given for JSC Bank of Georgia standalone Capital adequacy ratios and minimum requirements 20.3% 19.7% 19.8% 19.2% 19.3% 1.6% 2.1% 2.3% 3.0% 1.9% 17.0% 16.4% 15.0% 15.4% 14.6% 14.8% 3.2% 13.7% 1.3% 14.0% 2.4% 12.8% 1.4% 13.2% 1.4% 2.3% 3.2% 1.7% 1.9% CET1 c
Slide 29: Evolution of capital ratios and update on minimum capital requirements
Evolution of capital ratios and update on minimum capital requirements Figures given for JSC Bank of Georgia standalone Evolution of capital ratios during 3Q22 Minimum Potential impact Capital 30 Jun 3Q22 Business Currency Capital 30 Sep requirement of a 10% GEL facility 2022 profit growth impact di
Slide 30: Strong capital adequacy position
Strong capital adequacy position All currency data are in GEL m unless otherwise stated Figures given for JSC Bank of Georgia standalone BOG equity vs.CET1 regulatory capital - Risk-weighted assets Sep-22 +12.5% % of RWAs 14.8% 1.6% 0.7% 1.5% 18.6% +5.0% 19,410 18,372 18,482 292 3,616 17,978 307 138
Slide 31: Strong liquidity position
Strong liquidity position Liquidity coverage and net stable Net loans to customer funds and DFIs funding ratios JSC Bank of Georgia standalone (Basel III liquidity) 132.5% 130.7% 130.9% 129.7% 130.6% 117.0% 115.2% 124.0% 112.2% 121.4% 116.2% 107.9% 112.7% 113.5% 102.1% 100.0% 97.9% 95.5% 94.0% 84.5%
Slide 32: Track record of strong performance
Track record of strong performance 32.0% 27.0% ROAE 26.4% 26.1% 25.8% Loan book YoY 21.4% 18.9% 19.8% 20%+ growth 22.0% 12.9% c.10% 19.0% 13.0% 13.9% 10.2% 3.7% 2018 2019 2020 2021 9M22 2018** 2019*** 2020 2021 9M22 Nominal Constant currency basis Capital distribution PAYOUT RATIO: 36% 33% 34% 32% 3
Slide 33: Thank you
THANK YOU 33