Bank of Georgia Holdings PLC (LSE: BGEO LN), the holding company of Georgia’s leading bank JSC Bank of Georgia (the “Bank”) and its subsidiaries (the “Group”), announced today the Group’s 1H 2014 and Q2 2014 consolidated results reporting a record half-year profit for 1H 2014 of GEL 112.0 million (US$63.3 million/GBP 37.2 million) and record earnings per share of GEL 3.15 (US$1.78 per share/GBP 1.05 per share). The Bank also reported Q2 2014 profit of GEL 58.3 million (US$33.0 million/GBP 19.4 million), or GEL 1.64 per share (US$0.93 per share/GBP 0.54 per share). Unless otherwise mentioned, comparisons are with the first half of 2013. The results are based on IFRS, are unaudited and derived from management accounts.
- Strong profit momentum maintained
- Net Interest Margin (NIM) of 7.3%, compared to 7.8% in 1H 2013
- Q2 2014 NIM of 7.3%, compared to 7.9% in Q2 2013 and 7.4% in Q1 2014
- Revenue increased by 7.3% y-o-y to GEL 281.5 million in 1H 2014
- Q2 2014 revenue of GEL 144.2 million, up 3.2% y-o-y and 5.0% q-o-q.
- Cost to Income ratio stood at 43.8% in 1H 2014 compared to 41.7% in 1H 2013
- Q2 2014 Cost to Income ratio stood at 44.6% compared to 39.9% in Q2 2013 and 43.0% in Q1 2014
- Q2 2014 Cost to Income ratio stood at 44.6% compared to 39.9% in Q2 2013 and 43.0% in Q1 2014
- Profit for 1H 2014 increased to GEL 112.0 million, up 17.7% y-o-y
- Profit increased to GEL 58.3 million in Q2 2014, up 9.8% y-o-y and up 8.7% q-o-q
- Earnings per share (EPS) increased by 16.7% to GEL 3.15 in 1H 2014 compared to GEL 2.70 in 1H 2013
- Q2 2014 EPS stood at GEL 1.64, up 8.6% on both a y-o-y and q-o-q basis
- Return on Average Assets (ROAA), adjusted for impairment* stood at 3.5% in 1H 2014 largely flat on a year-on year basis
- ROAA, adjusted for impairment stood at 3.7% in Q2 2014, compared to 3.8% in Q2 2013 and 3.3% in Q1 2014
- Return on Average Equity (ROAE), adjusted for impairment stood at 18.7% in 1H 2014, compared to 17.6% in 1H 2013
- ROAE, adjusted for impairment stood at 19.7% in Q2 2014 compared to 19.3% in Q2 2013 and 17.7% in Q1 2014
- Net Interest Margin (NIM) of 7.3%, compared to 7.8% in 1H 2013
- Balance sheet strength supported by solid capital and liquidity positions and declining Cost of Funding
- Net loan book increased by 17.2% y-o-y (up 4.9% q-o-q), while client deposits increased by 7.4% yo-y (up 0.3% q-o-q)
- Cost of Client Deposits decreased to a record low of 4.4% in 1H 2014 from 6.2% in 1H 2013. Q2 2014 Cost of Client Deposits stood at 4.3% down from 5.9% in Q2 2013 and 4.6% in Q1 2014. Loan Yields also declined to 14.7% from 16.9% in 1H 2013. Quarterly loan yields stood at 14.5% in Q2 2014 compared to14.9% in Q1 2014 and 17.0% in Q2 2013
- Cost of credit risk improved significantly in 1H 2014 to GEL 27.2 million from GEL 36.3 million in 1H 2013. This represents an annualised Cost of Risk ratio of 1.0%
- High liquidity maintained with 27.6% of total assets made up of cash and cash equivalents, amounts due from credit institutions, the NBG CDs, Georgian government treasury bills and bonds and other high quality liquid assets as of 30 June 2014. Liquidity ratio, as per National Bank of Georgia (NBG) requirements, stood at 38.1% against the regulatory minimum of 30%
- As of 30 June 2014, Net Loans to Customer Funds and DFI ratio stood at a healthy level of 100.3% compared to 96.2% as of 31 December 2013 and 96.4% as of 31 March 2014. The Net Loans to Customer Funds ratio stood at 119.0% compared to 113.0% as of 31 December 2013 and 113.8% as of 31 March 2014
- BIS Tier I capital adequacy ratio stood at 22.5% compared to 22.9% a year ago.
- NBG (Basel 2/3) Tier I capital adequacy ratio stood at 10.8% as at 30 June 2014 compared to 13.1% as at 31 December 2014 (see Annex I on page 44 for more information)
- Book value per share increased by 13.1% y-o-y to GEL 34.95 (US$19.76/GBP 11.61)
- Balance Sheet leverage remained largely flat y-o-y at 4.3 times
- Business highlights
- Retail Banking continues to deliver strong franchise growth, supported by the Express Banking strategy, adding 2,038 Express Pay Terminals and 613,159 Express Cards since the launch of the Express Banking service. Retail Banking’s net loan book grew 21.4% y-o-y and stood at GEL 1,754.2 million, while client deposits increased by 22.5% y-o-y to GEL 1,134.2 million
- Corporate Banking’s net loan book growth rate picked up in Q2 2014, increasing by 8.1% y-o-y to GEL 1,802.8 as of 30 June 2014. Corporate Banking Cost of Deposits decreased markedly from 5.5% in 1H 2013 to a record low 3.0% in 1H 2014
- Investment Management’s Assets under Management (AUM*) increased by 15.9% y-o-y to GEL 901.0 million as of 30 June 2014. Since the launch of the Certificate of Deposit (CD) programme in January 2013, the volume of CDs issued reached GEL 314.0 million, as of 30 June 2014
- The Group’s insurance and healthcare business reported GEL 11.1 million profit (GEL 11.4 million in 1H 2013). The Group’s healthcare business reported a GEL 6.2 million 1H 2014 profit (GEL 2.5 million in 1H 2013) and expanded its healthcare business through acquisitions to 36 healthcare facilities and 1,892 hospital beds. The market share of the Group’s healthcare business grew from 14.3% as of 31 December 2013 to 19.9% as of 30 June 2014 in terms of hospital beds, while the health insurance business of the Group accounted for 37.6% of the total health insurance sector of Georgia based on gross premiums written as of 31 March 2014, compared to 31.1% as of 31 December 2013
- Affordable Housing completed its second housing project and the construction of two new housing projects is underway. Net profit from the Bank’s Affordable Housing business totalled GEL 6.2 million in 1H 2014, reflecting the recognition of major part of the revenue from the completed second project
