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(Alliance News) - Bank of Georgia Group PLC on Monday updated its shareholder distribution policy, raising its target payout ratio range.
The Tbilisi, Georgia-headquartered lender is now targeting a payout ratio range of 30% to 50% of annual profits, up from 25% to 40% previously.
Bank of Georgia had declared an interim dividend of GEL1.48 per share, after securing a sharp rise in pretax profit in the six months that ended June 30. Pretax profit reached GEL375.1 million - or around GBP87.5 million - from just GEL10.2 million in the same period a year prior.
In early July, Bank of Georgia noted it was no longer utilising any regulatory capital buffers, allowing it to pay an interim dividend.
"The board expects to ensure healthy capital ratios, above minimum regulatory requirements, and take into consideration expected future capital requirements, including the full loading of Basel III requirements on our minimum capital ratios, ongoing regulatory capital developments and the growth opportunities available to Bank of Georgia," the lender said Monday.
The firm's capital distribution policy incorporates a progressive ordinary cash dividend, supplemented by additional share repurchases.
Chief Executive Archil Gachechiladze said: "Throughout the pandemic and despite significant volatility in economic activity, Bank of Georgia Group has delivered excellent operating performance, with good top-line growth, well-managed costs, and robust asset quality and risk management. This has led to consistently delivering strong profitability and high levels of internal capital generation, while maintaining capital adequacy ratios comfortably above our minimum regulatory requirements.
"Our medium- to long-term customer lending growth guidance is about 10% per annum, and the updated dividend and capital distribution policy reflects these expectations. However, the strength of the Georgian macro-economic environment has been such that there has been a strong pick-up in demand within the consumer, micro and small and medium-sized enterprises sectors and we therefore expect higher levels of lending growth in the near term. As a result, the board currently expects the payout ratio to be approximately 35% to 40% over the next two years," Gachechiladze added.
Shares in Bank of Georgia were up 0.1% in London early on Monday at 1,600.88 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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