Lion Finance extends shareholder returns as profits rise

(Sharecast News) - Lion Finance Group reported a 14% rise in first-quarter profit and announced further shareholder returns on Thursday, through a quarterly dividend and a GEL 55.0m share buyback extension.

The FTSE 100 banking group, formerly the Bank of Georgia Group, said unaudited profit rose to GEL 585.0m in the three months ended 31 March, from GEL 513.1m a year earlier. Return on average equity was 27.4%.

Operating income increased 15.0% to GEL 1.13bn, driven primarily by net interest income across its Georgian and Armenian businesses, supported by growth in net fee and commission income.

Operating income before cost of risk rose 15.7% to GEL 735.9m.

Net interest income increased 18.4% to GEL 809.6m, while net fee and commission income rose 27.5% to GEL 176.0m.

Net foreign currency gains fell 10.6% to GEL 130.1m, reflecting lower currency volatility in Georgia and a reclassification effect in Armenia.

Operating expenses rose 13.8% to GEL 390.3m, mainly driven by higher staff costs in Georgian financial services.

The cost-to-income ratio improved slightly to 34.7% from 35.0% a year earlier.

Chief executive Archil Gachechiladze said the quarter was marked by Lion Finance's inclusion in the FTSE 100, which he described as validation of "two decades of consistent execution".

"The sustained track record of strong performance that has defined the last two decades has continued into the first quarter of 2026," he said.

"The group delivered an ROAE of 27.4% on profits of GEL 585m, driven by customer franchise growth and a 23.1% year-on-year expansion of our loan book in constant currency."

The group loan book reached GEL 41.88bn at the end of March, up 23.1% year-on-year at constant currency, with growth of 17.8% in Georgian financial services and 34.6% in Armenian financial services.

Customer deposits and notes increased 17.5% to GEL 39.70bn, with Georgian deposits up 13.0% and Armenian deposits up 29.7%.

Asset quality remained stable. The non-performing loan ratio was 2.1% at the end of March, compared with 2.0% a year earlier and 2.1% at the end of December.

The cost of credit risk ratio was 0.3%, compared with 0.2% a year earlier and 0.3% in the fourth quarter.

In Georgian financial services, which mainly includes Bank of Georgia and Galt & Taggart, profit rose 11.6% to GEL 452.1m, with return on average equity of 31.5%.

Operating income increased 15.6% to GEL 792.5m, supported by 18.5% growth in net interest income and a 25.4% rise in net fee and commission income.

The Georgian loan book grew 17.8% year-on-year at constant currency, driven mainly by retail banking and corporate and investment banking.

Retail consumer lending rose 25.1%, while mortgage lending grew 15.0%.

The Georgian deposit base increased 13.0% at constant currency.

In Armenia, Ameriabank delivered profit of GEL 129.4m, up 35.5%, with return on average equity of 21.8%.

Operating income rose 18.0% to GEL 292.8m, driven by growth in net interest income and net fee and commission income.

The Armenian loan book increased 34.6% year-on-year at constant currency, with broad-based growth across retail and corporate lending.

Customer deposits and notes rose 29.7%.

Ameriabank's lending market share increased to 22.0%, retaining the number one position in Armenia, while its deposit market share including local bonds reached 19.5%.

Gachechiladze said Armenia's economy and retail banking potential positioned the business as "an important growth engine for the Group in the years ahead".

The group said macroeconomic conditions in Georgia and Armenia remained strong in early 2026, underpinned by domestic demand and resilient external inflows.

It raised its 2026 real GDP growth forecasts to 7.0% for Georgia and 6.0% for Armenia.

Gachechiladze said escalation in the Middle East could weigh on the near-term outlook through energy market volatility and inflation, but both economies remained supported by ample reserves, prudent fiscal policy and credible monetary management.

The group said Bank of Georgia's retail digital monthly active users increased 13.6% year-on-year to 1.9m, while Ameriabank's retail digital monthly active users rose 47.8% to more than 362,000.

Bank of Georgia's customer net promoter score stood at 75.

Book value per share rose 21.5% year-on-year to GEL 207.82.

Lion Finance declared an interim dividend of GEL 2.85 per share for the first quarter, payable in sterling on 10 July to shareholders on the register on 26 June.

The ex-dividend date is 25 June, with the lari-to-sterling conversion rate to be based on the National Bank of Georgia average exchange rate for 22 to 26 June.

The board also approved a GEL 55.0m extension to its share buyback and cancellation programme, following completion of the previous GEL 53.5m programme announced in February.

It said the new programme would begin shortly and end no later than the annual general meeting on 22 May, with up to 3,698,973 shares eligible for repurchase.

The group said its medium-term targets remained unchanged, including around 15% annual loan book growth, return on average equity above 20%, and a dividend and buyback payout ratio of 30% to 50% of annual profit.

At 0925 BST, shares in Lion Finance Group were up 3.77% at 11,612.28p.

Reporting by Josh White for Sharecast.com.

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