Bank of Georgia shares rise strongly on record profits

18th Feb 2014 08:24

Shares in Bank of Georgia Holdings rose strongly as the company reported a 16.6 per cent rise in profits to a record 209.3m Georgian lari (GEL) for 2013.The share price was up 81p, or 3.57%, to 2349p at 09:00, as the bank said profits had been supported by declining funding costs and positive operating leverage.Revenues were up by 47.2m GEL to 545.5m GEL, while the cost-to-income ratio improved to 41.4% compared to 44.4% in 2012Chief Executive Officer Irakli Gilauri said the bank intends to recommend a 33.7% rise in annual dividend of 2 GEL per share payable in UK sterling at the prevailing rate. "Economic growth in Georgia, which has for a number of years been a tailwind for us, was lower than expected and resulted in a slower start to the year. However, we witnessed a significant pick up in business activity after the presidential elections in October 2013, which saw the candidate of the ruling Georgian Dream Party win a landslide victory," Gilauri said.He added that the bank's retail banking operation "continues to deliver strong franchise growth", supported by the successful roll-out of its Express Banking service. The retail Banking net loan book grew 19.6% and client deposits 33.0% year-on-year.The corporate banking net loan book was up 7.2% and deposit costs in this division fell to 4.4% from 7.2% in 2012. In the investment management unit assets under management rose 12.3% to 679.4m GEL.Aldagi, the group's Insurance and Healthcare business, reported a record group consolidated annual profit of GEL 25.1m GEL, up from 16.4m GEL. The bank said its Affordable Housing unit posted a profit of 7.8m GEL.FP