Final Results

Released : 16 Feb 2016 07:03

RNS Number : 1692P
Bgeo Group PLC
16 February 2016
 

 

 

BGEO Group PLC

4th quarter and full year 2015 preliminary results

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

2015 Results Overview                                                                                                                    3


Chief Executive Officer's Statement                                                                                               6


Financial Summary of BGEO                                                                                                          7


Discussion of Banking Business Results                                                                                         9                                                                                                         


Discussion of Segment Results                                                                                                       13


Selected Financial Information                                                                                                       27


Company Information                                                                                                                     35


 

 

 

 

 

 

 

 

 

                                          

 

 

 

 

 

 

 

 

 

 

FORWARD LOOKING STATEMENTS

This document contains statements that constitute "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, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development.

While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to the following: (1) general market, macroeconomic, governmental, legislative and regulatory trends; (2) movements in local and international currency exchange rates; interest rates and securities markets; (3) competitive pressures; (4) technological developments; (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties and developments in the market in which they operate; (6) management changes and changes to our group structure; and (7) other key factors that we have indicated could adversely affect our business and financial performance, which are contained elsewhere in this document and in our past and future filings and reports, including those filed with the respective authorities.

When relying on forward-looking statements, investors should carefully consider the foregoing factors and other uncertainties and events. Accordingly, we are under no obligations (and expressly disclaim such obligations) to update or alter our forward-looking statements whether as a result of new information, future events, or otherwise.

BGEO Group PLC ("BGEO" or the "Group" - LSE: BGEO LN), the holding company of JSC Bank of Georgia ("BOG" or the "Bank") announces the Group's full-year and fourth quarter 2015 consolidated results. Unless otherwise mentioned, figures are for the full year 2015 and comparisons are with the full year 2014. The results are based on IFRS as adopted by EU, are unaudited and are derived from management accounts

 

The information in the preliminary announcements of the results for the year ended 31 December 2015, which was approved by the Board of Directors on 12 February 2016, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The financial statements for the year ended 31 December 2014 were filed with the Registrar of Companies, and the audit report was unqualified and contained no statements in respect of Sections 498 (s) and 495 (3) of the UK Companies Act 2006. The financial statements for the year ended 31 December 2015 will be filed with the Registrar of Companies in due course

 

In November 2015, Bank of Georgia Holdings PLC ("BGH") completed the change of its name from Bank of Georgia Holdings PLC to BGEO Group PLC, following its announcement regarding its intention to change the name in August 2015

 

 

BGEO highlights

 

§ 4Q15 profit was GEL 95.7mln (US$ 39.9mln/GBP 27.0mln), up 43.9% y-o-y and up 18.3% q-o-q   

§ 4Q15 earnings per share ("EPS") were GEL 2.42 (US$ 1.01 per share/GBP 0.68 per share), up 33.0% y-o-y and up 18.6% q-o-q

§ 2015 profit was GEL 310.9mln (US$ 129.8mln/GBP 87.6mln), up 29.1% y-o-y    

§ 2015 EPS was GEL 7.93 (US$ 3.31 per share/GBP 2.23 per share), up 18.0% y-o-y

§ Book value per share was GEL 48.75, up 17.6% y-o-y, with total equity attributable to shareholders of GEL 1,851.6mln, up 17.6% y-o-y

§ Total assets increased to GEL 10,130.1mln, up 33.7% y-o-y and up 1.9% q-o-q

§ Leverage stood at 3.9 times in 2015 compared to 3.6 a year ago

§ In addition to the capital in the regulated Banking Business (JSC Bank of Georgia), GEL 117.4mln cash is held at the holding company level as of the date of this report

 

Banking Business highlights

 

4Q15 performance

§ Revenue was GEL 201.1mln (up 30.6% y-o-y and up 5.8% q-o-q)

§ Net Interest Margin ("NIM") was 7.6% (-10 bps y-o-y and flat q-o-q)

§ Pro-forma NIM, adjusted for excess liquidity level was 9.3% (7.8% in 4Q14 and 9.0% in 3Q15)

§ Loan Yield stood at 14.8% (+70 bps y-o-y and +10 bps q-o-q)

§ Cost of Funds stood at 5.1% (+40 bps y-o-y and flat q-o-q)

§ Cost to Income ratio was 35.4% (38.4% in 4Q14 and 34.8% in 3Q15)

§ Operating leverage was positive at 10.4 percentage points y-o-y and negative at 1.7 percentage points q-o-q

§ Cost of credit risk stood at GEL 35.2mln (up 138.2% y-o-y and 1.4% q-o-q)

§ Cost of Risk ratio was 2.4% (1.2% in 4Q14 and 2.5% in 3Q15)

§ Profit increased to GEL 80.6mln (up 24.0% y-o-y and up 9.8% q-o-q)

§ Return on Average Assets ("ROAA") was 3.5% (3.9% in 4Q14 and 3.3% in 3Q15)

§ Return on Average Equity ("ROAE") was 25.1% (22.7% in 4Q14 and 23.3% in 3Q15)

 

Full-year 2015 performance

§ Revenue was GEL 751.3mln (up 39.6% y-o-y)

§ NIM was 7.7% (+10 bps y-o-y)

§ Pro-forma NIM, adjusted for excess liquidity level, was 8.2% (8.3% in 2014)

§ Loan Yield was 14.8% (+50 bps y-o-y)

§ Cost of Funds was 5.1% (+30 bps y-o-y)

§ Cost to Income ratio improved to 35.7% (40.5% in 2014)

§ Operating leverage was positive at 16.6 percentage points

§ Cost of credit risk stood at GEL 151.5mln (up 171.9% y-o-y)

§ Cost of Risk ratio stood at 2.7% (1.2% in 2014)

§ Profit increased to GEL 274.3mln (up 24.4% y-o-y)

§ ROAA was 3.2% (3.5% in 2014)

§ ROAE was 21.7% (20.6% in 2014)

 

Balance sheet strength supported by solid capital and liquidity positions

§ The net loan book reached a record GEL 5,366.8mln, up 20.9% y-o-y and flat q-o-q; growth on constant currency basis was 1.5% y-o-y

§ Customer funds increased to GEL 4,993.7mln, up 43.4% y-o-y and up 7.4% q-o-q; growth on constant currency basis was 19.6% y-o-y

§ Net Loans to Customer Funds and DFI ratio stood at 90.8% (95.9% at 30 September 2015 and 108.6% at 31 December 2014)

§ NBG (Basel 2/3) Tier I and Total CAR stood at 10.9% and 16.7%, respectively

§ NBG Liquidity Ratio was 46.2%

 

Resilient growth momentum sustained across all major business lines

§ Retail Banking continues to deliver strong franchise growth, primarily supported by the Express Banking strategy and Privatbank acquisition, as well as a growing number of Solo clients. Retail Banking revenue reached GEL 114.7mln in 4Q15, up 35.0% y-o-y with annual revenue totalling GEL 427.4mln, up 44.0% from last year

§ Retail Banking net loan book reached a record GEL 2,796.5mln, up 35.3% y-o-y; growth on constant currency basis was 19.0% y-o-y

§ Retail Banking client deposits increased to GEL 1,880.0mln, up 39.3% y-o-y; growth on constant currency basis was 15.5% y-o-y

§ Number of Retail Banking clients reached 1,999,869 by the end of 2015, up 37.8% from 1,451,777 a year ago

§ The Privatbank acquisition has enhanced our position in the significantly more profitable Retail Banking franchise. Privatbank added c.400,000 clients to our business and increased our market share in retail loans by 4.3 percentage points and in retail deposits by 2.5 percentage points (market data as of 31 March 2015) 

§ We launched Solo - a new strategy for our premium banking segment - a fundamentally different approach to premium banking. As of 31 December 2015, the number of Solo clients reached 11,869, up 48.9% from 7,971 a year ago and our goal for the next three to four years is to significantly increase our market share in this segment, which stood below 13% at the beginning of 2015

§ Corporate Banking net loan book reached GEL 2,130.4mln, down 1.4% y-o-y, as a result of slower economic activity in the country's corporate sector, as well as our strategic goal to reduce concentration risk in the corporate lending and improve its ROAE

§ As a result of this strategy, concentration of top 10 corporate banking clients was reduced to 12.4% in the end of 2015, down from 15.7% a year ago. The corporate banking ROAE grew to 16.4% in 2015, up from 11.7% in 2014

§ As a result of recently announced combination of our Corporate Banking and Investment Management businesses into a Corporate Investment Banking business ("CIB"), we expect to grow our fee income, further improve the Bank's ROAE and reduce concentration risk in the corporate lending portfolio. Reflecting this change, the Group will report CIB business results separately starting in the first quarter 2016

§ Investment Management's Assets Under Management ("AUM") increased to GEL 1,373.1mln, up 33.7% y-o-y, reflecting increased bond issuance activity

 

 

Investment Business Highlights

 

§ Our healthcare business, Georgia Healthcare Group PLC ("GHG") posted record revenue of GEL 68.7mln in 4Q15, up 26.6% y-o-y. The annual revenue reached GEL 242.7mln, up 22.5% y-o-y, implying 17.3% organic revenue growth in healthcare services business

§ GHG also delivered outstanding EBITDA margin performance in its healthcare services business in 2015, achieving its 2018-target of c.30% EBITDA margin in 4Q15. EBITDA margin reached 27.4% for the full year and was higher in 4Q15 at 29.8%. As a result, strong margin performance translated into GHG EBITDA of GEL 16.5mln in 4Q15, up 131.6% y-o-y and GEL 56.1mln for full-year 2015, up 52.3% y-o-y. Consequently, GHG reported net profit of GEL 5.1mln in 4Q15, up 435.2% y-o-y and GEL 23.6mln for full year 2015, up 78.1% y-o-y. Adjusted net profit was GEL 9.5mln in 4Q15 and GEL 28.0mln in 2015

§ As a result of the GHG's initial public offering ("IPO") on the premium segment of London Stock Exchange, closed in November 2015, BGEO achieved 121% Internal Rate of Return ("IRR") on its investment in GHG

§ Our real estate business, m2 Real Estate ("m2 Real Estate") recognised revenue of GEL 21.6mln in 2015, up 57.3% y-o-y, driven by strong project execution and sales performance. In 2015, m2 Real Estate achieved sales of US$ 29.7mln, selling a total of 347 apartments, compared with US$ 46.7mln sales and 573 apartments sold in 2014. As m2 Real Estate recognises revenue upon completion of the projects, it had accumulated US$ 57.1mln sales, which will be recognised as revenue upon completion of the on-going projects in 2016-2018 (of which c. US$ 43mln is expected to be recognised in 2016). m2 Real Estate completed one project with 221 apartments in 2015, compared to one project and 522 apartments completed in 2014. Additionally, it started construction of two new projects in 2015 with a total of 838 apartments. m2 Real Estate has completed all of its projects on time and within budget

§ Profits from associates, which comprises profit from our water and utilities business - Georgian Global Utilities ("GGU") - recorded GEL 1.9mln profit in 4Q15, resulting in GEL 4.1mln profit for 2015 (reported as profit from associates)

 

 

 

 

 

 

 

 

 

 

 

CHIEF EXECUTIVE OFFICER'S STATEMENT

 

I am pleased to report to our shareholders that, during 2015, the Group managed to beat the 38% Lari devaluation by delivering an all-time high net profit in U.S. dollar terms. The Group's profit of GEL 310.9 million was driven by the outstanding performance of our banking business, with its superior customer driven franchise, sound bank risk management policy and double digit positive operating leverage, combined with an excellent performance from our portfolio of companies in the investment business. Obviously, Georgian GDP growth of c.3% was instrumental in keeping asset quality in check and delivering strong growth and record profitability. Georgian macroeconomic growth of c.3% was particularly resilient in the context of the economic turbulence in the region. Our base case scenario for GDP growth in 2016 is c.3% with inflation of up to 5%.

2015 was also marked by the successful IPO of GHG, which was an extremely important milestone for the Group with regard to crystallising the value of our investment in GHG and demonstrating an exit from our investment business, together with raising the capital to finance GHG's further growth opportunities. GHG has just produced its first quarterly results after the IPO and announced that the healthcare services business managed to deliver its targeted EBITDA margin of c.30% two years ahead of its initial plan. I would like to take this opportunity and congratulate Nika Gamkrelidze and his team on this achievement. 

In terms of the performance of Bank of Georgia, I would like to highlight the achievement of an all-time low Cost to Income Ratio of 35%, driven by the flawless Privatbank integration, produced by the Bank in 2015, together with a Net Loans to Customer Funds and DFIs ratio of 90.8%. With regard to the Bank's quarterly performance, we have managed to produce a 25% ROAE in the banking business, the highest ever return on equity in the Group's history, whilst holding nearly GEL 800 million in excess liquidity. These results, combined with our strong capital base, both at the Bank and the Group level, position us well to deliver a solid performance in 2016. 

Since the introduction of dividends in 2010, the Group has managed to grow its annual dividend by 52% CAGR. With regard to the Group's 2015 dividend, at the 2016 AGM the Board intends to recommend an annual dividend of GEL 2.4 per share payable in British Pound Sterling at the prevailing rate. This is in the range of our payout ratio target of 25-40% and represents a 14% increase over the 2014 dividend. In addition, the Group has instructed the administrators of the Group Employee Benefits Trust to purchase shares in the market totaling approximately US$10 million.

 

Irakli Gilauri,

Group CEO of BGEO Group PLC

 

 

 


FINANCIAL SUMMARY


BGEO Consolidated



Banking Business*


          Investment Business*


QUARTERLY INCOME STATEMENT



Change


Change




Change


Change




Change


Change

GEL thousands unless otherwise noted

4Q15

4Q14

Y-O-Y

3Q15

Q-O-Q


4Q15

4Q14

Y-O-Y

3Q15

Q-O-Q


4Q15

4Q14

Y-O-Y

3Q15

Q-O-Q



















 Net banking interest income 

131,434

98,132

33.9%

126,178

4.2%


134,217

101,061

32.8%

129,249

3.8%


-

-

-

-

-

 Net fee and commission income 

31,639

26,359

20.0%

30,791

2.8%


32,266

26,755

20.6%

31,061

3.9%


-

-

-

-

-

 Net banking foreign currency gain

19,525

16,643

17.3%

18,675

4.6%


19,525

16,643

17.3%

18,675

4.6%


-

-

-

-

-

 Net other banking income

9,318

4,872

91.3%

4,938

88.7%


9,699

5,146

88.5%

5,231

85.4%


-

-

-

-

-

 Gross insurance profit 

6,733

3,688

82.6%

9,783

-31.2%


5,441

4,383

24.1%

5,829

-6.7%


2,126

(38)

NMF

4,498

-52.7%

 Gross healthcare profit 

23,845

16,331

46.0%

22,118

7.8%


-

-

-

-

-


23,845

16,331

46.0%

22,118

7.8%

 Gross real estate profit 

12,769

2,145

495.3%

751

1600.3%


-

-

-

-

-


12,769

2,146

495.0%

751

1600.3%

 Gross other investment profit 

11,271

4,141

172.2%

3,373

234.2%


-

-

-

-

-


11,157

4,072

174.0%

3,229

245.5%

 Revenue 

246,534

172,311

43.1%

216,607

13.8%


201,148

153,988

30.6%

190,045

5.8%


49,897

22,511

121.7%

30,596

63.1%

 Operating expenses 

(84,262)

(69,265)

21.7%

(77,562)

8.6%


(71,172)

(59,177)

20.3%

(66,167)

7.6%


(14,580)

(11,020)

32.3%

(12,244)

19.1%

 Operating income before cost of credit risk / EBITDA

162,272

103,046

57.5%

139,045

16.7%


129,976

94,811

37.1%

123,878

4.9%


35,317

11,491

207.3%

18,352

92.4%

 Profit from associates

1,938

-

-

1,444

34.2%


-

-

-

-

-


1,938

-

-

1,444

34.2%

 Depreciation and amortization of investment business

(4,731)

(2,349)

101.4%

(4,227)

11.9%


-

-

-

-

-


(4,731)

(2,349)

101.4%

(4,227)

11.9%

 Net foreign currency loss from investment business

(3,416)

(1,061)

NMF

(2,311)

47.8%


-

-

-

-

-


(3,416)

(1,061)

NMF

(2,311)

47.8%

 Interest income from investment business 

602

321

87.5%

499

20.6%


-

-

-

-

-


957

470

103.6%

719

33.1%

 Interest expense from investment business

(3,166)

(933)

NMF

(2,080)

52.2%


-

-

-

-

-


(6,542)

(4,338)

50.8%

(5,485)

19.3%

 Operating income before cost of credit risk 

153,499

99,024

55.0%

132,370

16.0%


-

-

-

-

-


23,523

4,213

458.3%

8,492

177.0%

 Cost of credit risk 

(36,022)

(16,552)

117.6%

(35,647)

1.1%


(35,230)

(14,789)

138.2%

(34,752)

1.4%


(792)

(1,763)

-55.1%

(895)

-11.5%

 Profit

95,672

66,477

43.9%

80,905

18.3%


80,591

64,999

24.0%

73,402

9.8%


15,081

1,478

920.4%

7,503

101.0%

Earnings per share basic and diluted

2.42

1.82

33.0%

2.04

18.6%













 

 

 

 

 

FULL YEAR INCOME STATEMENT

BGEO Consolidated


Banking Business*


Investment Business*




Change




Change




Change

GEL thousands unless otherwise noted

2015

2014

Y-O-Y


2015

2014

Y-O-Y


2015

2014

Y-O-Y













 Net banking interest income 

501,390

349,958

43.3%


512,927

357,271

43.6%


-

-

-

 Net fee and commission income 

118,406

99,792

18.7%


121,589

101,845

19.4%


-

-

-

 Net banking foreign currency gain

76,926

52,752

45.8%


76,926

52,752

45.8%


-

-

-

 Net other banking income

18,528

9,270

99.9%


19,837

9,890

100.6%


-

-

-

 Gross insurance profit 

29,907

29,430

1.6%


20,047

16,422

22.1%


12,116

14,987

-19.2%

 Gross healthcare profit 

80,938

53,483

51.3%


-

-

-


80,938

53,483

51.3%

 Gross real estate profit 

14,688

13,566

8.3%


-

-

-


14,688

13,646

7.6%

 Gross other investment profit 

20,777

12,991

59.9%


-

-

-


20,639

12,804

61.2%

 Revenue 

861,560

621,242

38.7%


751,326

538,180

39.6%


128,381

94,920

35.3%

 Operating expenses 

(314,732)

(257,031)

22.4%


(267,859)

(217,764)

23.0%


(50,862)

(42,145)

20.7%

 Operating income before cost of credit risk / EBITDA

546,828

364,211

50.1%


483,467

320,416

50.9%


77,519

52,775

46.9%

 Profit from associates

4,050

-

-


-

-

-


4,050

-

-

 Depreciation and amortization of investment business

(14,225)

(9,164)

55.2%


-

-

-


(14,225)

(9,164)

55.2%

 Net foreign currency gain (loss) from investment business

651

(3,169)

NMF


-

-

-


651

(3,169)

NMF

 Interest income from investment business 

2,340

1,309

78.8%


-

-

-


3,338

1,860

79.5%

 Interest expense from investment business

(10,337)

(6,558)

57.6%


-

-

-


(25,493)

(16,089)

58.4%

 Cost of credit risk 

(155,377)

(59,020)

163.3%


(151,517)

(55,732)

171.9%


(3,860)

(3,288)

17.4%

 Profit 

310,945

240,767

29.1%


274,257

220,504

24.4%


36,688

20,263

81.1%

Earnings per share basic and diluted

7.93

6.72

18.0%









 

 

 

 

 

* Banking Business and Investment Business financials do not include interbusiness eliminations. Detailed financials, including interbusiness eliminations are provided in annexes.

 


BGEO Consolidated


Banking Business*


Investment Business*

BALANCE SHEET

Dec-15

Dec-14

Change

Sep-15

Change


Dec-15

Dec-14

Change

Sep-15

Change


Dec-15

Dec-14

Change

Sep-15

Change

GEL thousands unless otherwise noted

Y-O-Y

Q-O-Q


Y-O-Y

Q-O-Q


Y-O-Y

Q-O-Q



















Liquid Assets

3,068,166

1,898,137

61.6%

2,924,784

4.9%


3,006,991

1,874,769

60.4%

2,913,651

3.2%


307,459

166,056

85.2%

186,812

64.6%

Loans to customers and finance lease receivables

5,322,117

4,347,851

22.4%

5,266,125

1.1%


5,366,764

4,438,032

20.9%

5,367,311

0.0%


-

-

0.0%

-

0.0%

Total assets

10,130,093

7,579,145

33.7%

9,937,889

1.9%


9,185,791

7,044,002

30.4%

9,140,036

0.5%


1,247,960

775,507

60.9%

1,094,685

14.0%

Client deposits and notes

4,751,387

3,338,725

42.3%

4,477,908

6.1%


4,993,681

3,482,001

43.4%

4,649,572

7.4%


-

-

0.0%

-

0.0%

Amounts due to credit institutions

1,789,062

1,409,214

27.0%

2,115,859

-15.4%


1,692,557

1,324,609

27.8%

2,011,801

-15.9%


144,534

177,313

-18.5%

209,898

-31.1%

Debt securities issued

1,039,804

856,695

21.4%

1,076,137

-3.4%


961,944

827,721

16.2%

999,959

-3.8%


84,474

29,374

187.6%

83,549

1.1%

Total liabilities

8,056,455

5,945,052

35.5%

8,179,930

-1.5%


7,870,500

5,813,225

35.4%

7,891,998

-0.3%


489,613

372,191

31.5%

584,764

-16.3%

Total equity

2,073,638

1,634,093

26.9%

1,757,959

18.0%


1,315,291

1,230,777

6.9%

1,248,038

5.4%


758,347

403,316

88.0%

509,921

48.7%

 

 

 








Banking Business Ratios

4Q15

4Q14

3Q15


2015

2014








ROAA

3.5%

3.9%

3.3%



3.2%

3.5%

ROAE

25.1%

22.7%

23.3%



21.7%

20.6%

Net Interest Margin

7.6%

7.7%

7.6%



7.7%

7.6%

Loan Yield

14.8%

14.1%

14.7%



14.8%

14.3%

Liquid assets yield

3.3%

2.9%

3.1%



3.2%

2.5%

Cost of Funds

5.1%

4.7%

5.1%



5.1%

4.8%

Cost of Client Deposits and Notes

4.4%

4.1%

4.1%



4.3%

4.2%

Cost of Amounts Due to Credit Institutions

5.9%

4.8%

6.3%



5.8%

4.8%

Cost of Debt Securities Issued

6.8%

7.2%

7.3%



7.1%

7.2%

Cost / Income

35.4%

38.4%

34.8%



35.7%

40.5%

NPLs To Gross Loans To Clients

4.3%

3.4%

4.0%



4.3%

3.4%

NPL Coverage Ratio

83.4%

68.0%

82.1%



83.4%

67.5%

NPL Coverage Ratio, Adjusted for discounted value of collateral

120.6%

110.6%

121.9%



120.6%

110.6%

Cost of Risk

2.4%

1.2%

2.5%



2.7%

1.2%

Tier I capital adequacy ratio (New NBG, Basel 2/3)

10.9%

11.1%

10.2%



10.9%

11.1%

Total capital adequacy ratio (New NBG, Basel 2/3)

16.7%

14.1%

15.8%



16.7%

14.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Note: Banking Business and Investment Business financials do not include interbusiness eliminations. Detailed financials, including interbusiness eliminations are provided in annexes.


DISCUSSION OF RESULTS

Discussion of Banking Business Results

 

The following discussion refers to the Banking Business only

 

 

Revenue

GEL thousands, unless otherwise noted

4Q15

4Q14

Change,

Y-o-Y

3Q15

Change,

Q-o-Q


2015

2014

Change,

Y-o-Y

 Banking interest income 

230,833

163,829

40.9%

223,800

3.1%


872,299

600,925

45.2%

 Banking interest expense 

(96,616)

(62,768)

53.9%

(94,551)

2.2%


(359,372)

(243,654)

47.5%

 Net banking interest income 

134,217

101,061

32.8%

129,249

3.8%


512,927

357,271

43.6%

 Fee and commission income 

42,856

34,865

22.9%

41,532

3.2%


161,891

134,488

20.4%

 Fee and commission expense 

(10,590)

(8,110)

30.6%

(10,471)

1.1%


(40,302)

(32,643)

23.5%

 Net fee and commission income 

32,266

26,755

20.6%

31,061

3.9%


121,589

101,845

19.4%

 Net banking foreign currency gain

19,525

16,643

17.3%

18,675

4.6%


76,926

52,752

45.8%

 Net other banking income

9,699

5,146

88.5%

5,231

85.4%


19,837

9,890

100.6%

     Net insurance premiums earned

10,810

7,651

41.3%

10,332

4.6%


40,161

28,129

42.8%

     Net insurance claims incurred

(5,369)

(3,268)

64.3%

(4,503)

19.2%


(20,114)

(11,707)

71.8%

 Gross insurance profit 

5,441

4,383

24.1%

5,829

-6.7%


20,047

16,422

22.1%

 Revenue 

201,148

153,988

30.6%

190,045

5.8%


751,326

538,180

39.6%











Net Interest Margin

7.6%

7.7%


7.6%



7.7%

7.6%


Average interest earning assets

7,014,711

5,182,218

35.4%

6,786,373

3.4%


6,667,220

4,725,688

41.1%

Average interest bearing liabilities

7,575,074

5,254,799

44.2%

7,378,228

2.7%


7,069,269

5,081,994

39.1%

Average net loans, currency blended

5,401,904

4,139,954

30.5%

5,240,930

3.1%


5,200,650

3,767,973

38.0%

   Average net loans, GEL

1,536,973

1,208,655

27.2%

1,558,868

-1.4%


1,527,852

1,164,713

31.2%

   Average net loans, FC

3,864,931

2,931,299

31.9%

3,682,062

5.0%


3,672,798

2,603,260

41.1%

Average client deposits, currency blended

4,807,651

3,286,851

46.3%

4,437,639

8.3%


4,379,707

3,173,826

38.0%

  Average client deposits, GEL

1,258,566

961,277

30.9%

1,182,641

6.4%


1,203,167

919,857

30.8%

  Average client deposits, FC

3,549,085

2,325,574

52.6%

3,254,998

9.0%


3,176,540

2,253,969

40.9%

Average liquid assets, currency blended

2,842,715

1,704,106

66.8%

2,748,330

3.4%


2,540,310

1,843,538

37.8%

  Average liquid assets, GEL

1,194,534

879,391

35.8%

1,235,688

-3.3%


1,153,425

833,854

38.3%

  Average liquid assets, FC

1,648,181

824,715

99.8%

1,512,642

9.0%


1,386,885

1,009,684

37.4%

Excess liquidity (NBG)

789,311

177,917

343.6%

491,228

60.7%


789,311

177,917

343.6%

Liquid assets yield, currency blended

3.3%

2.9%


3.1%



3.2%

2.5%


  Liquid assets yield, GEL

7.2%

5.2%


6.7%



6.5%

5.0%


  Liquid assets yield, FC

0.5%

0.5%


0.3%



0.5%

0.4%


Loan yield, total

14.8%

14.1%


14.7%



14.8%

14.3%


  Loan yield, GEL

23.4%

20.1%


22.8%



22.6%

19.9%


  Loan yield, FC

11.3%

11.7%


11.2%



11.4%

11.6%


Cost of funding, total

5.1%

4.7%


5.1%



5.1%

4.8%


  Cost of funding, GEL

6.8%

4.0%


5.2%



5.5%

4.0%


  Cost of funding, FC

4.6%

5.0%


5.0%



4.9%

5.1%


 

 

§ Our Banking Business delivered all-time high quarterly revenue of GEL 201.1mln (up 30.6% y-o-y and up 5.8% q-o-q), ending the year 2015 with record revenue of GEL 751.3mln (up 39.6% y-o-y). The revenue growth was driven by strong growth across all revenue lines

§ Our net banking interest income increased to GEL 134.2mln in 4Q15, growing both y-o-y and q-o-q (up 32.8% y-o-y and up 3.8% q-o-q), with the annual result reaching GEL 512.9mln, showing strong double digit growth of 43.6% y-o-y. This reflects the strong performance of interest income which outgrew interest expense. On a constant currency basis, growth in our full year interest income (up 32.1% y-o-y) outpaced growth in interest expense (28.7%)

§ Our strong interest income performance was a result of robust growth in our average interest earning assets and improved Loan Yield, which was primarily driven by Privatbank acquisition. The y-o-y growth in interest earning assets was driven by the weakening GEL, which increased the GEL value of our foreign currency denominated interest earning assets, the Privatbank acquisition and a slight 1.5% y-o-y growth in the net loan book on a constant currency basis

§ Our average net loans increased to GEL 5,401.9mln, up 30.5% y-o-y in nominal terms and up 1.5% y-o-y on a constant currency basis, primarily driven by outstanding performance of our Retail Banking operations as well as the Privatbank acquisition, which added GEL 245.6mln to our banking business net loan book at time of the Privatbank integration in May 2015

§ The increase in our interest expense was driven by a two-fold effect for both, the fourth quarter and full-year: strong growth in our average interest bearing liabilities and growth in cost of funding. This reflects a strong 46.3% growth in average client deposits for 4Q15, which represent a more expensive source of funding. The growth was driven mainly by the growth in foreign currency deposits which again reflected in large part the weakening of the GEL. For the full-year, average interest bearing liabilities grew at 39.1% and cost of funding increased from 4.8% in 2014 to 5.1% this year. Average client deposits and notes grew 38.0% y-o-y for 2015 to GEL 4,379,707

§ Our net fee and commission income reached GEL 32.3mln in 4Q15, up 20.6% y-o-y with annual result reaching GEL 121.6mln, up 19.4% y-o-y. On a constant currency basis, growth in our full year fee and commission income (up 16.0% y-o-y) outpaced growth in fee and commission expense (13.1 %). Growth was primarily driven by the ongoing success of our Express Banking service, which has expanded during the year partially driven by the integration of Privatbank, whose clients were a mainly target segment for our Express products. We have added 58,669 Express Banking customers in 2015, representing 16.0% growth y-o-y in Express client base. The growth in client base has triggered a significant increase in the volume of banking transactions. The growth of transactions was achieved largely through the more cost-effective remote channels

§ Net gain from foreign currencies increased for both reporting periods, reaching GEL 19.5mln in 4Q15 (up 17.3% y-o-y) and GEL 76.9mln in 2015 (up 45.8% y-o-y). Growth reflected increased client activity as a result of the increased GEL volatility

§ Our P&C insurance business, Aldagi, continued its strong yearly performance into 4Q15, and posted gross insurance profit of GEL 5.4mln in 4Q15 (up 24.1% y-o-y), ending the year at GEL 20.0mln (up 22.1% y-o-y). This increase was mainly driven by growth in Motor insurance and Life & Disability insurance. For P&C insurance segment financials please see page 32

§ Our NIM stood at 7.6% in 4Q15 (down 10 bps y-o-y and flat q-o-q), ending a year at 7.7% (up 10bps y-o-y). NIM was adversely affected by the high liquidity levels that we purposefully maintained during 2015. Pro-forma NIM, adjusted for excess liquidity levels, was 9.3% in 4Q15 and 8.2% for full-year 2015

§ NIM reflected:

-       Strong Loan Yield which stood at 14.8% for 4Q15 (up 70 bps y-o-y and up 10 bps q-o-q) and full-year 2015 (up 50 bps y-o-y), largely driven by the addition of Privatbank's high yielding Loan Portfolio. Privatbank's higher margin is primarily driven by its mono-product of an all-in-one debit and credit card

-       Liquid Assets Yield stood at 3.3% in 4Q15 (up 40 bps y-o-y and up 20 bps q-o-q) and at 3.2% in 2015 (up 70 bps y-o-y), largely reflecting higher yield on Government issued securities

-       This was partially offset by a 40 bps increase in Cost of Funds, which stood at 5.1% both for 4Q15 (up 40 bps y-o-y and flat q-o-q) and for full-year 2015 (up 30 bps y-o-y). The increase in Cost of Funds was primarily driven by an increase in the cost of local currency funding as the local currency financing reference rate of the National Bank of Georgia increased gradually during 2015 to 8.0% at the year end, up from 4.0% at the end of 2014. As of 1 September 2015, we decreased the interest rates on one-year dollar deposits from 5% to 4% in the retail segment, which is expected to drive our Cost of Funds down and decrease the dollarization of our balance sheet. On the other hand, as of 1 September 2015, we increased the interest rates on one-year local currency deposits from 9% to 11% in the retail segment, which affected the increase in our cost of funds

-       Our liquidity levels as a percentage of total assets increased to 32.7% by the end of 2015, compared to 26.6% a year ago and 31.9% as at 30 September 2015 as a result of an increased liquidity pool

Operating income before non-recurring items; cost of credit risk; profit for the period

 



Change


Change



Change

GEL thousands, unless otherwise noted

4Q15

4Q14

y-o-y

3Q15

q-o-q

2015

2014

y-o-y










Salaries and other employee benefits

(39,304)

(34,655)

13.4%

(39,768)

-1.2%

(155,744)

(130,060)

19.7%

Administrative expenses

(21,657)

(16,806)

28.9%

(17,320)

25.0%

(74,381)

(58,833)

26.4%

Banking depreciation and amortisation

(8,982)

(6,711)

33.8%

(8,505)

5.6%

(34,199)

(25,641)

33.4%

 Other operating expenses 

(1,229)

(1,005)

22.3%

(574)

114.1%

(3,535)

(3,230)

9.4%

 Operating expenses 

(71,172)

(59,177)

20.3%

(66,167)

7.6%

(267,859)

(217,764)

23.0%

 Operating income before cost of credit risk 

129,976

94,811

37.1%

123,878

4.9%

483,467

320,416

50.9%

 Impairment charge on loans to customers 

(33,929)

(12,310)

175.6%

(34,857)

-2.7%

(142,819)

(45,088)

NMF

 Impairment charge on finance lease receivables

(215)

(136)

58.1%

156

NMF

(1,958)

(476)

NMF

 Impairment charge on other assets and provisions

(1,086)

(2,343)

-53.6%

(51)

NMF

(6,740)

(10,168)

-33.7%

 Cost of credit risk 

(35,230)

(14,789)

138.2%

(34,752)

1.4%

(151,517)

(55,732)

171.9%

 Net operating income before non-recurring items 

94,746

80,022

18.4%

89,126

6.3%

331,950

264,684

25.4%

 Net non-recurring items 

(2,502)

(1,518)

64.8%

(4,967)

-49.6%

(13,046)

(11,837)

10.2%

 Profit before income tax 

92,244

78,504

17.5%

84,159

9.6%

318,904

252,847

26.1%

 Income tax expense

(11,653)

(13,505)

-13.7%

(10,757)

8.3%

(44,647)

(32,343)

38.0%

 Profit 

80,591

64,999

24.0%

73,402

9.8%

274,257

220,504

24.4%

 

§ Our efficiency further improved in both of the reporting periods, with double digit operating leverage and an all time low cost to income ratio. Operating leverage was positive at 10.4% y-o-y in 4Q15 and 16.6% y-o-y in 2015. The Cost/Income ratio stood at 35.4% in 4Q15 (down 300bps y-o-y) and 35.7% in 2015 (down 480 bps y-o-y). Improved efficiency was a result of the integration of Privatbank and the resulting synergies realised during the year, and our ongoing efforts to keep a tight grip on costs

§ Operating expenses increased to GEL 71.2mln in 4Q15 (up 20.3% y-o-y) and to GEL 267.9mln in 2015 (up 23.0%). Both in 4Q15 and full-year 2015, y-o-y revenue growth largely outpaced growth in operating expenses, which reflected the Privatbank acquisition and an organic growth of the business: 

-       The salaries and employee benefits increase was driven by the increased revenue base and Privatbank acquisition

-       The administrative expenses increase  was largely driven by expenses on rent, predominantly due to the appreciation of the U.S. dollar, the listing currency of rentals in Georgia, in addition to an increase in the number of leased branches following the Privatbank acquisition, which also drove the increase in depreciation and amortisation

§ For 4Q15, the Banking Business Cost of Risk ratio stood at 2.4% (down 10 bps q-o-q and up 120 bps y-o-y) and cost of credit risk was GEL 35.2mln (up 1.4% q-o-q and up 138.2% y-o-y).

§ For the full year 2015, Banking Business like-for-like Cost of Risk ratio (excluding devaluation effect) stood at 2.4% (1.2% in 2014) and the like for like cost of credit risk was GEL 133.6mln (GEL 55.7mln for the year 2014). Devaluation added 0.3% and GEL 17.9mln to Cost of Risk and cost of credit risk, respectively, for the year 2015, resulting in Cost of Risk Ratio of 2.7% and cost of credit risk of GEL 151.5mln

§ NPLs to gross loans increased by 30 bps to 4.3% as of 31 December 2015, compared to 4.0% as of 30 September 2015 and 90 bps from 3.4% as of 31 December 2014. The increase was mainly due to GEL devaluation against U.S. dollar

§ NPLs increased to GEL 241.1mln, up 57.0% y-o-y, reflecting the inclusion of Privatbank's NPLs, local currency devaluation against the US Dollar and overall 20.9% growth in net loan book. NPLs increased 8.8% on q-o-q basis

§ The NPL coverage ratio stood at 83.4% as of 31 December 2015 compared to 82.1% as of 30 September 2015 and 68.0% as of 31 December 2014. NPL coverage ratio adjusted for the discounted value of collateral stood at 120.6% as of 31 December 2015, compared to 121.9% as of 30 September 2015 and 110.6% as of 31 December 2014

§ Our 15 days past due rate for retail loans stood at 0.9% as of 31 December 2015 compared to 1.4% as of 30 September 2015 and 0.8% as of 31 December 2014

§ Non-recurring items increased to GEL 2.5mln in 4Q15 from GEL 1.5mln in 4Q14 but decreased from GEL 5.0mln in 3Q15, which was largely driven by costs associated with the Privatbank integration  

§ As a result of the foregoing, the Banking Business reported record profit of GEL 80.6mln in 4Q15 (up 24.0% y-o-y) and GEL 274.3mln in 2015 (up 24.4% y-o-y)

§ The Banking Business profit was supported by its banking subsidiary in Belarus - BNB, which added GEL 4.8mln profit in 4Q15 (up 14.4% y-o-y) and GEL 17.5mln in 2015 (up 11.4% y-o-y). The growth was primarily driven by strong y-o-y growth in the BNB loan book to GEL 320.1mln, up 20.4% y-o-y, mostly consisting of an increase in SME loans. BNB client deposits increased to GEL 277.6mln, up 37.6% y-o-y and reflecting BNB's strong franchise in Belarus. BNB is well capitalised, with Capital Adequacy Ratios well above the requirements of its regulating Central Bank. For 4Q15, Total CAR was 16.5%, above 10% minimum requirement by the National Bank of the Republic of Belarus ("NBRB") and Tier I CAR was 8.1%, above the 5% minimum requirement by NBRB. Return on Average Equity ("ROAE") for BNB was 23.5% (21.7% in 4Q14 and 38.0% in 3Q15). For BNB standalone financials please see page 32

 

Banking Business Balance Sheet highlights



Change


Change

GEL thousands, unless otherwise noted 

31 Dec 2015

31 Dec 2014

y-o-y

30 Sep 2015

q-o-q







Liquid assets

3,006,991

1,874,769

60.4%

2,913,651

3.2%

Liquid assets, GEL

1,191,353

1,028,833

15.8%

1,323,793

-10.0%

Liquid assets, FC

1,815,638

845,936

114.6%

1,589,858

14.2%

Net loans

5,366,764

4,438,032

20.9%

5,367,311

0.0%

Net loans, GEL

1,502,888

1,269,613

18.4%

1,574,181

-4.5%

Net loans, FC

3,863,876

3,168,419

21.9%

3,793,130

1.9%

Client deposits and notes

4,993,681

3,482,001

43.4%

4,649,572

7.4%

Amounts due to credit institutions, of which:

1,692,557

1,324,609

27.8%

2,011,801

-15.9%

 Borrowings from DFIs

917,087

605,480

51.5%

949,915

-3.5%

 Short-term loans from central banks

307,200

400,771

-23.3%

620,846

-50.5%

 Loans and deposits from commercial banks

468,270

318,358

47.1%

441,040

6.2%

 Debt securities issued 

961,944

827,721

16.2%

999,959

-3.8%

Liquidity and CAR Ratios






Net Loans / Customer Funds

107.5%

127.5%


115.4%


Net Loans / Customer Funds + DFIs

90.8%

108.6%


95.9%


Liquid assets as percent of total assets

32.7%

26.6%


31.9%


Liquid assets as percent of total liabilities

38.2%

32.3%


36.9%


NBG liquidity ratio

46.2%

35.0%


40.5%


Excess liquidity (NBG)

789,311

177,917

343.6%

491,228

60.7%

Tier I Capital Adequacy Ratio (NBG Basel 2/3)

10.9%

11.1%


10.2%


Total Capital Adequacy Ratio (NBG Basel 2/3)

16.7%

14.1%


15.8%


 

 

Our Banking Business balance sheet remained very liquid (NBG Liquidity ratio of 46.2%) and well-capitalised (Tier I Capital Adequacy Ratio, NBG Basel 2/3 of 10.9%) with a well-diversified funding base (Client Deposits and notes to Liabilities of 63.4%)

§ The NBG liquidity ratio stood at 46.2% as of 31 December 2015 compared to 40.5% as of 30 September 2015, against a regulatory requirement of 30.0%

§ Liquid assets increased to GEL 3,007.0mln, up 60.4% y-o-y

§ Additionally, liquid assets as a percentage of total assets increased to 32.7% y-o-y, up from 26.6% a year ago and liquid assets as a percentage of total liabilities also increased to 38.2% y-o-y, up from 32.3% a year ago

§ Our share of amounts due to credit institutions to total liabilities decreased slightly y-o-y from 22.8% to 21.5%, with the share of client deposits and notes to total liabilities increasing y-o-y from 59.9% to 63.4%

§ Net Loans to Customer Funds and DFIs ratio, a ratio closely observed by management, stood at 90.8%, down from 95.9% as of 30 September 2015 and 108.6% as of 31 December 2014. Decrease was mainly due to the slower growth in net loans and an increase in deposits

 

Discussion of Segment Results

 

The segment results discussion is presented for Retail Banking (RB), Corporate Banking (CB), Investment Management, Healthcare Business (GHG), Real Estate Business (m2 Real Estate)

 

Banking Business Segment Result Discussion

 

Retail Banking (RB)

Retail Banking provides consumer loans, mortgage loans, overdrafts, credit card facilities and other credit facilities as well as funds transfer and settlement services and the handling of customer deposits for both individuals and legal entities, encompassing the mass affluent segment, retail mass markets, SME and micro businesses.

 

GEL thousands, unless otherwise noted

4Q15

4Q14

Change

y-o-y

3Q15

Change

q-o-q

2015

2014

Change

y-o-y










INCOME STATEMENT HIGHLIGHTS


















Net banking interest income 

85,318

60,317

41.4%

83,141

2.6%

322,879

215,795

49.6%

Net fee and commission income 

21,264

17,349

22.6%

19,982

6.4%

78,218

58,858

32.9%

Net banking foreign currency gain

3,697

6,081

-39.2%

5,202

-28.9%

17,108

18,622

-8.1%

Net other banking income

3,950

842

NMF

2,861

38.1%

9,159

3,564

157.0%

Revenue 

114,229

84,589

35.0%

111,186

2.7%

427,364

296,839

44.0%

Salaries and other employee benefits

(23,613)

(17,762)

32.9%

(22,466)

5.1%

(92,091)

(69,299)

32.9%

 Administrative expenses

(14,445)

(11,037)

30.9%

(12,081)

19.6%

(50,398)

(37,339)

35.0%

 Banking depreciation and amortisation

(7,259)

(5,151)

40.9%

(6,806)

6.7%

(27,714)

(19,525)

41.9%

 Other operating expenses 

(782)

(426)

83.6%

(353)

121.5%

(2,093)

(1,464)

43.0%

Operating expenses 

(46,099)

(34,376)

34.1%

(41,706)

10.5%

(172,296)

(127,627)

35.0%

Operating income before cost of credit risk

68,130

50,213

35.7%

69,480

-1.9%

255,068

169,212

50.7%

Cost of credit risk

(15,371)

(2,283)

NMF

(22,713)

-32.3%

(75,407)

(9,241)

NMF

Net non-recurring items 

(2,494)

(744)

NMF

(3,128)

-20.3%

(8,945)

(5,797)

54.3%

Profit before income tax 

50,265

47,186

6.5%

43,639

15.2%

170,716

154,174

10.7%

Income tax expense

(7,607)

(7,448)

2.1%

(4,747)

60.2%

(23,994)

(19,295)

24.4%

Profit 

42,658

39,738

7.3%

38,892

9.7%

146,722

134,879

8.8%



















BALANCE SHEET HIGHLIGHTS









Net loans, standalone, Currency Blended

2,796,479

2,066,973

35.3%

2,751,290

1.6%

2,796,479

2,066,973

35.3%

Net loans, standalone, GEL

1,279,286

1,023,756

25.0%

1,318,961

-3.0%

1,279,286

1,023,756

25.0%

Net loans, standalone, FC

1,517,193

1,043,217

45.4%

1,432,329

5.9%

1,517,193

1,043,217

45.4%

Client deposits, standalone, Currency Blended

1,880,018

1,349,556

39.3%

1,805,812

4.1%

1,880,018

1,349,556

39.3%

Client deposits, standalone, GEL

486,806

437,712

11.2%

463,506

5.0%

486,806

437,712

11.2%

Client deposits, standalone, FC

1,393,212

911,844

52.8%

1,342,306

3.8%

1,393,212

911,844

52.8%

Time deposits, standalone, Currency Blended

1,156,382

789,413

46.5%

1,105,050

4.6%

1,156,382

789,413

46.5%

Time deposits, standalone, GEL

192,178

174,552

10.1%

191,113

0.6%

192,178

174,552

10.1%

Time deposits, standalone, FC

964,204

614,861

56.8%

913,937

5.5%

964,204

614,861

56.8%

Current accounts and demand deposits, standalone, Currency Blended

723,636

560,143

29.2%

700,762

3.3%

723,636

560,143

29.2%

Current accounts and demand deposits, standalone, GEL

294,628

263,160

12.0%

272,393

8.2%

294,628

263,160

12.0%

Current accounts and demand deposits, standalone, FC

429,008

296,983

44.5%

428,369

0.1%

429,008

296,983

44.5%



















KEY RATIOS









Net interest margin, currency blended

9.6%

9.9%


9.5%


9.6%

9.8%


Cost of risk

2.1%

0.1%


3.2%


2.6%

0.4%


Loan yield, currency blended

17.9%

17.0%


17.9%


17.6%

17.4%


Loan yield, GEL

25.4%

21.7%


24.7%


24.2%

21.5%


Loan yield, FC

11.2%

12.0%


11.4%


10.6%

12.4%


Cost of deposits, currency blended

3.5%

3.6%


3.7%


3.9%

3.8%


Cost of deposits, GEL

4.4%

4.0%


4.3%


4.7%

4.2%


Cost of deposits, FC

3.2%

3.5%


3.5%


3.5%

3.6%


Cost of time deposits, currency blended

5.2%

5.5%


5.4%


5.5%

5.7%


Cost of time deposits, GEL

9.3%

8.1%


8.7%


8.7%

8.2%


Cost of time deposits, FC

4.4%

4.7%


4.6%


4.7%

4.9%


Current accounts and demand deposits, currency blended

0.9%

0.9%


1.0%


1.2%

1.0%


Current accounts and demand deposits, GEL

1.0%

0.9%


1.1%


1.5%

1.0%


Current accounts and demand deposits, FC

0.8%

0.9%


1.0%


0.9%

1.0%


Cost / income ratio

40.4%

40.6%


37.5%


40.3%

43.0%


 

Performance highlights

 

§ Retail Banking revenue increased to GEL 114.2mln in 4Q15, up 35.0% y-o-y, ending year 2015 with revenue of GEL 427.4mln, up 44.0% y-o-y

§ Net banking interest income in 4Q15 was GEL 85.3mln, up 41.4% y-o-y with the annual result reaching a record level of GEL 322.9mln, up 49.6%. Impressive growth in net banking interest income for Retail Banking was mostly a result of Privatbank integration which was primarily a credit card business, and the significant growth (partly attributable to the devaluation effect) of the Retail Banking loan book, particularly the mortgage, micro & SME loan portfolios, and a fairly stable NIM

§ The Retail Banking net loan book reached a record level of GEL 2,796.5mln, up 35.3% y-o-y; with robust growth on constant currency basis of 19.0% y-o-y. The growth was a result of strong loan origination delivered across all Retail Banking segments:

-       Consumer loan originations of GEL 156.7mln in 4Q15 and GEL 671.2mln in 2015 resulted in consumer loans outstanding totaling GEL 626.8mln as of 31 December 2015, up 19.2% y-o-y

-       Micro loan originations of GEL 152.4mln in 4Q15 and GEL 572.0mln in 2015 resulted in micro loans outstanding totaling GEL 546.7mln as of 31 December 2015, up 27.2% y-o-y

-       SME loan originations of GEL 107.6mln in 4Q15 and GEL 346.9mln in 2015 resulted in SME loans outstanding totaling GEL 357.1mln as of 31 December 2015, up 51.2% y-o-y

-       Mortgage loans originations of GEL 91.8mln in 4Q15 and GEL 288.1mln in 2015 resulted in mortgage loans outstanding of GEL 809.0mln as of 31 December 2015, up 34.6% y-o-y

-       Point of sales (POS) loan originations of GEL 70.9mln in 4Q15 and GEL 200.3mln in 2015 resulted in POS loans outstanding of GEL 119.4mln as of 31 December 2015, up 28.2% y-o-y

§ Retail Banking client deposits increased to GEL 1,880.0mln, up 39.3% y-o-y; growth on constant currency basis was 15.5% y-o-y. The growth of Client Deposits on a y-o-y basis was due to the increase in the number of Express Banking clients, who bring with them the cheapest source of deposits for the bank ("JSC Bank of Georgia") - current accounts and demand deposits

§ Our Retail Banking net fee and commission income increased to GEL 21.3mln, up 22.6%, with the annual result reaching a record level of GEL 78.2mln, up 32.9% y-o-y. Net fee and commission income reflects continued growth of our Express Banking franchise, which has attracted 425,350 previously unbanked emerging mass market customers since its launch 3 years ago, it grew 58,669 y-o-y in 2015, alongside the addition of c.400,000 customers as a result of the Privatbank acquisition. This has driven the number of client related foreign currency and other banking transactions substantially higher

§ Retail Banking recorded NIM of 9.6% in 4Q15, down 30bps y-o-y, ending a year with NIM of 9.6%, down 20 bps y-o-y

§ Quarterly NIM was favorably affected by two-fold drivers, specifically:

-       Increasing Loan Yield of 17.9%, up 90 bps y-o-y, which was a result of similar drivers as for the rest of the year

-       Decreasing Cost of Client Deposits of 3.5%, down 10 bps y-o-y and largely a result of the GEL devaluation against the US$, which increased the share of  low cost US$ deposits

§ Annual NIM reflected:

-       Increasing Loan Yield of 17.6%, up 20 bps y-o-y largely as a result of Privatbank's high yielding loan portfolio which was consolidated in 2Q15 and had a loan yield of 29.3% at the moment of acquisition

-       Cost of Client Deposits of 3.9%, up 10 bps y-o-y, which is a resilient performance notwithstanding the increase in local currency denominated deposits

§ For 4Q15, operating expenses increased to GEL 46.1mln, up 34.1% y-o-y, resulting in a Cost to Income ratio of 40.4% and positive operating leverage of 0.9 percentage points, which reflects:

-       The increase in salaries and other employee benefits was principally driven by the growth in headcount that reflects the growing revenue base

-       The increase in administrative expenses was largely driven by expenses on rent, predominantly due to the appreciation of the U.S. dollar, the listing currency of rentals in Georgia, in addition to an increase in the number of leased branches which also drove the increase in depreciation and amortisation

§ For 2015, operating expenses increased to GEL 172.3mln, up 35.0% y-o-y, resulting in a Cost to Income ratio of 40.3% and positive operating leverage of 9.0 percentage points, which reflects increases in each of Salaries and other employee benefits, Administrative expenses and Depreciation and amortization reflecting the same underlying trends outlined above for Q4

§ The Cost of credit jumped significantly to GEL 15.4mln in 4Q15 and GEL 75.4mln in 2015, compared to GEL 2.3mln in 4Q14 and GEL 9.2mln in 2014. The increase was a result of a combination of factors including the 35.3% growth of the Retail Banking loan book, the devaluation and the new portfolio acquired with the Privatbank acquisition

§ Retail Banking Cost of Risk was 2.1% in 4Q15 compared to 0.1% in 4Q14 and 3.2% in 3Q15, ending a year with Cost of Risk of 2.6% compared to 0.4% a year ago

§ The following factors contribute to what we consider to be a relatively low default rates in Retail Banking:

-       Large number of our Retail Banking borrowers (approximately 500,000 borrowers), whose loans are in local currency, are not affected by the U.S. dollar appreciation against Georgian Lari

-       Although our mortgage borrowers are affected by the devaluation as most mortgages are U.S. dollar denominated, they represent a very small portion of our clients (approximately 13,000). Additionally, these customers are relatively high earners, with a bigger capacity to bear the effects of devalution

-       Our Retail Banking clients prefer to save in US$ as indicated by the dollarization levels of our client deposits; thus their interest income in nominal GEL terms has increased with the GEL devaluation against US$. These also represent clients who either have local currency or Mortgage loans

-       US$ is the main currency for remittances, a major source of hard currency inflows to Georgia, which represent the main income for a large number of families in Georgia. Therefore, their income increased in nominal local currency terms with the U.S. dollar appreciation

§ As a result, Retail Banking profit reached GEL 42.7mln in 4Q15, up 7.3% y-o-y and GEL 146.7mln in 2015, up 8.8% y-o-y. Retail Banking achieved a strong ROAE level of 24.6% in 2015

§ Our Express Banking continues to deliver strong growth as we follow our mass market Retail Banking strategy:

-       1,191,828 Express Cards have been issued since their launch in September 2012, in essence replacing the pre-paid metro cards which were previously used. Of this, 469,919 Express Cards have been issued in 2015

-       Increased number of Express Pay terminals to 2,589 from 2,239 a year ago. Express Pay terminals are an alternative to tellers, placed at bank branches as well as various other venues (groceries, shopping malls, bus stops, etc.), and are used for bank transactions such as credit card and consumer loan payments, utility bill payments and mobile telephone top-ups

-       In 4Q15, utilisation of Express Pay terminals increased significantly, with the number of transactions growing to GEL 30.1mln during 4Q 2015; the year ended with GEL 113.1mln annual transactions in 2015, up 13.8%

-       Increased Point of Sales ("POS") footprint to 308 desks and 3,335 contracted merchants as of 31 December 2015, up from 305 desks and 2,709 contracted  merchants as of 31 December 2014

-       POS terminals outstanding reached 8,103 up 28.2% y-o-y, including 1,016 Privatbank operated POS terminals

-       The volume of transactions through the Bank's POS terminals grew to GEL 202.7mln, up 28.7% y-o-y, ending 2015 with GEL 710.6mln, up 22.7% y-o-y. This represents the number of POS transactions of 6.0mln, up 40.7% y-o-y and 20.6mln, up 40.7% y-o-y for 4Q15 and full year 2015, respectively.

-       POS loans outstanding reached GEL 119.4mln as of 31 December 2015, up 28.2% y-o-y

§ Since we launched Solo Lifestyle - a fundamentally different approach to premium banking - in April 2015, the number of Solo clients has reached 11,869, up 48.9% y-o-y from 7,971 a year ago. With Solo we are targeting the mass affluent retail segment and aim to build brand loyalty through exclusive experiences offered through the new Solo Lifestyle. Through Solo Lifestyle, our Solo clients are given access to exclusive products and the finest lounge-style environment at our newly designed Solo lounges and are provided with new lifestyle opportunities, such as exclusive events and handpicked lifestyle products. In our Solo lounges, Solo clients are offered, at cost, a selection of luxury products and accessories that are currently not available in the country. Solo clients enjoy tailor-made solutions including new financial products such as bonds, which pay a significantly higher yield compared to deposits, and other securities developed by Galt & Taggart, the Bank's Investment Banking arm

§ The number of Retail Banking clients totalled 1,999,869, up 37.8% y-o-y and by 2.1% (40,758 clients) q-o-q. This includes Privatbank's c.400,000 clients

§ The total number of cards increased significantly to 1,958,377, up 69.3% y-o-y

§ The total number of debit cards outstanding increased to 1,204,103, up 15.8% y-o-y

§ The total number of outstanding credit cards amounted to 754,274, up 6.5 times y-o-y, with Privatbank contributing significantly to this growth. Of this, 100,515 were American Express Cards, down 8.9% y-o-y. A total of 259,288 American Express cards have been issued since the launch in November 2009.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Banking (CB)

 

The Corporate Banking business in Georgia comprises of loans and other credit facilities to the country's large corporate clients as well as other legal entities, excluding SME and micro businesses. The services include fund transfers and settlements services, currency conversion operations, trade finance services and documentary operations as well as handling savings and term deposits for corporate and institutional customers. The Corporate Banking Business also includes finance lease facilities provided by the Bank's leasing operations (the Georgian Leasing Company).

 

GEL thousands, unless otherwise noted

 

4Q15

 

4Q14

Change y-o-y

 

3Q15

Change y-o-y

2015

2014

Change

y-o-y










INCOME STATEMENT HIGHLIGHTS









 Net banking interest income 

33,389

30,035

11.2%

32,126

3.9%

134,883

103,158

30.8%

 Net fee and commission income 

8,119

6,599

23.0%

8,705

-6.7%

31,142

24,811

25.5%

 Net banking foreign currency gain

13,261

7,288

82.0%

7,272

82.4%

38,136

24,848

53.5%

 Net other banking income

4,002

4,500

-11.1%

2,288

74.9%

9,178

6,996

31.2%

 Revenue 

58,771

48,422

21.4%

50,391

16.6%

213,339

159,813

33.5%

 Salaries and other employee benefits

(7,095)

(8,520)

-16.7%

(9,392)

-24.5%

(33,828)

(33,196)

1.9%

 Administrative expenses

(3,927)

(2,868)

36.9%

(3,000)

30.9%

(13,207)

(10,963)

20.5%

 Banking depreciation and amortisation

(1,114)

(965)

15.4%

(1,065)

4.6%

(4,126)

(3,812)

8.2%

 Other operating expenses 

(220)

(322)

-31.7%

(107)

105.6%

(727)

(1,014)

-28.3%

 Operating expenses 

(12,356)

(12,675)

-2.5%

(13,564)

-8.9%

(51,888)

(48,985)

5.9%

 Operating income before cost of credit risk

46,415

35,747

29.8%

36,827

26.0%

161,451

110,828

45.7%

 Cost of credit risk 

(11,620)

(10,217)

13.7%

(10,531)

10.3%

(55,678)

(41,750)

33.4%

 Net non-recurring items 

(2,342)

(105)

NMF

(1,401)

67.2%

(4,539)

(2,672)

69.9%

 Profit before income tax 

32,453

25,425

27.6%

24,895

30.4%

101,234

66,406

52.4%

 Income tax expense

(4,763)

(4,269)

11.6%

(2,698)

76.5%

(14,928)

(9,493)

57.3%

 Profit 

27,690

21,156

30.9%

22,197

24.7%

86,306

56,913

51.6%










BALANCE SHEET HIGHLIGHTS









Letters of credit and guarantees, standalone1

511,399

552,661

-7.5%

476,652

7.3%

511,399

552,661

-7.5%

Net loans, standalone, currency blended

2,130,362

2,160,767

-1.4%

2,253,160

-5.5%

2,130,362

2,160,767

-1.4%

Net loans, standalone, GEL

219,588

284,987

-22.9%

248,504

-11.6%

219,588

284,987

-22.9%

Net loans, standalone, FC

1,910,774

1,875,780

1.9%

2,004,656

-4.7%

1,910,774

1,875,780

1.9%

Client deposits, standalone, currency blended

1,848,039

1,186,026

55.8%

1,607,673

15.0%

1,848,039

1,186,026

55.8%

Client deposits, standalone, GEL

777,287

575,882

35.0%

780,832

-0.5%

777,287

575,882

35.0%

Client deposits, standalone, FC

1,070,752

610,144

75.5%

826,841

29.5%

1,070,752

610,144

75.5%

Time deposits, standalone, currency blended

461,731

391,514

17.9%

432,766

6.7%

461,731

391,514

17.9%

Time deposits, standalone, GEL

175,738

197,222

-10.9%

180,344

-2.6%

175,738

197,222

-10.9%

Time deposits, standalone, FC

285,993

194,292

47.2%

252,422

13.3%

285,993

194,292

47.2%

Current accounts and demand deposits, standalone, currency blended

1,386,308

794,512

74.5%

1,174,907

18.0%

1,386,308

794,512

74.5%

Current accounts and demand deposits, standalone, GEL

601,549

378,660

58.9%

600,488

0.2%

601,549

378,660

58.9%

Current accounts and demand deposits, standalone, FC

784,759

415,852

88.7%

574,419

36.6%

784,759

415,852

88.7%










RATIOS









Net interest margin, currency blended

4.3%

4.8%


4.1%


4.5%

4.5%


Cost of risk

1.8%

1.8%


1.9%


2.3%

1.7%


Loan yield, currency blended

10.9%

10.5%


10.3%


10.7%

10.6%


Loan yield, GEL

13.3%

10.2%


13.2%


12.6%

10.5%


Loan yield, FC

10.6%

10.5%


10.0%


10.4%

10.6%


Cost of deposits, currency blended

4.4%

2.9%


3.1%


3.4%

2.9%


Cost of deposits, GEL

7.6%

3.8%


4.4%


5.2%

3.4%


Cost of deposits, FC

1.6%

2.0%


1.9%


1.8%

2.4%


Cost of time deposits, currency blended

6.5%

6.4%


6.5%


6.3%

6.4%


Cost of time deposits, GEL

9.1%

7.7%


8.0%


7.9%

7.9%


Cost of time deposits, FC

4.6%

5.1%


5.0%


4.7%

5.6%


Current accounts and demand deposits, currency blended

3.8%

1.5%


1.7%


2.1%

1.5%


Current accounts and demand deposits, GEL

7.3%

2.3%


2.9%


4.0%

2.2%


Current accounts and demand deposits, FC

0.6%

0.6%


0.6%


0.4%

0.8%


Cost / income ratio

21.0%

26.2%


26.9%


24.3%

30.7%


 

1Off-balance sheet items

 

 

 

 

 

 

 

 

Performance highlights

 

§ Corporate Banking revenue increased to GEL 58.8mln in 4Q15, up 21.4% y-o-y from GEL 48.4mln a year ago, resulting in full year 2015 revenue of GEL 213.3mln, up 33.5% y-o-y. Both, quarterly and annual growth was diversified across all revenue lines, with net banking interest income driving the majority of the increase since the same period last year

-       Net banking interest income for 4Q15 was GEL 33.4mln, up 11.2% y-o-y and for full year 2015 was GEL 134.9mln, up 30.8%. While the net loan book and the loan yield for CB were largely flat y-o-y, the growth in net interest income was primarily driven by the appreciation of the US$, as almost 90% of corporate banking loans are foreign currency denominated, primarily in U.S. dollar

-       The Corporate Banking net loan book was GEL 2,130.4mln, down 1.4% y-o-y; on constant a currency basis, the corporate loan book declined by 21.0% y-o-y. Foreign currency denominated loans grew slightly by 1.9% y-o-y, while local currency denominated loans decreased considerably by 22.9% y-o-y, reflecting the appreciation of the US$ during the year

-       Corporate Banking client deposits increased significantly to GEL 1,848.0mln, up 55.8% y-o-y; growth on constant currency basis was 34.2% y-o-y. The mix of client deposits by currency showed same dynamics and drivers in 2015, as for our loan book, resulting in 35.0% increase in local currency denominated deposits, reaching GEL 777.3mln, compared to 75.5% increase in foreign currency denominated deposits, reaching GEL 1,070.8mln

-       Our current account balances have increased significantly during 2015 and 4Q15, reflecting our focused efforts on maintaining high liquidity levels, particularly in local currency. This is also reflected in increased cost of current accounts and demand deposits to 3.8% in 4Q15, up from 1.5% a year ago. The increase was primarily driven by increase in cost of local currency denominated current accounts and demand deposits to 7.3% in 4Q15, up from 2.3% a year ago, while we maintained flat cost on foreign currency denominated current accounts and demand deposits. As a result, at the end of 2015, total current accounts and demand deposits reached GEL 1,386.3mln, up 74.5% y-o-y, of which local currency denominated current accounts and demand deposits were GEL 601.5mln, up 58.9% y-o-y and foreign currency denominated, mostly US$, current accounts and demand deposits were GEL 784.8mln, up 88.7% y-o-y

-       Our Corporate Banking net fee and commission income increased to GEL 8.1mln in 4Q15, up 23.0% y-o-y, resulting in annual figure of GEL 31.1mln, up 25.5% y-o-y

-     Our net banking foreign currency gain increased significantly both in 4Q15 and full year 2015, reflecting increased volatility of GEL / US$ exchange rate during these periods. As a result, we recorded net banking foreign currency gain of GEL 13.3mln, up 82.0% y-o-y and GEL 38.1mln, up 53.5% for 4Q15 and full year 2015, respectively

§ Corporate banking recorded NIM of 4.3% in 4Q15, down 50 bps y-o-y, ending a year with NIM of 4.5%, flat y-o-y. NIM reflected a growing Loan Yield, which was 10.9% in 4Q15, up 40 bps y-o-y and 10.7% in 2015, up 10 bps y-o-y. This was partially offset by the increasing Cost of Client Deposits, which was 4.4% in 4Q15, up 150 bps y-o-y and 3.4% in 2015, up 50 bps y-o-y, largely as a result of a more expensive GEL deposits as described above

§ Operating expenses were well contained in both reporting periods, declining to GEL 12.4mln in 4Q15, down 2.5% y-o-y and increasing slightly to GEL 51.9mln in 2015, up only 5.9% y-o-y. With the devaluation driven increase in revenue, this resulted in a very strong Cost to Income ratio of 21.0% in 4Q15 and positive operating leverage of 23.9 percentage points y-o-y, which reflects:

-       Salaries and other employee benefits of GEL 7.1mln in 4Q15, down GEL 1.4mln or 16.7% y-o-y, mainly reflecting 36.7% y-o-y decrease in cash bonuses and ESOP, related to lower loan origination during the year

-       Administrative expenses increased to GEL 3.9mln in 4Q15, up GEL 1.1mln or 36.9%, reflecting 50.7% y-o-y increase in occupancy and rent expenses mostly driven by US$ appreciation against the local currency and 83.7% y-o-y increase in legal and other professional services fees

§ Cost of credit risk was GEL 11.6mln in 4Q15, up 13.7% and GEL 55.7mln in 2015, up 33.4%

§ The Corporate Banking Cost of Risk was 1.8% in 4Q15 compared to 1.8% in 4Q14 and 1.9% in 3Q15, ending a year with Cost of Risk of 2.3% compared to 1.7% a year ago

§ As a result, Corporate Banking profit reached GEL 27.7mln in 4Q15, up 30.9% y-o-y

§ Our strategic goal for Corporate Banking in 2015 was to reduce concentration risk in the corporate lending and improve its ROAE. As a result of this strategy, concentration of top 10 corporate banking clients was reduced to 12.4% in the end of 2015, down from 15.7% a year ago

§ Corporate Banking achieved ROAE of 16.4% as of 31 December 2015, significant improvement compared to 11.7% a year ago. ROAE for 4Q15 was also strong at 20.2%, up from 16.6% a year ago. These results reflect the effect of the devaluation.

§ As a result of recently announced combination of our Corporate Banking and Investment Management businesses into a Corporate Investment Banking business ("CIB"), we expect to grow our fee income, further improve the Bank's ROAE and reduce the concentration risk in the corporate lending portfolio. Reflecting this change, the Group will report CIB business results separately starting in the first quarter 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Management

 

Investment Management consists of Bank of Georgia Wealth Management and the brokerage arm of the Bank, Galt & Taggart. Bank of Georgia Wealth Management provides private banking services to high-net-worth individuals and offers investment management products internationally through representative offices in London, Budapest, Istanbul and Tel Aviv. Galt & Taggart brings under one brand corporate advisory, private equity and brokerage services.

 

 

 

 

Investment Management financial highlights (includes Galt&Taggart)

 

INCOME STATEMENT HIGHLIGHTS



Change


Change


Change

 

GEL thousands, unless otherwise noted

4Q15

4Q14

Y-O-Y

3Q15

Q-O-Q

2015

2014

Y-O-Y










Net banking interest income 

5,949

4,656

27.8%

5,657

5.2%

20,941

14,613

43.3%

Net fee and commission income 

661

248

166.5%

357

85.2%

3,193

8,760

-63.6%

Net banking foreign currency gain

681

565

20.5%

944

-27.9%

3,627

1,432

153.3%

Net other banking income

370

(245)

NMF

205

80.5%

1,178

789

49.3%

Revenue 

7,661

5,224

46.7%

7,163

7.0%

28,939

25,594

13.1%

Salaries and other employee benefits

(2,888)

(3,405)

-15.2%

(2,750)

5.0%

(9,506)

(9,560)

-0.6%

Administrative expenses

(304)

(492)

-38.2%

(100)

NMF

(1,367)

(1,737)

-21.3%

Banking depreciation and amortisation

(127)

(143)

-11.2%

(129)

-1.6%

(486)

(413)

17.7%

Other operating expenses 

(22)

(36)

-38.9%

(14)

57.1%

(111)

(100)

11.0%

Operating expenses 

(3,341)

(4,076)

-18.0%

(2,993)

11.6%

(11,470)

(11,810)

-2.9%

Operating income before cost of credit risk

4,320

1,148

NMF

4,170

3.6%

17,469

13,784

26.7%

Cost of credit risk 

(371)

(15)

NMF

(19)

NMF

(480)

47

NMF

Net operating income before non-recurring items 

3,949

1,133

NMF

4,151

-4.9%

16,989

13,831

22.8%

Net non-recurring items 

(182)

(3)

NMF

(115)

58.3%

(337)

(296)

13.9%

Profit before income tax 

3,767

1,130

NMF

4,036

-6.7%

16,652

13,535

23.0%

Income tax expense

(652)

(418)

56.0%

(463)

40.8%

(2,328)

(2,029)

14.7%

Profit 

3,115

712

NMF

3,573

-12.8%

14,324

11,506

24.5%

 

 

 

 

Wealth Management financial highlights (excludes Galt&Taggart)

GEL thousands, unless otherwise noted

4Q15

4Q14

Change

Y-O-Y

3Q15

Change

Q-O-Q

2015

2014

Change

y-o-y

BALANCE SHEET HIGHLIGHTS









Client deposits, standalone, currency blended

1,023,284

805,266

27.1%

1,016,399

0.7%

1,023,284

805,266

27.1%

Client deposits, standalone, GEL

19,951

22,115

-9.8%

20,109

-0.8%

19,951

22,115

-9.8%

Client deposits, standalone, FC

1,003,333

783,151

28.1%

996,290

0.7%

1,003,333

783,151

28.1%

Time deposits, standalone, currency blended

786,989

596,366

32.0%

701,960

12.1%

786,989

596,366

32.0%

Time deposits, standalone, GEL

11,699

13,882

-15.7%

11,860

-1.4%

11,699

13,882

-15.7%

Time deposits, standalone, FC

775,290

582,484

33.1%

690,100

12.3%

775,290

582,484

33.1%

Current accounts& demand deposits, standalone, currency blended

236,295

208,900

13.1%

314,439

-24.9%

236,295

208,900

13.1%

Current accounts and demand deposits, standalone, GEL

8,252

8,233

0.2%

8,249

0.0%

8,252

8,233

0.2%

Current accounts and demand deposits, standalone, FC

228,043

200,667

13.6%

306,190

-25.5%

228,043

200,667

13.6%

Assets under management

1,373,112

1,027,085

33.7%

1,346,965

1.9%

1,373,112

1,027,085

33.7%










RATIOS









Cost of deposits, currency blended

4.8%

5.5%


5.0%


5.2%

6.0%


Cost of deposits, GEL

5.7%

6.1%


5.6%


5.7%

6.3%


Cost of deposits, FC

4.8%

5.5%


5.0%


5.2%

6.0%


Cost of time deposits, currency blended

5.9%

6.6%


6.2%


6.3%

7.4%


Cost of time deposits, GEL

8.8%

8.6%


8.7%


8.6%

9.0%


Cost of time deposits, FC

5.9%

6.6%


6.2%


6.2%

7.3%


Current accounts and demand deposits, currency blended

1.8%

2.5%


2.3%


2.3%

2.4%


Current accounts and demand deposits, GEL

1.1%

1.3%


1.8%


1.5%

1.3%


Current accounts and demand deposits, FC

1.8%

2.5%


2.3%


2.3%

2.5%


 

 

 

 

 

 

Performance highlights

§ The AUM of the Investment Management segment increased to GEL 1,373.1mln, up 33.7% y-o-y. This includes Wealth Management clients' deposits and assets held at Bank of Georgia Custody, Galt & Taggart brokerage client assets and Aldagi pension scheme assets

§ Investment Management posted GEL 3.1mln profit in 4Q15 compared to GEL 0.7mln in 4Q14, with an annual result reaching GEL 14.3mln compared to GEL 11.5mln in 2014. Net fee and commission income increased on y-o-y basis to GEL 0.7mln from GEL 0.2mln in 4Q14, with an annual result of GEL 3.2mln compared to GEL 8.8mln in 2014

§ Wealth Management deposits increased to GEL 1,023.3mln, up 27.1% y-o-y, growing at a compound annual growth rate (CAGR) of 31.4% over the last five year period. On constant currency basis, deposits decreased by 0.6% y-o-y on the back of a 70 bps decline in the Cost of Client deposits to 4.8% in 4Q15. The decrease was partially due to Wealth Management focus switching from deposits to bonds, as a number of bond issuances, yielding higher rates than deposits by Galt & Taggart were offered to Wealth Management clients

§ As of 31 December 2015, the amount of the Bank's Certificates of Deposits issued to Investment Management clients increased to GEL 589.8mln, up 28.0% compared to 31 December 2014

§ We served over 1,390 wealth management clients from 68 countries as of 31 December 2015

§ Galt & Taggart is succeeding in developing local capital markets, and acted as a placement agent for:

-       GEL 25mln floating rate notes issued by the European Bank for Reconstruction and Development (EBRD) and GEL 30mln bonds issued by IFC ("International Finance Corporation"). Both transactions were completed in February 2015

-       US$ 20mln 2-year bonds for m2 Real Estate, the largest non-IFI issue to date. The transaction was met with considerable interest particularly from Wealth Management clients. The transaction was completed in March 2015

-       US$ 15mln 2-year bonds for the Group's wholly-owned subsidiary Evex, the healthcare services company of healthcare business GHG. This was the first bond placement by our healthcare subsidiary. The proceeds from the transaction were intended to be used by the healthcare subsidiary to invest in organic growth opportunities. The transaction was completed in May 2015

-       Galt & Taggart ("G&T") acted as a Co-Leader Manager for the US$ 100mln IPO of Georgia Healthcare Group on the London Stock Exchange ("GHG:LN") in November 2015. This marks a landmark transaction for G&T in helping Georgian companies raise equity financing from local and international investors

-       Since its launch in June 2012, Galt & Taggart Research has initiated research coverage of the Georgian and Azeri economies, including a report analysing the impact of Russia-Ukraine standoff on the Georgian economy, the Georgian Retail Real Estate Market, the Georgian Wine Sector, Georgian Agricultural Sector, Georgian Electricity Sector, Georgian Oil and Gas Corporation, Georgian Railway, and has issued notes on the Georgian State Budget and the Tourism Sector. Galt & Taggart reports are available at  www.galtandtaggart.com

 

 

 

 

 

 

 

 

Investment Business Segment Result Discussion

 

Healthcare business (Georgia Healthcare Group - GHG)

 

Standalone results

For the purposes of the results discussion below, healthcare business refers to the Group's pure-play healthcare businesses, Georgia Healthcare Group (GHG), which includes healthcare services and medical insurance. The results are based on management accounts and refer to standalone numbers.

 

Income Statement


GEL thousands unless otherwise noted

4Q15

4Q14

Change, Y-o-Y

3Q15

Change, Q-o-Q

2015

2014

Change, Y-o-Y

Revenue, gross

68,720

54,264

26.6%

63,355

8.5%

242,673

198,148

22.5%

Corrections & rebates

(1,086)

(643)

68.9%

(680)

59.7%

(3,608)

(1,816)

98.7%

Revenue, net

67,634

53,621

26.1%

62,675

7.9%

239,065

196,332

21.8%

Cost of services

(41,618)

(34,441)

20.8%

(38,006)

9.5%

(145,936)

(126,066)

15.8%

Gross profit

26,016

19,180

35.6%

24,669

5.5%

93,129

70,266

32.5%

Total operating expenses

(10,480)

(11,594)

-9.6%

(10,604)

-1.2%

(40,480)

(34,387)

17.7%

Other operating income/(expenses)

986

(451)

NMF

1,964

-49.8%

3,490

983

255.0%

EBITDA

16,522

7,135

131.6%

16,029

3.1%

56,139

36,862

52.3%

EBITDA margin

24.0%

13.1%


25.3%


23.1%

18.6%


Depreciation and amortisation

(4,295)

(1,970)

118.0%

(3,482)

23.3%

(12,665)

(7,630)

66.0%

Net interest (expense) /  income

(5,377)

(3,562)

51.0%

(4,786)

12.3%

(20,281)

(12,806)

58.4%

Net (losses) /  gains from foreign currencies

(1,592)

10

NMF

(1,759)

-9.5%

2,097

(2,494)

NMF

Net non-recurring (expense) /  income

(192)

(760)

-74.7%

(723)

-73.4%

(1,682)

578

NMF

Profit before income tax expense

5,066

853

493.9%

5,279

-4.0%

23,608

14,510

62.7%

Income tax (expense) /  benefit

(14)

91

NMF

(31)

-54.8%

9

(1,246)

NMF

Profit for the period

5,052

944

438.2%

5,248

-3.7%

23,617

13,264

78.1%

Attributable to:









  - shareholders of GHG PLC

3,823

107

NMF

3,973

-3.8%

19,651

10,207

92.5%

  - non-controlling interests

1,229

837

46.8%

1,275

-3.6%

3,966

3,057

29.7%

 

For detailed income statement by healthcare services and medical insurance business, please see page 30-31

 

IPO Highlights

§ Our healthcare business, GHG successfully closed its IPO of ordinary shares on the premium segment of the London Stock Exchange on 12 November 2015

§ As a result of GHG IPO, BGEO achieved 121% IRR on its investment in GHG. IPO highlights:

-       The offering price was 170 pence per Share (the "Offering Price")

-       Based on the Offering Price, GHG's total market capitalisation at the commencement of conditional dealings was £218mln

-       The IPO comprised 38,681,820 Shares equating to approximately £66mln of capital being raised, and representing approximately 29% of GHG's share capital on admission, excluding the over-allotment option

-       BGEO continues to hold 65% of the shares after the over-allotment option is exercised in full

-       Immediately following admission to London Stock Exchange, the issued share capital of GHG was 131,681,820 shares

-       GHG raised gross proceeds of approximately US$100mln (£66mln) from the IPO through the issue of new shares

 

Performance Highlights

§ For full year 2015, GHG reported record results and strong growth, supported both organically and as a result of number of acquisitions completed in 2014 and 2015. Revenue reached GEL 242.7mln, implying growth of 22.5% y-o-y. The revenue growth was primarily driven by healthcare services business, which reported revenue of GEL 195.0mln, up 32.5% y-o-y with impressive 17.3% organic growth and the remaining 15.2% growth was contributed from recent acquisitions. The medical insurance business also contributed GEL 55.3mln to total revenue, while recording a decrease of 20.8% y-o-y which was primarily driven by an anticipated shift in the structure of state financed healthcare programmes

§ Healthcare services revenue growth of 32.5% y-o-y was primarily driven by referral hospitals, which posted GEL 168.5mln revenue in 2015, up 36.6% y-o-y and driven by strong organic growth and acquisitions. Organic revenue growth of 17.3% was largely sourced from government-funded healthcare programs

§ For 4Q15, GHG reported record quarterly revenue of GEL 68.7mln, up 26.6% y-o-y and up 8.5% q-o-q. Growth was primarily driven by healthcare services revenue, which grew 25.7% y-o-y and 8.5% q-o-q. Revenue growth of healthcare services business was mainly sourced from referral hospitals as a result of organic growth as well as acquisitions during 2015. UHC continued to be the main driver of our healthcare services revenues in the quarter

§ Medical insurance claims grew more than revenue q-o-q, which is due to two main factors: 1). Seasonality effect, as the 4th quarter is characterized by higher claims levels compared to 3rd quarter; 2). GEL devaluation against US$ drove the prices of drugs up, which represent c. 21% of our medical insurance claims. To address the second driver, GHG has adjusted the pricing of medical insurance products and it is expected to have positive impact gradually, with the renewal of existing contracts or new sales at adjusted prices. Additionally, GHG is renegotiating prices for drugs with pharmaceutical distributors, leveraging its combined scale from claims on drugs in its medical insurance business and purchases of drugs and other medical disposables for its healthcare services business

§ GHG's margins improved as a result of the increased utilisation and scale of the business, as well as management's continued focus on efficiency and the on-going integration of recently acquired healthcare facilities, with a 15.8% increase in COGS lagging behind 22.5% growth in revenues. The costs continued to be well contained in 4Q15, with a 20.8% growth in cost of services favorably lagging behind a 26.6% growth in our revenues. On q-o-q basis, revenue grew at 8.5% slightly falling behind 9.5% growth in cost of services

§ In 2015 operating expenses increased only 17.7% y-o-y, resulting in a positive operating leverage of 4.8 percentage points y-o-y. Operating expenses in 4Q15 decreased by 9.6%, compared to the same period last year

§ GHG delivered on its EBITDA margin target 3 years ahead of time (GHG targeted c.30% healthcare services business EBITDA margin by 2018). Healthcare services EBITDA margin reached 27.4% for the full year and was higher in 4Q15 at 29.8%, up 870 bps since 4Q14. As a result, strong margin performance translated into GHG EBITDA of GEL 16.5mln in 4Q15, up 131.6% y-o-y and GEL 56.1mln in full-year 2015, up 52.3% y-o-y

§ The increase in depreciation and amortisation costs was primarily driven by the acquisitions completed during the past year. The increase in net interest expense was a result of increased borrowings throughout the year raised for financing acquisitions and growth projects. However, net interest expense is expected to decrease significantly, as a total of GEL 104.4mln of borrowings were prepaid at year end 2015 and beginning of 2016 from IPO proceeds, reducing borrowings to GEL 105.6mln by the end of January 2016. As a result of prepaying the borrowings, GHG's net debt to EBITDA was zero, due to cash and bank deposits exceeding borrowings

§ As a result, GHG 2015 profit reached GEL 23.6mln, up 78.1% y-o-y for the period. The adjusted profit was GEL 28.0 million, which reflects currency exchange adjustment relating to the proceeds received from the capital raise and the positive impact of utilising some of the proceeds to reduce the Group's existing indebtedness by GEL 104.4 million to GEL 105.6 million as at 31 January 2016

§ For 4Q15, GHG's strong EBITDA performance was further translated into outstanding profit for the period, which increased more than four-times to GEL 5.1mln, up 435.2% y-o-y. Adjusted profit for 4Q15 was GEL 9.5mln

 

 

Operating highlights

§ By the end of 2015, GHG operated 45 healthcare facilities, of which 16 were referral hospitals, 19 were community hospitals, and 10 were ambulatory clinics. This compares to 28 healthcare facilities, of which 5 were referral hospitals, 20 were community hospitals, and 5 were ambulatory clinics as of December 31, 2012 - a remarkable three year growth story

§ Total beds operated were 2,670, of which 2,209 beds at referral hospitals and 461 beds at community hospitals and  market share by number of beds was 26.6%

§ The number of insured clients was 234,000 and GHG's market share in medical insurance was 38.4% based on net insurance premium revenue, as at 30 September 2015

 

 

 

Real estate business (m2 Real Estate)

 

Our Real Estate business is operated through the Bank's wholly-owned subsidiary m2 Real Estate, which develops residential property in Georgia. m2 Real Estate outsources the construction and architecture works whilst itself focusing on project management and sales. The Bank's Real Estate business serves to meet the unsatisfied demand in Tbilisi for housing through its well-established branch network and sales force, while stimulating the Bank's mortgage lending business.

 

 

Income statement

GEL thousands, unless otherwise noted

 

4Q15

 

4Q14

Change y-o-y

 

3Q15

Change q-o-q

2015

2014

Change,

y-o-y










Real estate revenue

47,465

9,585

NMF

854

NMF

53,852

60,455

Cost of real estate

(34,869)

(7,439)

NMF

(230)

NMF

(39,721)

(46,810)

Gross real estate profit 

12,596

2,146

NMF

624

NMF

14,131

13,645

Gross other investment profit 

7,277

30

NMF

63

NMF

7,502

107

Revenue 

19,873

2,176

NMF

687

NMF

21,633

13,752

Salaries and other employee benefits

(356)

(317)

12.3%

(204)

74.5%

(1,150)

(1,177)

Administrative expenses

(1,515)

(1,045)

45.0%

(879)

72.4%

(4,710)

(3,959)

Operating expenses 

(1,871)

(1,362)

37.4%

(1,083)

72.8%

(5,860)

(5,136)

EBITDA

18,002

814

NMF

(396)

NMF

15,773

8,616

Depreciation and amortization of investment business

(55)

(60)

-8.3%

(51)

7.8%

(191)

(332)

Net foreign currency loss from investment business

(836)

(468)

78.6%

(1,230)

-32.0%

(1,534)

(896)

Interest income from investment business 

-

127

-100.0%

(6)

-100.0%

386

254

Interest expense from investment business

(173)

(168)

3.0%

(155)

11.6%

(1,566)

(778)

Net operating income before non-recurring items 

16,938

245

NMF

(1,838)

NMF

12,868

6,798

Net non-recurring items 

(7)

-

-

10

NMF

(137)

18

Profit before income tax 

16,931

245

NMF

(1,828)

NMF

12,731

6,816

Income tax (expense) benefit

(2,604)

(37)

NMF

274

NMF

(1,974)

(1,022)

Profit 

14,327

208

NMF

(1,554)

NMF

10,757

5,794

 

 

Performance highlights

§ Following completion of its Tamarashvili Street project with 522 apartments in 2014, m2 Real Estate completed another project on Nutsubidze Street with 221 apartments, in 2015. Full details on ongoing and completed projects are provided below.

§ m2 Real Estate recorded strong revenue growth in 2015, increasing to GEL 21.6mln in 2015, up 57.3% y-o-y, driven by strong project execution and sales performance. Gross real estate profit, which reflects residential property development and sales operations of m2 Real Estate, increased to GEL 14.1mln, up 3.6% y-o-y, primarily driven by strong sales performance in relation to the Nutsubidze Street project

§ m2 Real Estate sold a total of 347 apartments with a sales value of US$ 29.7mln in 2015, compared to 573 apartments sold with a sales value of US$ 46.7mln in 2014. At its three projects which have already been completed with a total of 866 apartments, m2 Real Estate currently has a stock of only 21 apartments unsold. At its five ongoing  projects with a total capacity of 1,641 apartments, 799 apartments or 49% are already sold

§ Pursuant to m2 Real Estate's current revenue recognition policy (in line with IAS 18),  revenue is recognised at the full completion of the project. Because of its revenue recognition policy, m2 Real Estate had accumulated US$ 57.1mln sales from its ongoing projects by the end of 2015, which will be recognised as revenue upon completion of the on-going projects in 2016-2018 (of which c. US$ 43mln is expected to be recognised in 2016)

§ m2 Real Estate has completed all of its projects on or ahead of time and within budget. Additionally, m2 Real Estate started construction of 2 new projects in 2015 with a total of 838 apartments. One of these projects is the largest ever carried out by m2 Real Estate, with a total of 818 apartments in a central location in Tbilisi. Another project is also a new type of project for m2 Real Estate, representing an luxury residential building in Old Tbilisi neighbourhood with few apartments (19 in total) and relatively high price tag

§ In summary, m2 Real Estate has started 8 projects since its establishment in 2010, of which three have already been completed, and construction of 5 is on-going. 4 of them are expected to be completed in 2016 and 1 more is expected to be completed in 2018. Currently, only 863 units are available for sale out of total of 2,507 apartments developed or being at different stages of development. We have unlocked total land value of US$ 8.5mln from the three completed projects and additional US$ 16.8mln in land value is expected to be unlocked from the five on-going projects

§ The number of apartments financed with BOG mortgages in all m2 Real Estate projects as of the date of this announcement totalled 788, with an aggregate amount of GEL 86.7mln

§ m2 Real Estate recognised significant increase in gross other investment profit to GEL 7.5mln, up from GEL 0.1mln a year ago. This is the net effect of the general property revaluation of the land-plots and buildings owned by m2 Real Estate.

§ Growth in revenue largely outpaced growth in operating expenses, resulting in 83.1% y-o-y growth in EBITDA to GEL 15.8mln in 2015, which eventually translated into GEL 10.8mln profit, up 85.7% y-o-y

 

 

Project performance highlights

Ongoing projects (5 projects):

§ "Kazbegi Street" - 264 (89%) of 295 apartments sold by the end of 4Q15, with total sales of US$ 24.1mln, of which US$ 9.4mln was recognized as revenue. The project was started in December 2013, construction is 90% completed as of the date of this release and is expected to be fully completed in February 2016. Upon the completion of this project, m2 Real Estate expects to unlock the land value of US$ 3.6mln and realize IRR of 165% from this project

§ "Tamarashvili Street II" - 189 (70%) of 270 apartments sold by the end of 4Q15, with total sales of US$ 17.6mln, which is not yet recognized as revenue. The project was started in July 2014, construction is 81% completed as of the date of this release and is expected to be fully completed in April 2016. Upon the completion of this project, m2 Real Estate expects to unlock the land value of US$ 2.7mln and realize IRR of 71% from this project

§ "Moscow avenue" - 137 (58%) of 238 apartments sold by the end of 4Q15, with total sales of US$ 6.4mln, which is not yet recognized as revenue. This project was launched within m2 Real Estate's new low-cost apartment initiative and offers unprecedented affordable price of as low as US$ 29,000 for refurbished 1 bedroom apartments. The project was started in September 2014, construction is 76% completed as of the date of this release and is expected to be fully completed in March 2016. Upon the completion of this project, m2 Real Estate expects to unlock the land value of US$ 1.6mln and realize IRR of 31% from this project

§ "Kartozia Street", construction on-going - 204 (25%) of 819 apartments sold by the end of 4Q15, with total sales of US$ 14.0mln, which is not yet recognized as revenue. The pre-sales started in July 2015 and construction phase of the project started in November 2015. Construction is 6% completed as of the date of this report and it is expected to be fully completed in September 2018. Upon the completion of this project, m2 Real Estate expects to unlock the land value of US$ 5.8mln and realize IRR of 31% from this project

§ "Skyline" (the first premium apartments offered by m2 Real Estate), construction on-going - 5 (26%) of 19 apartments sold by the end of 4Q15, with total sales of US$ 2.1mln, which is not yet recognized as revenue. The pre-sales started and the construction phase of the project started in December 2015 and it is expected to be fully completed in December 2016. Upon the completion of this project, m2 Real Estate expects to unlock the land value of US$ 3.1mln and realize IRR of 329% from this project

 

Completed projects (3 projects):

§ "Chubinashvili street" - 123 (100%) of 123 apartments sold by the end of 3Q15, with total sales of US$ 9.9mln, which is fully recognised as revenue. The project was started in September 2010 and completed in August 2012. We unlocked the land value of US$ 0.9mln and realised Internal Rate of Return ("IRR") of 47% from this project

§ "Tamarashvili street" - 521 (99%) of 522 apartments sold by the end of 4Q15, with total sales of US$ 47.8mln, of which US$ 47.6mln was recognized as revenue. The project was started in May 2012 and completed in June 2014, four months ahead of schedule. We unlocked the land value of US$ 5.4mln and realized IRR of 46% from this project

§ "Nutsubidze Street" - 201 (91%) of 221 apartments sold by the end of 4Q15, with total sales of US$ 16.1mln, of which US$ 14.1mln was recognized as revenue. The project was started in December 2013 and completed in September 2015, one month ahead of completion deadline. Upon the sale of remaining units, m2 Real Estate expects to unlock the land value of US$ 2.2mln and realize IRR of 58% from this project


SELECTED FINANCIAL INFORMATION

 


BGEO Consolidated


Banking Business




Investment Business


Eliminations

INCOME STATEMENT QUARTERLY

4Q15

4Q14

Change

3Q15

Change


4Q15

4Q14

Change

3Q15

Change


4Q15

4Q14

Change

3Q15

Change


4Q15

4Q14

3Q15

GEL thousands, unless otherwise noted



Y-O-Y


Q-O-Q




Y-O-Y


Q-O-Q




Y-O-Y


Q-O-Q



























 Banking interest income 

228,212

161,368

41.4%

219,999

3.7%


230,833

163,829

40.9%

223,800

3.1%


-

-

-

-

-


(2,621)

(2,461)

(3,801)

 Banking interest expense 

(96,778)

(63,236)

53.0%

(93,821)

3.2%


(96,616)

(62,768)

53.9%

(94,551)

2.2%


-

-

-

-

-


(162)

(468)

730

 Net banking interest income 

131,434

98,132

33.9%

126,178

4.2%


134,217

101,061

32.8%

129,249

3.8%


-

-

-

-

-


(2,783)

(2,929)

(3,071)

 Fee and commission income 

42,110

34,469

22.2%

41,114

2.4%


42,856

34,865

22.9%

41,532

3.2%


-

-

-

-

-


(746)

(396)

(418)

 Fee and commission expense 

(10,471)

(8,110)

29.1%

(10,323)

1.4%


(10,590)

(8,110)

30.6%

(10,471)

1.1%


-

-

-

-

-


119

-

148

 Net fee and commission income 

31,639

26,359

20.0%

30,791

2.8%


32,266

26,755

20.6%

31,061

3.9%


-

-

-

-

-


(627)

(396)

(270)

 Net banking foreign currency gain

19,525

16,643

17.3%

18,675

4.6%


19,525

16,643

17.3%

18,675

4.6%


-

-

-

-

-


-

-

-

 Net other banking income

9,318

4,872

91.3%

4,938

88.7%


9,699

5,146

88.5%

5,231

85.4%


-

-

-

-

-


(381)

(274)

(293)

 Net insurance premiums earned

24,476

17,900

36.7%

24,151

1.3%


10,810

7,651

41.3%

10,332

4.6%


14,500

10,906

33.0%

14,363

1.0%


(834)

(657)

(544)

 Net insurance claims incurred

(17,743)

(14,212)

24.8%

(14,368)

23.5%


(5,369)

(3,268)

64.3%

(4,503)

19.2%


(12,374)

(10,944)

13.1%

(9,865)

25.4%


-

-

-

 Gross insurance profit 

6,733

3,688

82.6%

9,783

-31.2%


5,441

4,383

24.1%

5,829

-6.7%


2,126

(38)

NMF

4,498

-52.7%


(834)

(657)

(544)

 Healthcare revenue

53,089

40,039

32.6%

49,670

6.9%


-

-

-

-

-


53,089

40,039

32.6%

49,670

6.9%


-

-

-

 Cost of healthcare services

(29,244)

(23,708)

23.4%

(27,552)

6.1%


-

-

-

-

-


(29,244)

(23,708)

23.4%

(27,552)

6.1%


-

-

-

 Gross healthcare profit 

23,845

16,331

46.0%

22,118

7.8%


-

-

-

-

-


23,845

16,331

46.0%

22,118

7.8%


-

-

-

 Real estate revenue

47,638

9,584

397.1%

981

4756.1%


-

-

-

-

-


47,638

9,585

397.0%

981

4756.1%


-

-

-

 Cost of real estate

(34,869)

(7,439)

NMF

(230)

NMF


-

-

-

-

-


(34,869)

(7,439)

NMF

(230)

NMF


-

-

-

 Gross real estate profit 

12,769

2,145

495.3%

751

1600.3%


-

-

-

-

-


12,769

2,146

495.0%

751

1600.3%


-

-

-

 Gross other investment profit 

11,271

4,141

172.2%

3,373

234.2%


-

-

-

-

-


11,157

4,072

174.0%

3,229

245.5%


114

68

144

 Revenue 

246,534

172,311

43.1%

216,607

13.8%


201,148

153,988

30.6%

190,045

5.8%


49,897

22,511

121.7%

30,596

63.1%


(4,511)

(4,188)

(4,034)

 Salaries and other employee benefits

(47,158)

(40,693)

15.9%

(47,385)

-0.5%


(39,304)

(34,655)

13.4%

(39,768)

-1.2%


(8,487)

(6,477)

31.0%

(8,143)

4.2%


633

439

526

 Administrative expenses

(26,716)

(20,749)

28.8%

(21,044)

27.0%


(21,657)

(16,806)

28.9%

(17,320)

25.0%


(5,916)

(4,436)

33.4%

(4,047)

46.2%


857

493

323

 Banking depreciation and amortisation

(8,982)

(6,711)

33.8%

(8,505)

5.6%


(8,982)

(6,711)

33.8%

(8,505)

5.6%


-

-

-

-

-


-

-

-

 Other operating expenses 

(1,406)

(1,112)

26.4%

(628)

123.9%


(1,229)

(1,005)

22.3%

(574)

114.1%


(177)

(107)

65.4%

(54)

NMF


-

-

-

 Operating expenses 

(84,262)

(69,265)

21.7%

(77,562)

8.6%


(71,172)

(59,177)

20.3%

(66,167)

7.6%


(14,580)

(11,020)

32.3%

(12,244)

19.1%


1,490

932

849

Operating income before cost of credit risk /              EBITDA

162,272

103,046

57.5%

139,045

16.7%


129,976

94,811

37.1%

123,878

4.9%


35,317

11,491

207.3%

18,352

92.4%


(3,021)

(3,256)

(3,185)

 Profit from associates

1,938

-

-

1,444

34.2%


-

-

-

-

-


1,938

-

-

1,444

34.2%


-

-

-

Depreciation and amortization of investment business

(4,731)

(2,349)

101.4%

(4,227)

11.9%


-

-

-

-

-


(4,731)

(2,349)

101.4%

(4,227)

11.9%


-

-

-

 Net foreign currency gain from investment business

(3,416)

(1,061)

NMF

(2,311)

47.8%


-

-

-

-

-


(3,416)

(1,061)

NMF

(2,311)

47.8%


-

-

-

 Interest income from investment business 

602

321

87.5%

499

20.6%


-

-

-

-

-


957

470

103.6%

719

33.1%


(355)

(149)

(220)

 Interest expense from investment business

(3,166)

(933)

NMF

(2,080)

52.2%


-

-

-

-

-


(6,542)

(4,338)

50.8%

(5,485)

19.3%


3,376

3,405

3,405

 Operating income before cost of credit risk 

153,499

99,024

55.0%

132,370

16.0%


129,976

94,811

37.1%

123,878

4.9%


23,523

4,213

458.3%

8,492

177.0%


-

-

-

Impairment charge on loans to customers 

(33,929)

(12,310)

175.6%

(34,857)

-2.7%


(33,929)

(12,310)

175.6%

(34,857)

-2.7%


-

-

-

-

-


-

-

-

Impairment charge on finance lease receivables

(215)

(136)

58.1%

156

NMF


(215)

(136)

58.1%

156

NMF


-

-

-

-

-


-

-

-

Impairment charge on other assets and provisions

(1,878)

(4,106)

-54.3%

(946)

98.5%


(1,086)

(2,343)

-53.6%

(51)

NMF


(792)

(1,763)

-55.1%

(895)

-11.5%


-

-

-

 Cost of credit risk 

(36,022)

(16,552)

117.6%

(35,647)

1.1%


(35,230)

(14,789)

138.2%

(34,752)

1.4%


(792)

(1,763)

-55.1%

(895)

-11.5%


-

-

-

 Net operating income before non-recurring items 

117,477

82,472

42.4%

96,723

21.5%


94,746

80,022

18.4%

89,126

6.3%


22,731

2,450

827.8%

7,597

199.2%


-

-

-

 Net non-recurring items 

(6,227)

(2,093)

197.5%

(5,489)

13.4%


(2,502)

(1,518)

64.8%

(4,967)

-49.6%


(3,725)

(575)

NMF

(522)

NMF


-

-

-

 Profit before income tax 

111,250

80,379

38.4%

91,234

21.9%


92,244

78,504

17.5%

84,159

9.6%


19,006

1,875

913.7%

7,075

168.6%


-

-

-

 Income tax expense

(15,578)

(13,902)

12.1%

(10,329)

50.8%


(11,653)

(13,505)

-13.7%

(10,757)

8.3%


(3,925)

(397)

NMF

428

NMF


-

-

-

 Profit 

95,672

66,477

43.9%

80,905

18.3%


80,591

64,999

24.0%

73,402

9.8%


15,081

1,478

920.4%

7,503

101.0%


-

-

-

Attributable to:






















- shareholders of BGEO

92,287

64,225

43.7%

78,167

18.1%


79,425

64,064

24.0%

71,830

10.6%


12,862

161

7888.8%

6,337

103.0%


-

-

-

- non-controlling interests

3,385

2,252

50.3%

2,738

23.6%


1,166

935

24.7%

1,572

-25.8%


2,219

1,317

68.5%

1,166

90.3%


-

-

-























Earnings per share basic and diluted

2.42

1.82

33.0%

2.04

18.6%

















 

 

 

 

 


BGEO Consolidated


Banking Business


Investment Business


           Eliminations


 

 

INCOME STATEMENT FULL YEAR

2015

2014

Change


2015

2014

Change


2015

2014

Change


2015

2014

Change

 

 

GEL thousands, unless otherwise noted



Y-O-Y




Y-O-Y




Y-O-Y




Y-O-Y

 

 

















 

 

 Banking interest income 

859,778

593,612

44.8%


872,299

600,925

45.2%


-

-

-


(12,521)

(7,313)

71.2%

 

 

Banking interest expense 

(358,388)

(243,654)

47.1%


(359,372)

(243,654)

47.5%


-

-

-


984

-

-

 

 

 Net banking interest income 

501,390

349,958

43.3%


512,927

357,271

43.6%


-

-

-


(11,537)

(7,313)

57.8%

 

 

Fee and commission income 

158,158

132,435

19.4%


161,891

134,488

20.4%


-

-

-


(3,733)

(2,053)

81.8%

 

 

Fee and commission expense 

(39,752)

(32,643)

21.8%


(40,302)

(32,643)

23.5%


-

-

-


550

-

-

 

 

 Net fee and commission income 

118,406

99,792

18.7%


121,589

101,845

19.4%


-

-

-


(3,183)

(2,053)

55.0%

 

 

Net banking foreign currency gain

76,926

52,752

45.8%


76,926

52,752

45.8%


-

-

-


-

-

-

 

 

Net other banking income

18,528

9,270

99.9%


19,837

9,890

100.6%


-

-

-


(1,309)

(620)

111.1%

 

 

Net insurance premiums earned

92,901

95,850

-3.1%


40,161

28,129

42.8%


54,996

69,700

-21.1%


(2,256)

(1,979)

14.0%

 

 

Net insurance claims incurred

(62,994)

(66,420)

-5.2%


(20,114)

(11,707)

71.8%


(42,880)

(54,713)

-21.6%


-

-

-

 

 

 Gross insurance profit 

29,907

29,430

1.6%


20,047

16,422

22.1%


12,116

14,987

-19.2%


(2,256)

(1,979)

14.0%

 

 

 Healthcare revenue

183,993

125,720

46.4%


-

-

-


183,993

125,720

46.4%


-

-

-

 

 

 Cost of healthcare services

(103,055)

(72,237)

42.7%


-

-

-


(103,055)

(72,237)

42.7%


-

-

-

 

 

 Gross healthcare profit 

80,938

53,483

51.3%


-

-

-


80,938

53,483

51.3%


-

-

-

 

 

 Real estate revenue

54,409

60,376

-9.9%


-

-

-


54,409

60,456

-10.0%


-

(80)

-100.0%

 

 

 Cost of real estate

(39,721)

(46,810)

-15.1%


-

-

-


(39,721)

(46,810)

-15.1%


-

-

-

 

 

 Gross real estate profit 

14,688

13,566

8.3%


-

-

-


14,688

13,646

7.6%


-

(80)

-100.0%

 

 

 Gross other investment profit 

20,777

12,991

59.9%


-

-

-


20,639

12,804

61.2%


138

187

-26.2%

 

 

 Revenue 

861,560

621,242

38.7%


751,326

538,180

39.6%


128,381

94,920

35.3%


(18,147)

(11,858)

53.0%

 

 

 Salaries and other employee benefits

(185,329)

(154,181)

20.2%


(155,744)

(130,060)

19.7%


(31,621)

(25,651)

23.3%


2,036

1,530

33.1%

 

 

 Administrative expenses

(90,919)

(73,459)

23.8%


(74,381)

(58,833)

26.4%


(18,491)

(15,974)

15.8%


1,953

1,348

44.9%

 

 

 Banking depreciation and amortisation

(34,199)

(25,641)

33.4%


(34,199)

(25,641)

33.4%


-

-

-


-

-

-

 

 

 Other operating expenses 

(4,285)

(3,750)

14.3%


(3,535)

(3,230)

9.4%


(750)

(520)

44.2%


-

-

-

 

 

 Operating expenses 

(314,732)

(257,031)

22.4%


(267,859)

(217,764)

23.0%


(50,862)

(42,145)

20.7%


3,989

2,878

38.6%

 

 

 Operating income before cost of credit risk / EBITDA

546,828

364,211

50.1%


483,467

320,416

50.9%


77,519

52,775

46.9%


(14,158)

(8,980)

57.7%

 

 

 Profit from associates

4,050

-

-


-

-

-


4,050

-

-


-

-

-

 

 

 Depreciation and amortization of investment business

(14,225)

(9,164)

55.2%


-

-

-


(14,225)

(9,164)

55.2%


-

-

-

 

 

 Net foreign currency gain from investment business

651

(3,169)

NMF


-

-

-


651

(3,169)

NMF


-

-

-

 

 

 Interest income from investment business 

2,340

1,309

78.8%


-

-

-


3,338

1,860

79.5%


(998)

(551)

81.1%

 

 

 Interest expense from investment business

(10,337)

(6,558)

57.6%


-

-

-


(25,493)

(16,089)

58.4%


15,156

9,531

59.0%

 

 

 Operating income before cost of credit risk 

529,307

346,629

52.7%


483,467

320,416

50.9%


45,840

26,213

74.9%


-

-

-

 

 

 Impairment charge on loans to customers 

(142,819)

(45,088)

NMF


(142,819)

(45,088)

NMF


-

-

-


-

-

-

 

 

 Impairment charge on finance lease receivables

(1,958)

(476)

NMF


(1,958)

(476)

NMF


-

-

-


-

-

-

 

 

 Impairment charge on other assets and provisions

(10,600)

(13,456)

-21.2%


(6,740)

(10,168)

-33.7%


(3,860)

(3,288)

17.4%


-

-

-

 

 

 Cost of credit risk 

(155,377)

(59,020)

163.3%


(151,517)

(55,732)

171.9%


(3,860)

(3,288)

17.4%


-

-

-

 

 

 Net operating income before non-recurring items 

373,930

287,609

30.0%


331,950

264,684

25.4%


41,980

22,925

83.1%


-

-

-

 

 

 Net non-recurring items 

(14,577)

(11,017)

32.3%


(13,046)

(11,837)

10.2%


(1,531)

820

NMF


-

-

-

 

 

 Profit before income tax 

359,353

276,592

29.9%


318,904

252,847

26.1%


40,449

23,745

70.3%


-

-

-

 

 

 Income tax expense

(48,408)

(35,825)

35.1%


(44,647)

(32,343)

38.0%


(3,761)

(3,482)

8.0%


-

-

-

 

 

 Profit 

310,945

240,767

29.1%


274,257

220,504

24.4%


36,688

20,263

81.1%


-

-

-

 

 

Attributable to:
















 

 

- shareholders of BGEO

303,694

232,509

30.6%


270,466

216,883

24.7%


33,228

15,626

112.6%


-

-

-

 

 

- non-controlling interests

7,251

8,258

-12.2%


3,791

3,621

4.7%


3,460

4,637

-25.4%


-

-

-

 

 

















 

 

Earnings per share basic and diluted

7.93

6.72

18.0%













 

 

















 

 


 

 















 


BGEO Consolidated


Banking Business


Investment Business


            Eliminations


 

BALANCE SHEET

Dec-15

Dec-14

Change

Sep-15

Change


Dec-15

Dec-14

Change

Sep-15

Change


Dec-15

Dec-14

Change

Sep-15

Change


Dec-15

Dec-14

Sep-15




Y-O-Y


Q-O-Q




Y-O-Y


Q-O-Q




Y-O-Y


Q-O-Q



























Cash and cash equivalents

1,432,934

710,144

101.8%

1,320,319

8.5%


1,378,459

706,780

95.0%

1,314,696

4.9%


290,576

92,722

213.4%

166,031

75.0%


(236,101)

(89,358)

(160,408)

Amounts due from credit institutions

731,365

418,281

74.9%

706,500

3.5%


721,802

399,430

80.7%

698,110

3.4%


15,730

72,181

-78.2%

19,628

-19.9%


(6,167)

(53,330)

(11,238)

Investment securities

903,867

769,712

17.4%

897,965

0.7%


906,730

768,559

18.0%

900,845

0.7%


1,153

1,153

0.0%

1,153

0.0%


(4,016)

-

(4,033)

Loans to customers and finance lease receivables

5,322,117

4,347,851

22.4%

5,266,125

1.1%


5,366,764

4,438,032

20.9%

5,367,311

0.0%


-

-

-

-

-


(44,647)

(90,181)

(101,186)

Accounts receivable and other loans

87,972

70,207

25.3%

87,348

0.7%


10,376

12,653

-18.0%

13,291

-21.9%


82,354

61,836

33.2%

79,989

3.0%


(4,758)

(4,282)

(5,932)

Insurance premiums receivable

39,226

31,840

23.2%

55,700

-29.6%


19,829

14,573

36.1%

28,413

-30.2%


20,929

18,020

16.1%

29,165

-28.2%


(1,532)

(753)

(1,878)

Prepayments

58,328

33,774

72.7%

40,330

44.6%


21,033

15,644

34.4%

21,374

-1.6%


37,295

18,130

105.7%

18,956

96.7%


-

-

-

Inventories

127,027

101,442

25.2%

148,777

-14.6%


9,439

6,857

37.7%

10,929

-13.6%


117,588

94,585

24.3%

137,848

-14.7%


-

-

-

Investment property

246,398

190,860

29.1%

224,028

10.0%


135,453

128,552

5.4%

143,469

-5.6%


110,945

62,308

78.1%

80,559

37.7%


-

-

-

Property and equipment

794,682

588,513

35.0%

775,599

2.5%


337,064

314,369

7.2%

339,300

-0.7%


457,618

274,144

66.9%

436,299

4.9%


-

-

-

Goodwill

72,984

49,633

47.0%

70,876

3.0%


49,592

38,537

28.7%

49,592

0.0%


23,392

11,096

110.8%

21,284

9.9%


-

-

-

Intangible assets

40,516

34,432

17.7%

38,438

5.4%


35,162

31,768

10.7%

34,390

2.2%


5,354

2,664

101.0%

4,048

32.3%


-

-

-

Income tax assets

35,904

22,745

57.9%

38,666

-7.1%


30,357

14,484

109.6%

30,938

-1.9%


5,547

8,261

-32.9%

7,728

-28.2%


-

-

-

Other assets

236,773

209,711

12.9%

267,218

-11.4%


163,731

153,764

6.5%

187,378

-12.6%


79,479

58,407

36.1%

91,997

-13.6%


(6,437)

(2,460)

(12,157)

Total assets

10,130,093

7,579,145

33.7%

9,937,889

1.9%


9,185,791

7,044,002

30.4%

9,140,036

0.5%


1,247,960

775,507

60.9%

1,094,685

14.0%


(303,658)

(240,364)

(296,832)

Client deposits and notes

4,751,387

3,338,725

42.3%

4,477,908

6.1%


4,993,681

3,482,001

43.4%

4,649,572

7.4%


-

-

-

-

-


(242,294)

(143,276)

(171,664)

Amounts due to credit institutions

1,789,062

1,409,214

27.0%

2,115,859

-15.4%


1,692,557

1,324,609

27.8%

2,011,801

-15.9%


144,534

177,313

-18.5%

209,898

-31.1%


(48,029)

(92,708)

(105,840)

Debt securities issued

1,039,804

856,695

21.4%

1,076,137

-3.4%


961,944

827,721

16.2%

999,959

-3.8%


84,474

29,374

187.6%

83,549

1.1%


(6,614)

(400)

(7,371)

Accruals and deferred income

146,852

108,623

35.2%

166,435

-11.8%


20,364

19,897

2.3%

16,629

22.5%


126,488

88,726

42.6%

149,806

-15.6%


-

-

-

Insurance contracts liabilities

55,845

46,586

19.9%

66,608

-16.2%


34,547

27,979

23.5%

40,369

-14.4%


21,298

18,607

14.5%

26,239

-18.8%


-

-

-

Income tax liabilities

138,749

97,564

42.2%

127,490

8.8%


104,334

79,987

30.4%

96,214

8.4%


34,415

17,577

95.8%

31,276

10.0%


-

-

-

Other liabilities

134,756

87,645

53.8%

149,493

-9.9%


63,073

51,031

23.6%

77,454

-18.6%


78,404

40,594

93.1%

83,996

-6.7%


(6,721)

(3,980)

(11,957)

Total liabilities

8,056,455

5,945,052

35.5%

8,179,930

-1.5%


7,870,500

5,813,225

35.4%

7,891,998

-0.3%


489,613

372,191

31.5%

584,764

-16.3%


(303,658)

(240,364)

(296,832)

Share capital

1,154

1,143

1.0%

1,154

0.0%


1,154

1,143

1.0%

1,154

0.0%


-

-

-

-

-


-

-

-

Additional paid-in capital

240,593

245,305

-1.9%

252,090

-4.6%


101,793

87,950

15.7%

40,622

150.6%


138,800

157,355

-11.8%

211,468

-34.4%


-

-

-

Treasury shares

(44)

(46)

-4.3%

(36)

22.2%


(44)

(46)

-4.3%

(36)

22.2%


-

-

-

-

-


-

-

-

Other reserves

32,844

(22,574)

NMF

(74,266)

NMF


(63,958)

(11,073)

NMF

(64,648)

-1.1%


96,802

(11,501)

NMF

(9,618)

NMF


-

-

-

Retained earnings

1,577,050

1,350,258

16.8%

1,488,963

5.9%


1,257,415

1,134,158

10.9%

1,252,178

0.4%


319,635

216,100

47.9%

236,785

35.0%


-

-

-

Total equity attributable to shareholders of the Group

1,851,597

1,574,086

17.6%

1,667,905

11.0%


1,296,360

1,212,132

6.9%

1,229,270

5.5%


555,237

361,954

53.4%

438,635

26.6%


-

-

-

Non-controlling interests

222,041

60,007

270.0%

90,054

146.6%


18,931

18,645

1.5%

18,768

0.9%


203,110

41,362

391.1%

71,286

184.9%


-

-

-

Total equity

2,073,638

1,634,093

26.9%

1,757,959

18.0%


1,315,291

1,230,777

6.9%

1,248,038

5.4%


758,347

403,316

88.0%

509,921

48.7%


-

-

-

Total liabilities and equity

10,130,093

7,579,145

33.7%

9,937,889

1.9%


9,185,791

7,044,002

30.4%

9,140,036

0.5%


1,247,960

775,507

60.9%

1,094,685

14.0%


(303,658)

(240,364)

(296,832)

Book value per share

48.75

41.45

17.6%

43.60

11.8%

















 

 

 

 

 

 

 


Georgia Healthcare Group

Income statement, full year

Healthcare services

Medical insurance

Eliminations

Total

 

GEL thousands; unless otherwise noted

2015

2014

Change, Y-o-Y

2015

2014

Change, Y-o-Y

2015

2014


2015

2014

Change, Y-o-Y














Revenue, gross

195,032

147,165

32.5%

55,256

69,759

-20.8%

(7,615)

(18,776)


242,673

198,148

22.5%

Corrections & rebates

(3,608)

(1,816)

98.7%

-

-

-

-

-


(3,608)

(1,816)

98.7%

Revenue, net

191,424

145,349

31.7%

55,256

69,759

-20.8%

(7,615)

(18,776)


239,065

196,332

21.8%

Costs of services

(107,291)

(83,298)

28.8%

(46,076)

(61,233)

-24.8%

7,431

18,465


(145,936)

(126,066)

15.8%

Cost of salaries and other employee benefits

(68,014)

(53,949)

26.1%

-

-


2,685

7,445


(65,329)

(46,504)

40.5%

Cost of materials and supplies

(29,097)

(18,139)

60.4%

-

-


1,149

2,503


(27,948)

(15,636)

78.7%

Cost of medical service providers

(2,423)

(4,517)

-46.3%

-

-


96

623


(2,327)

(3,894)

-40.2%

Cost of utilities and other

(7,757)

(6,693)

15.9%

-

-


306

924


(7,451)

(5,769)

29.2%

Net insurance claims incurred

-

-


(46,076)

(61,233)

-24.8%

3,195

6,970


(42,881)

(54,263)

-21.0%

Gross profit

84,133

62,051

35.6%

9,180

8,526

7.7%

(184)

(311)


93,129

70,266

32.5%

Salaries and other employee benefits

(23,075)

(16,055)

43.7%

(3,642)

(4,060)

-10.3%

202

311


(26,515)

(19,804)

33.9%

General and administrative expenses

(7,860)

(6,933)

13.4%

(2,660)

(2,516)

5.7%

3

-


(10,517)

(9,449)

11.3%

Impairment of healthcare services, insurance premiums and other receivables

(3,140)

(4,209)

-25.4%

(308)

(925)

-66.7%

-

-


(3,448)

(5,134)

-32.8%

Other operating income

3,468

937

270.2%

43

46

-5.5%

(21)

-


3,490

983

255.0%

EBITDA

53,526

35,791

49.6%

2,613

1,071

144.0%

-

-


56,139

36,862

52.3%

EBITDA margin

27.4%

24.3%


4.7%

1.5%





23.1%

18.6%


Depreciation and amortisation

(11,973)

(6,998)

71.1%

(692)

(632)

9.6%

-

-


(12,665)

(7,630)

66.0%

Net interest income (expense)

(20,352)

(13,138)

54.9%

71

332

-78.7%

-

-


(20,281)

(12,806)

58.4%

Net gains/(losses) from foreign currencies

1,312

(2,820)

NMF

785

326

141.3%

-

-


2,097

(2,494)

NMF

Net non-recurring income/(expense)

(960)

578

NMF

(722)

-

NMF

-

-


(1,682)

578

NMF

Profit before income tax expense

21,553

13,413

60.7%

2,055

1,097

87.3%

-

-


23,608

14,510

62.7%

Income tax benefit/(expense)

307

(1,145)

NMF

(298)

(101)

195.1%

-

-


9

(1,246)

NMF

Profit for the period

21,860

12,268

78.2%

1,757

996

76.4%

-

-


23,617

13,264

78.1%














Attributable to:













  - shareholders of GHG PLC

17,894

9,211

94.3%

1,757

996

76.4%

-

-


19,651

10,207

92.5%

  - non-controlling interests

3,966

3,057

29.7%

-

-

-

-

-


3,966

3,057

29.7%


Georgia Healthcare Group

Income statement, quarterly

Healthcare services

Medical insurance

Eliminations

Total

GEL thousands; unless otherwise noted

4Q15

4Q14

Change, Y-o-Y

3Q15

Change, Q-o-Q

4Q15

4Q14

Change, Y-o-Y

3Q15

Change, Q-o-Q

4Q15

4Q14

3Q15

4Q15

4Q14

Change, Y-o-Y

3Q15

Change, Q-o-Q

 




















 

Revenue, gross

55,481

44,143

25.7%

51,131

8.5%

14,532

10,588

37.3%

14,359

1.2%

(1,293)

(467)

(2,135)

   68,720

   54,264

26.6%

   63,355

8.5%

 

Corrections & rebates

(1,086)

(643)

68.9%

(680)

59.7%

-

-

-

-

-

-

-

-

     (1,086)

        (643)

68.9%

        (680)

59.7%

 

Revenue

54,395

43,500

25.0%

50,451

7.8%

14,532

10,588

37.3%

14,359

1.2%

(1,293)

(467)

(2,135)

   67,634

   53,621

26.1%

   62,675

7.9%

 

Costs of services

(30,007)

(23,854)

25.8%

(28,821)

4.1%

(12,917)

(10,962)

17.8%

(11,286)

14.4%

1,306

375

2,101

 (41,618)

 (34,441)

20.8%

 (38,006)

9.5%

 

Cost of salaries and other employee benefits

(18,256)

(15,529)

17.6%

(18,736)

-2.6%

-

-


-


449

33

794

   (17,807)

   (15,496)

14.9%

   (17,942)

-0.8%

 

Cost of materials and supplies

(8,871)

(5,557)

59.6%

(7,503)

18.2%

-

-


-


240

76

318

     (8,631)

     (5,481)

57.5%

     (7,185)

20.1%

 

Cost of medical service providers

(593)

(888)

-33.2%

(848)

-30.1%

-

-


-


13

(205)

37

        (580)

     (1,093)

-46.9%

        (811)

-28.5%

 

Cost of utilities and other

(2,287)

(1,880)

21.7%

(1,734)

31.9%

-

-


-


60

-

72

     (2,227)

     (1,880)

18.5%

     (1,662)

34.0%

 

Net insurance claims incurred

-

-


-


(12,917)

(10,962)

17.8%

(11,286)

14.4%

544

471

880

   (12,373)

   (10,491)

17.9%

   (10,406)

18.9%

 

Gross profit

24,388

19,646

24.1%

21,630

12.7%

1,615

(374)

NMF

3,073

-47.5%

13

(92)

(34)

   26,016

   19,180

35.6%

   24,669

5.5%

 

Salaries and other employee benefits

(6,178)

(4,933)

25.2%

(6,060)

1.9%

(636)

(485)

31.2%

(1,078)

-41.0%

4

92

34

     (6,810)

     (5,326)

27.9%

     (7,104)

-4.1%

 

General and administrative expenses

(2,219)

(2,147)

3.3%

(1,954)

13.5%

(839)

(660)

27.2%

(558)

50.3%

-

-

2

     (3,058)

     (2,807)

8.9%

     (2,510)

21.8%

 

Impairment of healthcare services, insurance premiums and other receivables

(460)

(2,888)

-84.1%

(943)

-51.3%

(152)

(573)

-73.4%

(47)

225.5%

-

-

-

        (612)

     (3,461)

-82.3%

        (990)

-38.2%

 

Other operating income

1,008

(381)

NMF

1,969

-48.8%

(5)

(70)

-92.9%

(3)

97.3%

(17)

-

(2)

          986

        (451)

 NMF

       1,964

-49.8%

 

EBITDA

16,539

9,297

77.9%

14,642

13.0%

(17)

(2,162)

-99.2%

1,387

NMF

-

-

-

   16,522

     7,135

131.6%

   16,029

3.1%

 

EBITDA margin

29.8%

21.1%


28.6%


-0.1%

-20.4%


9.7%





24.0%

13.1%


25.3%


 

Depreciation and amortisation

(4,046)

(1,813)

123.2%

(3,327)

21.6%

(249)

(157)

58.5%

(155)

60.9%

-

-

-

     (4,295)

     (1,970)

118.0%

     (3,482)

23.3%

 

Net interest income (expense)

(5,535)

(3,633)

52.4%

(4,733)

16.9%

158

71

121.1%

(53)

NMF

-

-

-

     (5,377)

     (3,562)

51.0%

     (4,786)

12.3%

 

Net gains/(losses) from foreign currencies

(1,586)

(166)

NMF

(1,982)

-20.0%

(6)

176

NMF

223

NMF

-

-

-

     (1,592)

            10

 NMF

     (1,759)

-9.5%

 

Net non-recurring income/(expense)

484

(791)

NMF

(677)

NMF

(676)

31

NMF

(46)

NMF

-

-

-

        (192)

        (760)

-74.7%

        (723)

-73.4%

 

Profit before income tax expense

5,856

2,894

102.3%

3,923

49.3%

(790)

(2,041)

-61.3%

1,356

NMF

-

-

-

     5,066

         853

493.9%

     5,279

-4.0%

 

Income tax benefit/(expense)

(206)

(290)

-28.9%

(195)

6.0%

192

381

-49.7%

164

16.6%

-

-

-

          (14)

            91

 NMF

          (31)

-54.8%

 

Profit for the period

5,650

2,604

117.0%

3,728

51.6%

(598)

(1,660)

-64.0%

1,520

NMF

-

-

-

     5,052

         944

435.2%

     5,248

-3.7%

 















              

             


              


 

Attributable to:














             

              


              


 

  - shareholders of GHG PLC

4,421

1,767

150.2%

2,453

80.3%

(598)

(1,660)

-64.0%

1,520

NMF

-

-

-

       3,823

          107

NMF

       3,973

-3.8%

 

  - non-controlling interests

1,229

837

46.9%

1,275

-3.6%

-

-

-

-

-

-

-

-

       1,229

          837

46.8%

       1,275

-3.6%

 


 

P&C Insurance (Aldagi)

 

INCOME STATEMENT HIGHLIGHTS

GEL thousands, unless otherwise stated


4Q15

4Q14

Change

3Q15

Change

2015

2014

Change





Y-O-Y


Q-O-Q



Y-O-Y











 Net banking interest income 


590

258

128.7%

628

-6.1%

2,330

506

NMF

 Net fee and commission income 


87

71

22.5%

80

8.7%

310

312

-0.6%

 Net banking foreign currency gain


(126)

(2,145)

-94.1%

(1,096)

-88.5%

993

(2,085)

NMF

 Net other banking income


351

118

197.5%

254

38.2%

993

515

92.8%

 Gross insurance profit 


5,423

4,818

12.6%

6,297

-13.9%

21,180

17,753

19.3%

 Revenue 


6,325

3,120

102.7%

6,163

2.6%

25,806

17,001

51.8%

 Operating expenses 


(2,746)

(2,897)

-5.2%

(2,959)

-7.2%

(11,199)

(9,403)

19.1%

 Operating income before cost of credit risk and non-recurring items


3,579

223

NMF

3,204

11.7%

14,607

7,598

92.2%

 Cost of credit risk 


(244)

(230)

6.1%

(199)

22.6%

(710)

(601)

18.1%

 Net non-recurring items


(701)

-

-

-

-

(701)

-

-

 Profit before income tax 


2,634

(7)

NMF

3,005

-12.3%

13,196

6,997

88.6%

 Income tax (expense) benefit


(467)

17

NMF

(503)

-7.2%

(731)

(1,083)

-32.5%

 Profit 


2,167

10

NMF

2,502

-13.4%

12,465

5,914

110.8%

 

 

 

 

 

Belarusky Narodny Bank (BNB)

 

INCOME STATEMENT, HIGHLIGHTS

GEL thousands, unless otherwise stated

4Q15

4Q14

Change

3Q15

Change

2015

2014

Change




Y-O-Y


Q-O-Q



Y-O-Y










 Net banking interest income 

7,590

6,259

21.3%

7,650

-0.8%

29,307

22,410

30.8%

 Net fee and commission income 

2,133

2,659

-19.8%

2,149

-0.7%

9,198

9,443

-2.6%

 Net banking foreign currency gain

2,011

4,851

-58.5%

6,340

-68.3%

17,036

9,932

71.5%

 Net other banking income

1,776

141

NMF

190

NMF

2,199

504

NMF

 Revenue 

13,510

13,910

-2.9%

16,329

-17.3%

57,740

42,289

36.5%

 Operating expenses 

(6,068)

(5,317)

14.1%

(4,722)

28.5%

(19,731)

(18,390)

7.3%

 Operating income before cost of credit risk

7,442

8,593

-13.4%

11,607

-35.9%

38,009

23,899

59.0%

 Cost of credit risk 

(7,651)

(2,046)

NMF

(1,292)

NMF

(19,270)

(4,187)

NMF

 Net non-recurring items 

3,217

(666)

NMF

(323)

NMF

1,478

(3,073)

NMF

 Profit before income tax 

3,008

5,881

-48.9%

9,992

-69.9%

20,217

16,639

21.5%

 Income tax (expense) benefit

1,801

(1,677)

NMF

(2,342)

NMF

(2,754)

(962)

186.3%

 Profit 

4,809

4,204

14.4%

7,650

-37.1%

17,463

15,677

11.4%

 

 

BALANCE SHEET, HIGHLIGHTS

GEL thousands, unless otherwise stated

31-Dec-15

31-Dec-14

Change Y-O-Y

30-Sep-15

Change Q-O-Q

Cash and cash equivalents

109,758

76,559

43.4%

95,395

15.1%

Amounts due from credit institutions

3,906

3,461

12.9%

3,769

3.6%

Loans to customers and finance lease receivables

320,114

265,952

20.4%

315,006

1.6%

Other assets

41,705

57,792

-27.8%

67,328

-38.1%

Total assets

475,483

403,764

17.8%

481,498

-1.2%

Client deposits and notes

277,642

201,829

37.6%

270,548

2.6%

Amounts due to credit institutions

115,643

117,434

-1.5%

120,115

-3.7%

Debt securities issued

-

-

-

-

-

Other liabilities

4,685

7,252

-35.4%

8,974

-47.8%

Total liabilities

397,970

326,515

21.9%

399,637

-0.4%

Total equity attributable to shareholders of the Group

64,505

63,996

0.8%

67,989

-5.1%

Non-controlling interests

13,008

13,253

-1.8%

13,872

-6.2%

Total equity

77,513

77,249

0.3%

81,861

-5.3%

Total liabilities and equity

475,483

403,764

17.8%

481,498

-1.2%

 

 

 

 

 

 

 

 

 

 

 

 

Banking Business Key Ratios









4Q15

4Q14

3Q15


2015

2014








Profitability







ROAA, Annualised

3.5%

3.9%

3.3%


3.2%

3.5%

ROAE, Annualised

25.1%

22.7%

23.3%


21.7%

20.6%

Net Interest Margin, Annualised

7.6%

7.7%

7.6%


7.7%

7.6%

Loan Yield, Annualised

14.8%

14.1%

14.7%


14.8%

14.3%

Liquid assets yield, Annualised

3.3%

2.9%

3.1%


3.2%

2.5%

Cost of Funds, Annualised

5.1%

4.7%

5.1%


5.1%

4.8%

Cost of Client Deposits and Notes, annualised

4.4%

4.1%

4.1%


4.3%

4.2%

Cost of Amounts Due to Credit Institutions, annualised

5.9%

4.8%

6.3%


5.8%

4.8%

Cost of Debt Securities Issued

6.8%

7.2%

7.3%


7.1%

7.2%

Operating Leverage, Y-O-Y

10.4%

2.4%

18.7%


16.6%

-1.8%

Operating Leverage, Q-O-Q

-1.7%

5.0%

2.7%


0.0%

0.0%

Efficiency







Cost / Income

35.4%

38.4%

34.8%


35.7%

40.5%

Liquidity







NBG Liquidity Ratio

46.2%

35.0%

40.5%


46.2%

35.0%

Liquid Assets To Total Liabilities

38.2%

32.3%

36.9%


38.2%

32.3%

Net Loans To Client Deposits and Notes

107.5%

127.5%

115.4%


107.5%

127.5%

Net Loans To Client Deposits and Notes + DFIs

90.8%

108.6%

95.9%


90.8%

108.6%

Leverage (Times)

6.0

4.7

6.3


6.0

4.7

Asset Quality:







NPLs (in GEL)

241,142

153,628

221,590


241,142

153,628

NPLs To Gross Loans To Clients

4.3%

3.4%

4.0%


4.3%

3.4%

NPL Coverage Ratio

83.4%

68.0%

82.1%


83.4%

67.5%

NPL Coverage Ratio, Adjusted for discounted value of collateral

120.6%

110.6%

121.9%


120.6%

110.6%

Cost of Risk, Annualised

2.4%

1.2%

2.5%


2.7%

1.2%

Capital Adequacy:







New NBG (Basel 2/3) Tier I Capital Adequacy Ratio

10.9%

11.1%

10.2%


10.9%

11.1%

New NBG (Basel 2/3) Total Capital Adequacy Ratio

16.7%

14.1%

15.8%


16.7%

14.1%

Old NBG Tier I Capital Adequacy Ratio

9.3%

13.3%

9.2%


9.3%

13.3%

Old NBG Total Capital Adequacy Ratio

16.9%

13.8%

16.0%


16.9%

13.8%

Selected Operating Data:







Total Assets Per FTE, BOG Standalone

2,031

1,868

2,060


2,031

1,868

Number Of Active Branches, Of Which:

266

219

260


266

219

 - Flagship Branches

35

34

35


35

34

 - Standard Branches

117

101

115


117

101

 - Express Branches (including Metro)

114

84

110


114

84

Number Of ATMs

746

523

703


746

523

Number Of Cards Outstanding, Of Which:

1,958,377

1,156,631

1,940,627


1,958,377

1,156,631

 - Debit cards

1,204,103

1,040,016

1,210,914


1,204,103

1,040,016

 - Credit cards

754,274

116,615

729,713


754,274

116,615

Number Of POS Terminals

8,102

6,320

7,685


8,102

6,320

 

 

 

 

 

 

 

 

Other information

 

In accordance with the Listing Rules of the UK Listing Authority, these preliminary results have been agreed with the Company's auditors, Ernst &Young LLP, and the Directors have not been made aware of any likely modification to the auditor's report to be included in the Group's Annual Report and Accounts for the year ended 31 December 2015

 

The preliminary results have been prepared on a basis consistent with the accounting policies set out in the Group's statutory financial statements for the year ended 31 December 2014

 

 

 

 

 

 

Glossary

1.     Return on average total assets (ROAA) equals Profit for the period divided by monthly average total assets for the same period;

2.     Return on average total equity (ROAE) equals Profit for the period attributable to shareholders of the Group divided by monthly average equity attributable to shareholders of the BGEO for the same period;

3.     Net Interest Margin equals Net Banking Interest Income of the period divided by monthly Average Interest Earning Assets Excluding Cash for the same period; Interest Earning Assets Excluding Cash comprise: Amounts Due From Credit Institutions, Investment Securities (but excluding corporate shares) and net Loans To Customers And Finance Lease Receivables;

4.     Loan Yield equals Banking Interest Income From Loans To Customers And Finance Lease Receivables divided by monthly Average Gross Loans To Customers And Finance Lease Receivables;

5.     Cost of Funds equals banking interest expense of the period divided by monthly average interest bearing liabilities; interest bearing liabilities include: amounts due to credit institutions, client deposits and notes and debt securities issued;

6.     Operating Leverage equals percentage change in revenue less percentage change in operating expenses;

7.     Cost / Income Ratio equals operating expenses divided by revenue;

8.     Daily average liquid assets (as defined by NBG) during the month  divided by daily average liabilities (as defined by NBG) during the month;

9.     Liquid assets include: cash and cash equivalents, amounts due from credit institutions and investment securities;

10.   Leverage (Times) equals total liabilities divided by total equity;

11.   NPL Coverage Ratio equals allowance for impairment of loans and finance lease receivables divided by NPLs;

12.   NPL Coverage Ratio adjusted for discounted value of collateral equals allowance for impairment of loans and finance lease receivables divided by NPLs (discounted value of collateral is added back to allowance for impairment)

13.   Cost of Risk equals impairment charge for loans to customers and finance lease receivables for the period divided by monthly average gross loans to customers and finance lease receivables over the same period;

14.   New NBG (Basel 2/3) Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements the National Bank of Georgia instructions;

15.   New NBG (Basel 2/3) Total Capital Adequacy ratio equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions;

16.   Old NBG Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements the National Bank of Georgia instructions;

17.   Old NBG Total Capital Adequacy ratio equals total capital divided by total risk weighted Assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions;

18.   NMF - Not meaningful

19.   Constant currency basis - changes assuming constant exchange rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANY INFORMATION

 

BGEO Group PLC

 

Registered Address

84 Brook Street

London W1K 5EH

United Kingdom

www.BGEO.com

Registered under number 7811410 in England and Wales

Incorporation date: 14 October 2011

 

Stock Listing

London Stock Exchange PLC's Main Market for listed securities

Ticker: "BGEO.LN"

 

Contact Information

BGEO Group PLC Investor Relations

Telephone: +44 (0) 20 3178 4052; +995 322 444 205

E-mail: ir@bog.ge

www.BGEO.com

 

Auditors

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London E14 5EY

United Kingdom

 

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgewater Road

Bristol BS13 8AE

United Kingdom

 

Please note that Investor Centre is a free, secure online service run by our Registrar, Computershare, giving you convenient access to information on your shareholdings.

Investor Centre Web Address - www.investorcentre.co.uk

Investor Centre Shareholder Helpline - +44 (0)370 873 5866

 

Share price information

BGEO shareholders can access both the latest and historical prices via our website, www.BGEO.com

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR SFUSMMFMSEEE