Lion Finance Group PLC reported higher third-quarter profits on Thursday, and confirmed a fresh dividend and expanded share buyback as the financial services group continued to benefit from strong loan growth in Georgia and Armenia.
The FTSE 250 group posted a consolidated profit of GEL 547.2m (£155.29m) for the third quarter, an increase of 7.5% year-on-year and 6.6% quarter-on-quarter.
Profit for the first nine months before one-off items rose 20.3% to GEL 1.57bn.
Operating income before cost of risk grew 14.8% year-on-year to GEL 702.4m, while operating income rose 15.6% to GEL 1.08bn, driven by a 21.1% increase in net interest income.
The return on average equity stood at 27.8% for the quarter.
Chief executive Archil Gachechiladze said the group had "delivered another solid quarter, with strong balance sheet growth across our core markets and high profitability for the group," adding that "operating income before cost of risk rose 14.8% year-on-year and 6.3% quarter-on-quarter."
He said profit growth reflected "closer to more normalised levels of cost of risk in Georgia," and that book value per share had risen 22.6% year-on-year to GEL 184.46.
Customer activity continued to expand, with Bank of Georgia's retail digital monthly active users rising 14.7% year-on-year to over 1.7m and Ameriabank's digital users surging 62.7% to more than 305,000.
Loan growth remained strong across both operations, with the group's loan book up 21.7% in constant currency to GEL 37.9bn at 30 September.
Deposits increased 18% to GEL 37.7bn, while asset quality stayed stable with a cost of credit risk ratio of 0.5% and an NPL ratio of 2.1%.
Gachechiladze said the Georgian and Armenian economies were maintaining "strong momentum," supported by robust domestic demand and improved regional stability.
He reiterated full-year GDP growth forecasts of 7.5% for Georgia and 5% for Armenia, and noted that "the central banks of both countries have continued purchasing foreign currency, bringing international reserves to record highs."
The board declared an interim dividend of GEL 2.65 per share for the third quarter, payable on 9 January.
The dividend would be paid in sterling using the National Bank of Georgia's average lari-pound exchange rate over 15-19 December.
Lion Finance also announced a GEL 51.5m extension to its share buyback and cancellation programme, consistent with its 30% to 50% capital return target.
The programme would run until the company's 2026 annual general meeting, and would be managed by Cavendish Capital Markets.
It said the maximum number of shares that could be repurchased was 3,988,733, with purchases conducted in the open market.
Gachechiladze said the group was "well placed to continue delivering value for our shareholders in the quarters ahead," citing strong capital generation and a resilient operating model.
At 0908 GMT, shares in Lion Finance Group were up 1.55% at 7.885p.
Reporting by Josh White for Sharecast.com.