Lion Finance Group (LON:BGEO) used its full-year 2025 earnings call to highlight what management described as a “record quarter and a record year,” driven by strong profitability in both its Georgian and Armenian franchises and a supportive macroeconomic backdrop in its core markets.
Group CEO Archil Gachechiladze said net income rose 20.9% to “just shy of $2.2 billion,” producing a 28.4% return on equity for the year and “just above 30%” ROE in the fourth quarter. He also pointed to a 35.5% cost-income ratio and a cost of risk that was “about half of what we usually expect through the cycle,” with 0.3% in the quarter and 0.4% for the full year.
Macroeconomic backdrop: strong growth, stable currencies, reserve accumulation
While noting elevated uncertainty from regional geopolitical tensions, Liqokeli said both economies were “well positioned to withstand potential shocks” given macroeconomic buffers and policy frameworks. He also cited upside potential tied to progress around a peace agreement between Armenia and Azerbaijan.
On monetary and external conditions, Liqokeli said both currencies have been relatively stable with modest gains versus the U.S. dollar and that inflation is expected to remain near both central banks’ 3% targets. He added that the National Bank of Georgia may have room for around 50 basis points of rate cuts in the second half of 2026, while Armenia’s policy rate is expected to remain unchanged.
Both central banks have been accumulating reserves, with Georgia’s foreign currency reserves reaching $6.2 billion and Armenia’s $5.1 billion by the end of 2025. He also said fiscal policy remains prudent, with Georgia managing a 2.5% fiscal deficit (as cited on the call) and a declining debt-to-GDP ratio, while Armenia has kept debt-to-GDP broadly stable despite elevated deficits in recent years.
Georgia: loan growth beat guidance as digital engagement climbed
Gachechiladze said the Georgian operation delivered results ahead of expectations, with quarterly net profit “just shy of GEL 460 million,” up 17% year-over-year, and a 32.7% quarterly ROE. Loan book growth reached 16.1% versus a “10+%” guidance level.
Management emphasized ongoing digital gains, including 15% year-over-year growth in retail digital monthly active users to 1.8 million and 24% growth in daily active users to “just shy of 1 million.” The company also said it won Global Finance’s “world’s best digital bank” award for the second year in a row.
Other Georgia highlights included:
- Digital sales: 71% of all products sold digitally in the fourth quarter.
- Customer satisfaction: Net Promoter Score reached a new high of 76 as of end-December.
- Payments acquiring: Volumes up 22.6%, with a 55.8% market share (down 0.1% year-over-year).
- Card usage: Monthly active card users rose 13% to 1.64 million.
- Deposits: Deposit growth of 13.6%, alongside commentary that high liquidity is weighing on net interest margin.
Gachechiladze also noted that the group would like to bring deposit market share in Georgia below 40% (from around 41%) in a way that does not undermine the franchise’s “top choice” positioning for deposits.
Armenia: strong profit growth, rapid lending expansion, and capital actions
Ameriabank CFO Hovhannes Toroyan described another “record” quarter in Armenia. He said quarterly net profit rose 38%, while annualized stand-alone net profit grew 24%. Return on equity was 26.8% and loan portfolio growth reached 28% in constant currency terms, which he said was diversified between retail and corporate segments.
Toroyan said time deposits grew 33% year-over-year and total customer “attractions” grew 22% in constant currency, which he characterized as evidence of customer trust. He also highlighted digital engagement, saying monthly active and daily active user metrics were growing “over 25% per annum,” with more than 45% growth in MALs and DALs cited elsewhere in his remarks. Toroyan said the bank is currently serving about one-third of Armenia’s adult population.
Digital and product developments in Armenia included beyond-banking features in the mobile app, enhanced digital payments, and the launch of a loyalty program in the fourth quarter of 2025. Toroyan said online banking transaction counts “more than doubled within 1 year.” He also said 96% of retail loans disbursed in the fourth quarter were underwritten through online channels using AI and machine-learning-based underwriting.
On funding mix, Toroyan said 60% of deposits are already denominated in AMD, attributing this to rapid customer growth (he said the number of customers increased 33% over the last year), a stable macro backdrop, and a stable Armenian dram.
Ameriabank’s market share improved to 21.7% for loans and 19.5% for deposits, according to Toroyan.
He also discussed capital measures. While capital was “tight” at year-end, Toroyan said the bank strengthened capital in December via a EUR 30 million increase that took effect in January following central bank approval, bringing capital to 17.5% by the end of January. In early February, the bank issued inaugural $50 million AT1 notes, which Toroyan said would increase capital by another 86 basis points.
Group trends: NII strength, fee timing benefit, and NIM focus
At the group level, management said operating income rose 16.4% in the quarter and 20.8% for the year. Net interest income increased 19.9% in the quarter and 25.9% for the year, while net non-interest income was up 10% in the quarter and 10.8% for the year.
Gachechiladze flagged a timing item in fees: net fee and commission income grew 33.8% in the fourth quarter, partly because improved commercial terms with card payment system providers—effective from April—were booked in the fourth quarter. He said that, looking forward, fee and commission income growth should be expected in the “15%–20%” range, reflecting ongoing benefits from the improved terms over the next five years.
Foreign exchange income fell in both markets due to low currency volatility and increased competition, particularly in Georgia. Gachechiladze said the bank earns more when volatility is higher and suggested FX income could be “flattish to slightly increasing” if volatility remains subdued.
Management also pointed to elevated liquidity in both franchises as both a sign of strength and a pressure on net interest margin. In Q&A, Gachechiladze said that despite funding pressure and expected rate changes, the group expects net interest margin to be “flat to slightly positive” in both markets, helped by deploying or reducing excess liquidity.
On asset quality, the group’s NPL ratio was cited at 2.1%, and management reiterated through-the-cycle cost-of-risk guidance of 80–100 basis points, while noting recent outcomes have been below that level amid strong macro performance.
The group also declared a dividend that management said represented a 16.7% increase for the full year, while emphasizing that capital buffers are being maintained to support growth and potential M&A opportunities. In Q&A, Gachechiladze reiterated the group’s distribution guidance of 30%–50%, but said payout would likely remain toward the lower end while growth remains elevated and as the company retains flexibility for organic and inorganic opportunities.
About Lion Finance Group (LON:BGEO)
Lion Finance Group PLC (formerly Bank of Georgia Group PLC) is a FTSE 250 holding company whose main subsidiaries provide banking and financial services in the high-growth Georgian and Armenian markets through leading, customer-centric, universal banks – Bank of Georgia in Georgia and Ameriabank in Armenia. By building on our competitive strengths, we are committed to driving business growth, sustaining high profitability, and generating strong returns, while creating opportunities for our stakeholders and making a positive contribution in the communities where we operate.
