Lion Finance Group (LON:BGEO) reported strong third-quarter growth across its Georgian and Armenian banking operations, with management citing loan expansion, improved digital engagement, operating leverage and continued profitability.
During the earnings call, management said group loan growth reached nearly 25% year over year in constant currency, while deposits increased 21%. Revenue rose 19.6%, compared with a 9% increase in costs, contributing to 25% pre-provision profit growth.
Chief executive Archil Gachechiladze said the group’s cost-to-income ratio reached a record low of 32.1% in the quarter. He said the company expects neutral to positive operating leverage over time, although it did not provide a formal cost-income target. Management said investments in automation and artificial intelligence across transaction processing, anti-money-laundering operations and customer service could support further efficiency gains.
Digital customer activity expands
Management highlighted continued adoption of the group’s digital platforms. In Georgia, monthly active users of its retail application rose nearly 14%, surpassing 2 million in a country with a population of about 3.9 million. More than 1 million users open the app daily, according to the company.
In Armenia, monthly active users increased almost 37% to 417,000, while Ameriabank’s total monthly active customer base reached about 600,000, up 25% from a year earlier.
Giorgi Shagidze, CFO of Lion Finance Group, said the Georgian retail app had customer satisfaction of about 92%, 2 million monthly active users and 1.08 million daily active users. He said 87% of loans were granted through digital channels. The business app had customer satisfaction of 93% and 117,000 monthly active users.
The company said Global Finance named it the world’s best AI bank and the world’s best consumer digital bank, following two consecutive years in which it was named the world’s best digital bank.
Georgia reports profit growth and strong capital buffers
Georgia’s financial-services operation reported quarterly profit of GEL 494 million, up 13.9% year over year. Nine-month profit rose 13.7% to GEL 1.4 billion, Shagidze said.
The Georgian loan book increased 18.6% year over year in constant currency, led by retail mortgages and consumer lending. Deposit growth was reported at 12.3%, as the bank deliberately reduced certain higher-cost corporate deposits amid strong liquidity.
Payment acquiring volume and transactions increased 23.1% year over year, while the bank’s acquiring market share was 56.8%. Active merchants increased 15.9%, with the network reaching 30,000 point-of-sale terminals. Payment monthly active users rose 12.5% to 1.7 million as of September.
Shagidze said the Georgian operation maintained capital buffers of 2.6 percentage points above its CET1 requirement, 3.1 percentage points above its Tier 1 requirement and 2 percentage points above its total capital requirement. Its liquidity coverage ratio was about 150%, against a 100% regulatory minimum.
Ameriabank growth outpaces market
Hovhannes Toroyan, CFO of Ameriabank, said the Armenian business delivered profit growth of almost 45% year over year. Excluding one-off items recorded in the prior quarter, he said profit growth would have exceeded 30%, with return on equity reaching 24.4%.
Ameriabank’s loan book grew more than 38% year over year in constant currency, while deposits rose nearly 40%. The bank increased its share of the loan market to 23%, according to Toroyan, and became the market leader in retail term deposits after gaining 0.9 percentage points of market share.
The Armenian business recorded more than 22% growth in acquiring volumes and nearly 50% growth in issuing volumes. Toroyan said Ameriabank is now the country’s market leader by issuing-business volume.
Ameriabank’s liquidity coverage ratio exceeded 200%, while its net stable funding ratio was 125%. Toroyan said the bank had excess local-currency liquidity and intended to deploy it to support lending, particularly in retail. He also said average local-currency deposit rates had fallen by about 150 basis points and that the benefit from repricing deposits should unfold over the next nine to 12 months.
Macro outlook and credit quality
Akaki Liqokeli, economist at Lion Finance Group, maintained the company’s 2026 real GDP growth forecasts of 7.5% for Georgia and 5.5% for Armenia. He said both economies continued to benefit from diversified external inflows, while the Georgian lari and Armenian dram had appreciated against the U.S. dollar during the year.
Management said cost of risk was 68 basis points in the quarter and nonperforming loans remained at one of their lowest historical levels. Gachechiladze said the increase in Georgia’s cost of risk reflected normalization in expected-credit-loss adjustments rather than a deterioration in asset quality.
On Armenia’s real estate market, Toroyan said Ameriabank was closely monitoring conditions following central-bank concerns about possible overheating. He said the bank viewed risks as moderate because of current loan-to-value levels, the predominance of primary-market mortgages and the role of a tax-rebate program for eligible borrowers.
The group said its nine-month capital distribution increased 17.6%, while its third-quarter dividend increased 23.6% year over year. Gachechiladze said the company remained committed to capital distributions, with approximately 20% of earnings currently distributed as dividends and about 10% used for share buybacks. He added that potential acquisitions remain under review, but the group would pursue only opportunities it considers value-accretive.
About Lion Finance Group (LON:BGEO)
Lion Finance Group PLC (formerly Bank of Georgia Group PLC) is a FTSE 100 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.
