Bank of Georgia hails record profits

Bank of Georgia Holdings, the holding company of Bank of Georgia which was listed in London earlier this year, said that an improvement in its net interest margin in its first half has led to record profits.

"I am delighted to report strong Q2 2012 and 1H 2012 results reflecting broad-based performance improvements in each of our businesses, benefiting from the strengthening economic environment in Georgia," said Chief Executive Officer Irakli Gilauri.

Net interest margin increased from 7.9% last year to 8.2% in the six months to June 30th, while revenue jumped 12% year-on-year from 213.4m Georgian lari (GEL) to GEL239.0m (around £92.9m); excluding the benefit of last year's one-off currency hedge gains, revenue increased by 23.6%.

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Profit from continuing operation rose 13.2% from GEL76.0m to GEL86.0m. The group said that the main drivers of the record performance were "strong business growth across the board, the reduction in deposit costs in Q2 2012, improved efficiency and the continued improvement in credit trends".

The firm reported a return on equity of 19.6%, which was helped by "double digit revenue growth, positive operating leverage and prudent risk management." The Tier I capital ratio was 21.9%, which the firm boosted was "substantially" above regulatory requirements.

Bank of Georgia Holdings became a FTSE All-Shares and FTSE 250 index constituent in June: "Our inclusion in these indices is expected to further improve our stock liquidity and support our ongoing efforts to broaden our investor base," Gilauri said.

BC