hop1, In Q4 profits generated within bank georgia jsc accounted for about 97% of total group figures. |
Spoke too soon! |
The National Bank of Georgia released results for commercial banks in Georgia to 31 March earlier today. As I understand this data, it accounts for approximately 90% of BOG group profit. For Q1, net profit was GEL355.09m, implying that total group net profit for Q1 was around GEL395m. The annualised RoE for Q1 was 32.37%. This looks to be a long way ahead (perhaps 20%-25%) of analyst's expectations as far as I can see. And worth remembering that this is all before Ameriabank which completed around 1 April and so will only start to be seen in the numbers from Q2 onwards. So notwithstanding share price strength recently and over the last two years, the shares have not re-rated at all and are still on c4x 2024 EPS, yielding c6% and trading just above book. Still plenty of upside therefore... |
Consensus broker forecasts for 2024 have jumped by 70p to 1079p eps, which is likely to be due to a broker upgrading coverage to include the recent acquisition.
I guess that has caused the recent strength. |
Bank of Georgia Group plc posted impressive FY23 prelims this morning continuing the bank’s trajectory of robust and very profitable growth. BGEO had 1.8 million monthly active retail clients as of 31 December 2023 up 10.8% y-o-y, operating income was GEL 657.2m in 4Q23 up 12.4% y-o-y, while in FY23 as a whole, operating income was up 26.4% yoy to GEL 2,530.4m. For FY23, profit was GEL 1,374.7m, up 21.4% y-o-y, while the Bank's Basel III CET1, Tier1, and Total capital ratios stood at 18.2%, 20.0%, and 22.1%, respectively, all comfortably above the minimum requirements of 14.5%, 16.7%, 19.6%, respectively. So more robust top and bottom line growth with a very solid balance sheet in tow. Valuation also remains reasonably attractive for the sector with forward PE ratio at 5.1x top quartile for the Banking Services sector. The share price also has strong positive momentum. BUY...
...from WealthOracle |
Analyst presentation yesterday I think |
Any ideas on today's rise? |
This was my take from the recent broker note. I hadn't looked that far ahead.
''With European Banks forecast to show almost no revenue growth 2023-25E, in a falling rate environment, we believe the market will place a premium on scarce growth, with BOGG expected to deliver pro-forma EPS growth of 36% 2023-25E.'' |
Halyk Bank has not been bought
It was only a sale of their subsidiary in Kyrgyzstan |
That net income figure is high given that the tax rate was increasing on jan 1st. |
Results to be published shortly after General Meeting of Shareholders to be held on 14 March.
In the meantime, worth noting that the National Bank of Georgia today published results for Georgian commercial banks for January. This statutory reporting accounts for c90% of BOG's profit and shows net income of GEL121.4m for Jan. This equates to an annualised ROE of 33%! Obviously one should be wary of reading too much into one month's data point but it does suggest that there is still a lot of momentum in the business. If Feb and March are similar, then most analysts estimates for Q1 are 20%-25% too low. And that's before upgrades that will need to be put through once Ameriabank completes.
So the thesis remains the same as it has done for the last two or three years: very cheap stock, high profitability, returning lots of capital to shareholders via divi and buyback and growing fast. |
Should have been last week, but i guess the acquisition has delayed the process slightly, so results imminent.
Q4 was already flagged a few weeks ago in an rns. |
Anyone know when the Q4 results are coming out? |
Looks like it has been bought.
"Press Release
on Reaching an Agreement on Sale of 100% Shares
of Halyk Bank Kyrgyzstan OJSC
10 November 2023
Halyk Bank of Kazakhstan Joint Stock Company (LSE: HSBK; KASE: HSBK, HSBKd; AIX: HSBK, HSBK.Y) announces that it has reached an agreement with a consortium of buyers, which are the part of Visor International DMCC investment group ("Visor") to sell 100% shares of Halyk Bank Kyrgyzstan OJSC (the "Bank").
The transaction is expected to be completed after obtaining the consent from the National Bank of the Kyrgyz Republic.
Halyk Bank Kyrgyzstan OJSC provides services to current and potential customers in a normal course of business, ensuring safety of customers' funds and fulfillment of its obligations.
Visor Group intends to retain the Bank as a separate legal entity, and to continue its development in Kyrgyzstan." |
Halyk listing in uk appears to be $ based and are unavailable to trade in either of my accounts.
Fitch view on the BGEO credit rating post acquisition. |
Halyk Bank is listed on the LSE
Forecast PE is less than 3
Dividend yield is about 15%
Price to Book is about 0.8
Secure Trust Bank
Forecast PE is less than 3
Dividend yield is about 7%
Price to Book is about 0.4 |
Where is halyk listed? |
Wouldn't say overly expensive but RSI is in over bought territory. |
This is starting to look quite expensive now when compared to other value banks such as STB and Halyk which are both on a forecast PE of less than 3 |
I always liked Lord Lee's asertion that "you can;t go far wrong with 7,7 stocks".
(That's a paraphrase / mis-quote I am sure).
But the gist is that if the divi is > 7% and the PER is< 7 you will do OK in the mid-term.
Here of course we beat both those metrics. |
Even after the strong share price rise that would still only put it on a forward P/E of 4! |
Marketscreener broker forecasts have been upgraded to 1133p eps for 2024.
Seems a bit optimistic to me. |
thanks for the heads up.
I think the deal adds compelling additional value (as if it weren't obviously there already).
I think this one paragraph form Cavendish sums it uo best:
"We would again stress here that the value in Bank of Georgia’s proposed acquisition of Ameriabank is not based on the requirement for cost or revenue synergies – we believe that this will come in time, but on Day 1 earnings accretion comes simply from investing excess capital, in what is a compelling strategic deal." |
A new analyst price forecast is in the analyst coverage section on the bgeo website.
It is from Cavendish, who assisted with the acquisition. The full broker note is available on research tree and is worth a read. |
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