Bank of Georgia Group updates dividend and capital distribution policy

Bank of Georgia Group PLC (the “Group”) announces that its Board has updated its dividend and capital distribution policy. The Group’s previous dividend policy targeted a payout of 25-40% of profits on an annual basis. In the light of the evolving macroeconomic situation and expected levels of medium-term growth, the Board has formally reviewed the Group’s capital distribution policy and decided to increase the targeted payout ratio range to 30-50% of annual profits.

The Group’s updated dividend and capital distribution policy is as follows:

Dividend and capital distribution policy

Bank of Georgia Group PLC’s capital distribution policy incorporates a progressive ordinary cash dividend, supplemented by additional share repurchases as and when appropriate. It is the Board’s overall capital distribution policy to target a payout ratio in the range of 30-50% of annual profits. The Board expects to ensure healthy capital ratios, above minimum regulatory requirements, and take into consideration expected future capital requirements, including the full loading of Basel III requirements on our minimum capital ratios, ongoing regulatory capital developments and the growth opportunities available to Bank of Georgia.

Dividends will be paid on a semi-annual basis, with the interim dividend expected to be paid in cash and represent, under normal circumstances, around 40% of the total dividend for the year.

On 17th August 2021, the Group announced that the Board declared an interim dividend of GEL 1.48 per ordinary share in respect of the period ended 30 June 2021, payable to ordinary shareholders of Bank of Georgia Group PLC on 5 November 2021.

Archil Gachechiladze, the Group CEO commented: “Throughout the pandemic and despite significant volatility in economic activity, Bank of Georgia Group has delivered excellent operating performance, with good top-line growth, well-managed costs, and robust asset quality and risk management. This has led to consistently delivering strong profitability and high levels of internal capital generation, while maintaining capital adequacy ratios comfortably above our minimum regulatory requirements.

Our medium- to long-term customer lending growth guidance is c.10% per annum, and the updated dividend and capital distribution policy reflects these expectations. However, the strength of the Georgian macro-economic environment has been such that there has been a strong pick-up in demand within the consumer, micro and small and medium-sized enterprises sectors and we therefore expect higher levels of lending growth in the near term. As a result, the Board currently expects the payout ratio to be approximately 35-40% over the next two years.”