Bank of Georgia Group PLC (LON:BGEO) shares were knocked in late-morning trading Tuesday after a strong set of full-year results were overshadowed by an uncertain outlook for the global economy.
The FTSE 250 firm, one of the two main lenders in the former Soviet Republic, reported pre-tax profits in the year of 437.5mln Georgian Lari (GEL), around £128.5mln, up 12% year-on-year while revenue rose 13% to GEL1.03bn (£302.5mln).
Earnings were lifted by strong growth in the Georgian economy, which reported gross domestic products (GDP) growth of 4.8% in the fourth quarter of the year while inflation had remained below the National Bank of Georgia’s 3% target at 1.5%.
This, in turn, had fuelled an increase in customer loans from the group, which were up 22% in the year to GEL9.4bn (£2.8bn) while customer deposits had increased by 21% to GEL8.1bn (£2.4bn).
As a result of the uptick, the firm said it would pay an annual dividend of GEL2.55 (£0.75) per share, 4.5% higher than last year’s dividend.
However, despite the strong figures shares dropped 3.9% to 1,657p as analysts worried about the firm’s prospects amid a global economy marred by trade tensions and Brexit.
In a note to clients, analysts at Peel Hunt downgraded BGEO to ‘Add’ from ‘Buy’ and cut their target to 1,900p from 2,250p citing a moderation of their longer-term growth forecasts, however, they remained bullish on the Georgian banking sector.