Lion Finance reports record preliminary profits

(Sharecast News) - Lion Finance Group reported record preliminary profits for 2025 on Wednesday, supported by double-digit loan growth in Georgia and Armenia, and announced further capital returns through dividends and an extended share buyback programme. The FTSE 250 group posted consolidated unaudited profit before one-off items of GEL 619.3m (£171.85m) for the fourth quarter of 2025, up 22.7% year on year, bringing full-year profit before one-offs to GEL 2,192.8m, a 20.9% increase.

Adjusted return on average equity was 30.1% in the fourth quarter and 28.4% for the year.

The loan book reached GEL 40,065.7m as at 31 December, up 19.7% year-on-year in constant currency.

Georgian Financial Services recorded 16.1% loan growth, while Armenian Financial Services, which includes Ameriabank, expanded 28%.

Customer deposits and notes rose 17.3% in constant currency to GEL 38,630.0m, with GFS deposits up 14.3% and AFS deposits up 21.9%.

Asset quality remained stable, with the cost of credit risk ratio falling to 0.3% in the fourth quarter from 0.5% a year earlier, and the non-performing loan ratio steady at 2.1%.

Operating income increased 16.4% year on year to GEL 1,201.3m in the fourth quarter, driven by net interest income and solid fee and commission generation.

Non-interest income rose 10.1% to GEL 405.4m, while operating expenses increased 14.0% to GEL 422.6m.

Archil Gachechiladze, chief executive, said 2025 was "a year of strong performance for the group, marked by robust growth in our core operations and notable momentum in Armenia driven by the continued enhancement of our retail banking capabilities."

"As a result, we delivered a record GEL 2.2bn in group net profit before one-offs - up 20.9% year-on-year - a return on average equity of 28.4%, and a 21.6% growth in our book value per share to GEL 197.85," he added.

In Georgian Financial Services, full-year profit before one-offs reached GEL 1.7bn, up almost 10%, with adjusted return on average equity of 32.0%.

Ameriabank, consolidated from April 2024, delivered GEL 452.4m in profit for the year and achieved a 22.6% return on average equity, with standalone profit up 23.6% on a comparable basis.

The group declared a quarterly dividend of GEL 2.75 per share, bringing the total dividend for 2025 to GEL 10.50 per share, up 16.7% year on year.

It said the fourth-quarter dividend would be paid in sterling on 14 April to shareholders on the register as at 27 March, with shares going ex-dividend on 26 March.

The lari-to-sterling exchange rate would be based on the National Bank of Georgia's average rate from 23 to 27 March.

In addition, the board approved a further GEL 53.5m extension to its share buyback and cancellation programme, bringing total buybacks for 2025 to GEL 203m.

Combined dividends and buybacks imply a 30% payout ratio for the year, in line with the group's policy to distribute 30-50% of annual profits.

The new buyback programme would run until no later than the 2026 annual general meeting and would be executed in the open market by Cavendish Capital Markets under pre-set parameters.

Up to 3,840,951 shares could be repurchased, with treasury shares cancelled monthly.

Looking ahead, management reiterated medium-term targets of around 15% annual loan book growth, return on average equity above 20%, and a payout ratio of 30-50%.

Gachechiladze said the group entered 2026 with priorities of "deepening customer relationships, driving digital innovation, and building on the record profit achieved in 2025," adding that Georgia and Armenia remained among the region's fastest-growing economies.

At 1009 GMT, shares in Lion Finance Group were up 7.66% at 11,100p.

Reporting by Josh White for Sharecast.com.