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(Sharecast News) - Shares in Lion Finance Group, formerly Bank of Georgia Group, surged on Wednesday after the lender reported a 21% jump in third-quarter profits and announced an increase in its dividend alongside a further share buyback.
The FTSE 250 company saw its shares rise around 6% to 12,830p by 0940 GMT after reporting third-quarter profits of GEL 661.9m, up from GEL 547.2m a year earlier, supported by strong lending growth across its Georgian and Armenian operations.
Lion Finance declared a third-quarter dividend of GEL 3.25 per share, up 22.6% year-on-year, alongside a further GEL 62m share buyback and cancellation programme.
Operating income before the cost of risk increased 25.4% to GEL 880.6m, while net operating income rose 19.6% to GEL 1.29bn. Return on average equity stood at 27.2%, with the same figure recorded for the first nine months of the year.
The group's loan book expanded 24.6% year-on-year in constant currency to GEL 46.5bn at the end of September, well ahead of its medium-term target of around 15% annual growth. Customer deposits and notes rose 21.1% to GEL 44.9bn.
Chief executive Archil Gachechiladze said: "Our third-quarter results reflect a business with real momentum across both franchises."
He added: "In Armenia, Ameriabank continues to grow well ahead of both the market and our own targets, with the loan book up 38.1% year-on-year in constant currency, and Retail Digital MAU growing 36.8% year-on-year, as we scale the franchise and gain market share in one of the region's most dynamic economies."
The group's net interest margin increased by 20 basis points year-on-year to 6.5%, although the improvement partly reflected a change in the treatment of mandatory reserves.
Meanwhile, the non-performing loan ratio improved to 2% from 2.1% a year earlier, despite the cost of credit risk increasing to 0.7% from 0.5%.
Lion Finance reiterated its medium-term targets of annual loan growth of around 15%, return on average equity above 20% and a shareholder payout ratio of 30% to 50% through dividends and buybacks.
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