News Column

Bank Of Georgia Sets Out Plans For Divisional IPOs And Asset Sales

September 4, 2014

Samuel Agini

LONDON (Alliance News) - Bank of Georgia Holdings PLC Friday moved to update investors on its medium-term strategic goals, revealing that it will consider one-off special dividends in light of potential asset sales over the coming years, while it is also targeting initial public offerings for two of its business divisions.

In a statement, Bank of Georgia Holdings said it expects to continue to scale up in its insurance and healthcare business division by acquiring hospitals, while aiming to IPO it during 2015.

The company is also targeting an IPO of its affordable housing business - in which it is aiming for an internal rate of return of about 40% - as a fund in 2016/2017.

Adding to the planned wave of corporate activity is a target to divest JSC Bank of Georgia's non-core subsidiary in Belarus, BNB, within the next two years.

The restructuring plans came alongside plans for JSC Bank of Georgia to target a return on average equity of 20%; customer lending and deposit growth of 20% a year; and a tier 1 capital ratio of 20%, all in the medium term.

The bank expects to maintain positive operating leverage, while continuing to invest in business growth and managing the cost:income ratio at around 40% over the next two to three years.

The bank will also continue to aim to maintain a dividend payout ratio in the 25%-40% range, in addition to the plans to consider special dividends.

It also said it expects its net interest margin to be about 7.5% over the next two to three years. In its 2013 annual report the bank had outlined a 7.0% to 7.5% net interest margin target for the next two to three years. Its net interest margin was 7.8% in 2013.

Meanwhile, the company's investment management division is targeting USD2.0 billion of assets under management by the end of 2016.

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Source: Alliance News

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