Lion Finance Group PLC

Good afternoon, thank you for joining Lion Finance Group PLC's results call. Today we're presenting our results for the first quarter and the full year of 2025. My name is Ninia Arshakouni, I'm Head of IR and I'll be moderating today's call. I'm joined as always by the Group CEO, Archil Gaciciladze. We also have on the line, the CFO of Ameriabank, our banking subsidiary in Armenia, Holanest Oroyan, and our Group Economist, Akeli Kokeli. First, we'll start with the presentations, and in the second session of this call, you'll be able to ask your questions. And with that, I'll hand over to Archil first for opening remarks, and then we'll dive into our performance and the operating environment. Archil, you can go ahead.

Thank you, Nini. Hello, everyone. Thank you for joining the call. I will just have opening remarks followed by the macro review by Akonati. So, as you can see, we have delivered a record quarter and a record year, in fact, with our net income growing by 20.9%, just shy of 2.2 billion, delivering 28.4% return on equity. And in the quarter, that was just above 30% return on equity with 35.5%. cost income ratio and cost of risk, which is about half of what we usually expect through the cycle. So for the quarter, it was 0.3, but then for the full year, it was 0.4. Both of the strong franchises have delivered a very good increase in the quality of the franchise, which we measure by the satisfaction of the customers. as well as as well as the pickup of the of the monthly active users on the retail front and and also both of the franchises delivered above average or above expected or above guidance growth in our portfolio especially on the credit side but also on the on the deposit side so we are quite I'm quite happy with the results, and I would like to thank our Armenian and Georgian colleagues who have done a very good job in 2025. And as a kind reminder, Armenian bank full year In 2025 was the first year when Amelia Bank was for the full year part of the Lion Finance Group, hence the renaming, as you know. And as you can see, it has delivered substantial good growth, not only on the balance sheet side, but also on the retail coverage side. With this bright note, I would like Akaki to cover our macro. As you know, both of the countries have enjoyed a record-breaking macro performance over the last few years, which is continuing year by year. So, Akaki, would you tell us what to expect?

Thank you, Archie. Hello, everyone. I will be presenting the macroeconomic update for our core markets, Georgia and Armenia. Starting with growth performance, 2025 was another strong year for both countries. The Georgian economy expanded by 7.5%, fully in line with our expectations and supported by strong consumption spending and resilient external inflows. Meanwhile, Armenia surprised on the upside, delivering 7.2% real GDP growth. For 2026, we expect the strong growth momentum to persist, supported by ongoing strength of services and public capital expenditure. Real GDP growth in Georgia is expected at 6% and within the range of 5.5% to 6% in Armenia. Due to this strong growth in recent years, as you can see on the right-hand side, per capita income levels in both economies have been steadily growing and converging towards central and eastern European peers. While the baseline outlook remains positive, uncertainty is still elevated. Geopolitical tensions in the region create downside risks. However, both economies are well positioned to withstand potential shocks supported by solid macroeconomic buffers and prudent policy frameworks. Upside opportunities could also emerge, especially from the ongoing implementation of the historic peace agreement between Armenia and Azerbaijan. Solid external inflows have also supported local currency strength. Georgian Lari and Armenian DRAM have been relatively stable in recent years, recording modest but consistent gains against the US dollar. Notably, real effective exchange rates for both currencies have stabilized, reinforcing our assessment that currency valuations are broadly in line with fundamentals and supporting stable medium-term outlook. Currency strength is also important for low and stable inflation, which the two countries have enjoyed in recent years. The recent headline inflation uptick in Georgia is mostly related to food price pressures and core inflation remains low, reflecting well-anchored inflation expectations. Over 2026, we expect inflation to stay close to the central bank's 3% targets in both countries, underpinned by prudent monetary policies. In the second half of this year, we see room for around 50 basis points cuts by National Bank of Georgia, while the policy rate of the central bank of Armenia is expected to remain unchanged, as the current policy stance is assessed as broadly neutral. Both central banks have been very active in accumulating foreign currency reserves. due to strong foreign currency inflows and stable exchange rates. By the end of 2025, current exchange foreign currency reserves reached record high levels of US$6.2 billion in Georgia and US$5.1 billion in Armenia. Importantly, the current reserve levels are above the minimum deposit thresholds and they continue to increase. Another key pillar for macroeconomic stability is prudent management of public finances. Georgia and Armenia demonstrates fiscal discipline, have demonstrated fiscal discipline over the years. The Georgian government remains on a consolidation path with tight management of fiscal deficits at 2.5% of GDP and declining debt-to-GDP ratio. Meanwhile, the Armenian authorities have been successful in balancing ongoing spending needs with fiscal sustainability objectives. Despite elevated fiscal deficits in recent years, they managed to keep debt-to-GDP ratio broadly unchanged. This year, we expect fiscal policies in both countries to remain sound and supportive to growth, particularly through sustained public capital expenditure. And lastly, financial sectors in both countries have benefited from favorable macroeconomic environments and continue to support growth. We observe solid and strong expansion of lending, lower levels of loan dollarization and solid capital buffers. So this concludes my part. Back to you, Nini.