Bank Of Ga Group Plc Ord

Hello, everyone, and welcome to Bank of Georgia Group PLC's results call. My name is Nina Arshaklounia. I'm head of investor relations, and I'll moderate this call. Today, we'll be presenting the group's preliminary financial results for the fourth quarter and the full year of 2022. And we'll start, as usual, with an overview of the performance, which will be presented by the CEO, Archil Gaciciladze. And afterwards, we'll take your questions. And now we'll be handing over to Archil.

Let me jump to the presentation, share the presentation, go through it, and then we'll go to a Q&A session, which is usually probably the most interesting part of the presentation. So we had finished the year with very strong results. You may have already seen it. Our profit for the quarter was 326 million Lari, which was up 62.4%. year on year, with return on equity of 33.7% and cost income of 31%. This is third quarter in a row that we've delivered return on equity higher than cost income, which is just a fun fact. On an annual basis, the net profit was up by 55.7%, 1,132,000,000, overall return on equity of 32.4%. and cost income of 32%. So for the full year also, we had higher return on equity than cost income. Also very important is that our net promoter score is high at 58%, slightly down from the peak of 60%. But overall, I think it's keeping the trend of increasing that and the focus of customer satisfaction and monthly active users of our digital application is up by 31.5% year on year, which really is where all of these numbers are coming from. Not only this one, but it's one of the metrics that will drive the success of our franchise. So with that, let me summarize a few things about the macro economy. Then I'll talk on the update of strategy, like we do usually on the quarterly calls. And then after that, I'll share the results and field numbers from the results, financial results. The year continued with very strong performance. We had enjoyed double-digit growth in 2021 at 10.5%, and 2022 ended with a 10.1% estimate. At this point, the fourth quarter was 9.5% real growth. So all in all, I think Georgia delivered very strong growth. That was underpinned by strong growth in exports, which in December, in fact, was up 32%, which was strong, but previous months were also not bad. Remittances were strong in December. We ended it with 133% up. Imports also increased in the fourth quarter. It was about 30%. And the tourist inflows, which includes the migrants as well, we are comparing it to the peak 2019 revenue. And we ended it, we surpassed it. And the last quarter was well above the 100%, which was 2019 peak in dollar terms. And the December ended with 167%. All in all, it was up roughly about 45% for the full year versus 2019 again. That was the peak year. So as I mentioned, two years in a row of real growth, of double-digit real growth. And 2023, we are expecting 4.8%. And the year after, 5%. This obviously has some risks, but also has some upsides. And in the upside scenario, we're looking at about 7% real economic growth. Now, in terms of inflation, inflation and the refinancing rates remain still at a high level. We ended the year with headline CPI of 9.8% and core CPI 6.9. Inflation continued to decelerate after that, and January ended with 9.4%, so it's headed in the right direction, and it peaked close to 14%, as you can see on the chart, and we are seeing that that should continue reduction. PPI, in fact, if I remember right, in January was around zero, so there's no No pressure from the wholesale prices on this retail prices, so it should continue to decelerate. But we do expect the refinancing rate to remain at elevated levels throughout most of 2023. In the second half of the year, we may see some reduction, although the National Bank says that they expect to keep those rates until the end of the year at this point. Georgian lottery has done very well over the last year, over the 2022. It has strengthened versus U.S. dollar by 12.5% and has strengthened by versus other trading partners as well. And the performance was very good. And as you can appreciate, the nominal growth in 2022 because of high Real growth and high inflation was close to 19%. And with Lottie getting stronger, it was very good for our investors who are counting their money in U.S. dollars. So it's a very good year in that terms for investors as well. So in terms of LARA getting stronger, we also see that National Bank is increasing the reserves, and reserves went up by almost a billion this year. And so it reached $4.9 billion at the end of the year. And as you can see, the net purchases were around $100 million per month over the last five, six months, as you can see. So it's very strong purchases every month. And nevertheless, I think Lari has remained very strong overall and strengthened another 1.9% in January, in fact. The growth in the banking sector slightly decelerated to 12.1% at the end of the year. And that is on a constant currency basis. If you look at nominal growth because of some of the debt is in dollars, And in lottery terms, it's less. The overall growth came to 4.0%. But I think constant currency growth is really what shows the economic activity. So it was 12.1%, well below the nominal growth of the economy. And as you can see, the bank de-dollarization of the banking balance sheets is growing very well, especially due to the incentives, capital incentives, in fact, introduced by the National Bank one and a half years ago. So you can see that it is just below 45% on the asset side and the trend is very strong. So I think that risk has all gone from the banking sector. The deposit dollarization is also dropping and it's at 56% at this point. But the loan dollarization where the risks lie mainly is below 45%. NPL has remained at... It's a very low level, under 2% in the sector. So all we know, because the nominal growth was so strong and the growth in banking sector, because of higher interest rates were high, the growth was not very strong. So denominator increased substantially and the growth was not as substantial. So we have seen over the last two years that the overall leverage in the sector in the country of banking assets to banking loans to GDP has dropped to 63%, which basically means that it creates potential for us to grow in the outer years as the rates come down over time. We have also seen the national debt to GDP, which peaked at 60% in 2020, come down below 40% in 2022. And that was also one of the risks that we were looking at over the last couple of years. And that risk has been reduced substantially. Also, I should also mention one other thing, which is two other things, in fact. One is that the budget deficit is estimated right now, but it should be within 0.1% correction. It should be at 3.1% for 2022, which is already pretty decent given the large deficit that Georgia was running in 2020 and then reducing it in 21. it was well ahead of, or at least it was much narrower than the original budget. So the tax revenues increased by almost 29.8, if I remember right, so almost 30%. And that allowed the government to decrease the budget deficit. And I have to underline the fact that although the government capital expenditure spending grew by 27%. The operating expenses only grew by 8%. So the fiscal discipline that Georgia has had for many, many years now is maintaining very well. So that is very good. The current account deficit also narrowed to about 3%, 3.1% estimate. for 2022, which is also a very large reduction. So I think macroeconomically, not only was it a very strong year in terms of growth, but it was growth that was not financed by credit, and in fact, vice versa. So it was a major deleveraging that has happened throughout, as well as the deficit narrowed, the national debt is less, the reserves are at the record level. and a lot of strength in. So it was a very good year economically speaking, for sure. So now a few things that I would like to update you on. This is our strategic priorities that we set out in mobile app payments and loyalty and how to do it. It was focusing on customer satisfaction, employee empowerment, strength of our franchise in terms of the brand, and to do a lot in terms of data decision-making by data. and all of this doing it very well and profitably. Now, this was the focus that we announced in 2019, in fact, so about three and a half years ago. And we have been delivering on each and every one of those. We, as you all know, that we are a food security company, a leader in digital banking in the country. We are top of mind bank and most trusted bank in Georgia by a third party. marketing agencies, so according to third-party marketing agency research, delivering food productivity about 100% and highest standards of commonness and overall ESG. So, talking of our retail banking application, the monthly active users went up by 31.5%. And I am very happy about this result. 31% was a very ambitious target that we had was 1 million, in fact, for the management. And we surpassed it comfortably by 120,000. What makes me very happy also is that our monthly active clients, overall our clients, grew by 17%. And given our high, overall high usage of Bank of Georgia products, we thought that that kind of growth was not possible. But I think because of our focus on customer satisfaction and the quality of our products, more and more people are using Bank of Georgia products. There are a lot of double users as well. So basically people that use Bank of Georgia that used to be using other banks or are still using other banks, but that it's still a very, very good good number to have 17% growth overall of clients and in terms of monthly active users, 31% up. Now, as you can see, year on year, our monthly active users to the total, our total monthly active customers has gone from 61% to 68.7. So more and more people that are our customers are using our our mobile application, which is of very decent quality and we are listening to our customers to what they want and what they need to see in our application and continuously improving it. Dow tomorrow also increased, so daily interaction from 44% to 47.6%. And today, more than half a million people on a daily basis, on a daily basis, use our application. For a small country, it's a very big number. We, in the fourth quarter, in October, in fact, we launched... So application for school kids, banking application, because they also need financial services, which has money requests that they can request the money from their parents. It has a piggyback. It has all kinds of discounts that kids enjoy, skins for interaction, et cetera. So we think that this is a very important product for starting the relationship at early age and financial support. discipline and education is very important. So increasingly, we will be introducing financial education, gamified financial education for kids. And we believe it's very important from the EHG point of view to introduce that at the teenage years for kids. And we believe that it will be a big impact overall for the country longer term. But still, it's an important thing for us. In terms of the overall number of transactions, it went up to 90 million from about 70 one year ago, quarterly number of transactions, and notably mobile bank transactions represent now 58%. So that's the part that is growing the most, and nothing is surprising there. And we see that number probably grow further. Yeah. What's interesting is that our offloading of our sales, so selling our products on a transactional basis, more than 96% is out of the branch. But in terms of selling products, being it loans, deposits, cards, or different types of products, it's only 40%. And 40% was a big increase in the fourth quarter because we digitalized a number of different products and implemented some... some other things that we were focused on. So it went up pretty well in the fourth quarter, as you can see here. And in December, it was 44%. So it was a strong growth. Nevertheless, we believe that there's more growth still we had there. And we would like to see this number increase towards 60, 70% in the next couple of years. In terms of our applications, the internet bank and mobile bank for our businesses, business customers. The monthly active digital users went up by 39% on an annual basis to 58,000 customers and number of transactions was up by 32% as well. The quality of our service, which we measure, it's an internal measure, so we can only compare it to ourselves. One year ago, the CSAT was up by 5% and 6%. We would like usually to see that more than 80%. And a few years ago, it was not. And we'd like to see that move forward, the quality of our services. As you can appreciate, the The number of products and the sophistication of services for the legal entities is much higher than for individuals because they use more products. Another line, which is payments, which is also our strategic direction, has had a phenomenal growth. Year on year, our volume of acquiring business went up by 52.8%. That's for the quarter, the last quarter. And the market share of acquiring reached more than 50%, 50.3%. And that's up by 7.3% on a year-on-year basis. The market has grown by about 30%, and our business has grown by 52.8%. Moreover, something that we've been watching closely is the number of people using Bank of Georgia card, at least on a monthly basis. So the payment model, so-called, which went up by 33% and surpassed 1 million people. So more than 1 million people in Georgia use Bank of Georgia card on a regular basis, at least monthly, but most on a regular basis. So how do we do it is by focusing on customer satisfaction, which you can see the trend over the last five years. It's upwards and we will continue focusing on customer satisfaction, which has become a new religion at Bank of Georgia. Now, few words about the numbers, the numbers that are result of some of the strategic initiatives that I've talked about. As we mentioned, the return on equity is 33.7% for the full year, 32.4%. Cost of risk for the quarter is 0.9% and for the year 0.8%, close already to our long-term range that we expect between 1% and 1.2%. Cost to income ratio at 31% for the quarter, 32% for the year. And most importantly, I would say is that all of this has been achieved at a very, very strong capital ratios, 40 and one ratio of 14.7%. Again, this is by the national standards and you'll see the IFRS numbers very soon, more than 3% above the minimum requirements. We had a loan growth for the year at 12.9% in constant currency. and deposits of 43.2%, very strong growth. And this year, for the last two quarters already, our net loss to deposit ratio is well below 100%, first time in the history of Central Georgia that I remember. So in terms of the income statement, a few numbers that I would like to highlight. Net non-interest income of the last quarter was up by 129%. We can only continue this for next 20 years. It would be nice. And for the full year, it's up by 99%. So obviously, we have benefited, as you can see, for three quarters in a row. We've benefited from high FX. It has started to come down slightly. And we will probably see about a third of this number go away. At least that's our expectation. But for the last three quarters, we have still enjoyed this slightly longer than we expected. But we don't mind quite from here. as you can expect. So also the operating income overall is up by 54.2%, and for the full year is up by 46.6%, surpassing 2 billion Lari mark, which was also nice. Our operating expenses in the last quarter grew by 20%, which is not low, obviously, but in this high inflationary environment and in a spending business, we thought it was not bad, especially when you look at last three quarters. First quarter was up by 29%, second 32%, third quarter up by 26%, and fourth quarter up by 20%. So the trend was... was nice and that was good. So that has been reflected in the cost income ratio where we achieved 31%. One year ago, as you can see in the fourth quarter of 2021, it was 39.8%. For the full year, it means cost income ratio of 32%. And I'd like to remind you that the mid-term guidance that we had was around 35%. So we are ahead of that guidance, well ahead of that guidance. Loan portfolio and deposit portfolio we discussed. In nominal terms, it was less, so 4.3% only. While in constant currency, it was 12.9. Fourth quarter was not bad. In fact, it was pretty good for us, but overall banking sector, I think, decelerated nevertheless. Deposit portfolio grew by 43.2%. In nominal terms, that was 30%. So it was a very strong growth, including in the fourth quarter. Net interest margin, we saw a nice improvement in the fourth quarter by 40 basis points, as you can see. And for the full year, that meant an improvement of 50 basis points. So that was a good one. Something that helped us on the cost of funding here was the fact that we did the buyout in the third quarter of part of our euro bond, and there was a high interest rate there. So it's only 82 million outstanding now out of 350 million, which matures in May this year, as well as had enjoyed an increase of yields there a little bit as well. So I think the combination was overall good and it's good to have larger margins. Cost of risk we had at normal levels at 0.9%. So for the full year, 0.8. And we had a slight decrease of coverage. That was because we increased the NPL ratios to 2.7%. That was partly due to the reclassification of some of the loans. It was getting a stage three loan. It was including stage three, but it was not included in NPLs. And we decided that it was the right thing to align those closer to stage three numbers. And that's what caused a slight increase. On a constant basis, it was down to 2.2%. and we feel it's a good coverage. On a profit, as we mentioned, this is up by 62.4%, and on a quarterly basis, 12.3%, but it's because it's seasonal. It's probably year-on-year is a better number to look at, as well as for the full year is up by 55.7%. Of course, we had one-offs that were a very good positive number that you have seen. Return equity wise, we had a record high of 33.7% and for the full year 32.4. Now, this is an interesting slide that I would like to draw your attention to. So first time we are reporting IFRS based capital ratios. So National Bank has done what they promised to do, which was to prepare the banks and the system for reporting in IFRS. So this year we'll be reporting in the old standard, which is this one here, as well as IFRS. So now our investors can actually see with IFRS pluses on what our actual capital position is. So as you can see, the core tier one ratio in IFRS is 17.7 and tier one ratio of 19.7 and total capital of 21.7. So it's a very good capital position here, as you can see. And these are the numbers that we expect the fully loaded ratios to be at the end of 2023. So well above the minimum requirements. We'll probably be adding slightly more sub debt for the total capital ratios to have a slightly bigger cushion, but overall the core capital and tier one is very good. Also needs to be noted that our one of settlement that was here, it went to the folding level, so it's not included in capital ratios. So that is on top. This is just a graphical presentation. We have plenty of liquidity, obviously, and we are deploying it in mainly US treasuries, which are offering decent yield nowadays. And loan-to-deposit ratio is below 100%. So last but not least, we are delivering more than we promised in terms of return on equity. We are growing more than our loan book guidance is at 12.9%. In nominal terms, it's less, but constant currency is what we focus on. And in terms of capital distribution between 30% and 50%, because of very strong numbers, that has meant that this year we are distributing around $200 million total, including the interim that we distributed. So the board will be recommended to the shareholder meeting in May, $267 million lottery. and today we have also another 148 million lari buyback program that will be up to, which will be implemented until the shareholder meeting. So with that, that was half an hour. I'll stop the presentation and open up for the Q&A.

Thank you, Archul. So now we'll be taking the questions. And so we have the raise hand feature in Zoom and also the chat. And if you're dialing in, please press star nine. And also, please be aware that this call is being recorded. So we have a question.

Yes, Mark Webster is asking, do you have any observations of your performance in the Georgian economy in relation to the influx of Russian migrants? Well, the observation is that obviously the Georgian economy benefited from the influx of Russian migrants. Some of them relocated for long because it looks like some of them have opened businesses here. Others are working remotely for their IT workers. So they've... they've also moved some of their savings and are buying apartments. So overall, I think the Georgian economy is benefiting from the influx of Russians, predominantly young professionals. And we are seeing that in the total growth number as well as our numbers, which is not specific to Georgia. I think every country on the on the outskirts of Russia is benefiting from that because Russia, a lot of negative developments happening there. So you can basically see a lot happening in Turkey, in Georgia, in Russia, in Kazakhstan, in Uzbekistan and so forth. So it's in fact in Romania as well. So there are a lot of countries that are seeing this professional migration of young professionals maybe. from Russia. Moreover, I think what we are seeing is that because Central Asian countries need import-export corridor, it used to be mainly through Russia, and because Russia is heavily sanctioned and Iran is heavily sanctioned, Georgia remains, not Georgia, but South Caucasian corridor remains the main corridor for Central Asian countries. So we have seen the transport capacity fully utilized. We've seen railways and roads full of trucks and cargo going in and out for Kazakhstan, Turkmenistan, Uzbekistan, and so forth for all of Central Asian countries. And we are seeing more and more interest from this region in Georgia. So in fact, I believe we'll see a lot of investments coming in in those sectors in the next few years. So it could be good. James Hamilton. Do you want to read the question, Nini? And I can answer.

What would your CET1 ratio be if all of the surplus capital was deployed in the bank on an IFRS basis?

It's me. So if you can do your math, Nini, and answer this question in a short period of while. We'll be back, James.

Well, we'll get back to James. Any more questions? Raise hands from Jan Demir. And I'll let him ask a question.

Hi, Jan. Hi, thank you. Thanks for taking my questions as well. I actually have three questions. The first one is, it feels like you were a bit slower than the market on the landing side last year. Is there a specific reason behind that? So that's the first question. I'm not sure if you want to go, if you want to answer one by one or should I just give you three questions?

Why don't you give us three questions?

Okay.

Okay, the second question is... Take notes and then I'll answer. I'll take one by one. Great. I'll answer one by one.

Okay, okay. So the second... question is can you talk a bit about the nature of the settlement claim and maybe when you think about your capital returns this year in 2023 what kind of role would that play So that's the second question. And the last question is the NPS score. I mean, it's been increasing consistently over time. So big kudos on that. And... But my question is, why do you think it was that low back in 2017? I mean, what did you change in the bank? What changed for your customers? And why do you think they believe they are better taken care of right now versus in 2017?

Thank you. So let me take it one by one. Slow and long growth. So we believe that... Long growth is good, but we don't want to be cutting prices. We want to do it on a market basis and, in fact, increase the sophistication of how we do it in terms of convenience, et cetera, et cetera. So that's what we're focusing on. So it was a decent growth. I don't think it was much lower than the... Then the sector, it was slightly lower in the first three quarters. In the fourth quarter, I think we caught up. So if anything, I think the trend in the last quarter was good. We had seen this year slightly high cost of risk in consumer. So we tightened the underwriting significantly, in fact, in February and March. So calibration of that takes time. And I think we are in a better place now than we were in the first quarter of last year. So that had a little bit of an effect, but overall, I think we are doing very well there. So it's not significant or anything of notice in my opinion, Jed. I can only say that in SME lending, which retail and SME, which are strategic for us, In retail, we remain the leaders with a slight difference, but very similar rates with our main competitors at the 8.8%. And in SME around 33%, which is over the last four years up from 19%. So our SME franchise has done incredible, incredible improvement over the last four years, moving, lending, at a very different level. So we used to take 17 working days to say if we were going to issue or not issue a loan to an applicant. Now it takes five working days. And behind this, there's a lot of different systems that need to be changed. So all of that has been done. And there's more and more that we are doing to automate and make life easier for our SME clients. So I think fourth quarter was not behind the market in the beginning. I just explained it. On the settlement, nature of settlement, I think we have done the, we issued the note basically to the market that it was something to do with an old legacy claim. And it was a one-off unit of a kind, and I can't comment much more on that one. In terms of the third question, thank you for that one, because I take a lot of pleasure talking about this, because I think the big change, cultural change that has happened over the last few years in Bank of Georgia was something to do about the customer satisfaction and focus on that. So when you say that, why was it so low five years ago? Well, it was not that low. I mean, when you look at NPS scores of different banks, the universal banks, some of them have zero. So as you know, NPS is calculated by taking your recommending clients, i.e. happy clients, and subtracting the unhappy clients, right? and neutral is not calculated. So a lot of universal banks have it around zero. I don't want to name, but there are many large big name banks that have NPS around zero. So there are as many happy customers or as many people that would recommend their services as there are that would recommend against it. And that's why a lot of digital disruptors emerged. What we said was that if we want to be the intermediary of the future, we shouldn't be a balance sheet play, but we should be a service play. So, in fact, 33 was not bad for the Universal Bank. And these banks exist, and they don't necessarily go back, in fact, because the customers make decisions based on a number of things, including access to branches, including the easiness of this, that, and so forth, the number of products you offer. So they may be not super happy with you, but then they still stick with you. But we said, no, no, no, we want happy customers. And so what happens there is we need to measure what they're happy and unhappy about, and then build a system in the back to incorporate those those messages as quickly as possible. So that's what we have done. So I can talk about ours, what that means, but it's a transformation of Agile. It's making 26 updates per year to our app instead of three that we used to have. So incremental small updates as well as a lot of new launches that we had. So including fractional trading, including for our stock trading, which we do have, but we are not promoting frequent trading because we are a bank, but we want to have it as an investment product, insurance marketplace. We're doing a lot of new developments for our financial app and turning it into a financial super app. Not quite a super app, so you're not going to be buying bread from our application, but in terms of financial application, we are adding more and more capability to it. I hope that answered your question regarding the NPS score. So a lot of times when you see, when you see financial, financial companies focusing on payments, on customer satisfaction and easiness of use, the interaction and so forth, usually those were the sexy fintechs. So I would like to think of Microsoft Georgia as a service-oriented fintech with some balance sheet, obviously. But it's a core focus for us is to focus on customer satisfaction and providing services to customers at a very fast and quick manner and reflecting on what they need.

Super. That's very comprehensive, Arshad. Thank you very much. Thank you.

We have one another who had a raised hand for a while from a phone. So I can let the person in and then we can probably read the other questions.

Oh, yes. Thanks a lot. This is Constantine from JPM. Thanks a lot for the presentation and for taking my questions. I had three questions that I wanted to ask. So the first one is that it seems that the economic backdrop and growth backdrop is extremely strong. But still, despite this positive backdrop, are there any vulnerabilities that you see in the loan portfolio? Are there any areas that you think is worth monitoring more closely, prospectively? If you could please provide any color and guidance on that. The second question, could you please provide your expectation for cost of risk for 2023? And the last question, should we expect the bank to call its USD perpetual bonds next year? What's your thinking around this topic?

Thanks a lot.

So Konstantin, regarding the sectors to watch out for, I don't see any particular sector that we believe is under threat at this point. Obviously, there are some ups and downs, and they're always one or two cases where we are watching, but that's reflected in numbers. So nothing specific to watch out for. If overall on a macro basis, if there's one thing to worry about, it's still high inflation and still high refinancing rate. but given the overall strong macroeconomic performance, I think that covers it in a good way. The cost of risk, I believe it will be in the overall range that we advise, maybe slightly high, slightly low of 1 to 1.2, and that will be for this year or more. In terms of perpetual bond, I don't know if legally I'm, I'm allowed to talk about the intentions, but we understand the market expects us to call it at year five. So I'll stop here and just say that we have a very strong capital position.

I got it. Yes, that is very clear. Thanks a lot. And maybe if I could fit in the last question in terms of the... um in terms of the strong capital ratios that you currently have um see the expectation um that the bank is going to maintain these ratios um and for a medium term uh at this level so do you expect um some capital distributions did you expect the ratios to you know to come down uh with you know growth accelerating so how do you see capital ratio is trending on a medium-term basis, say three to five year horizon?

I think the buffers that we are holding right now are at record high. And we believe it's reasonable given the very high volatility. And obviously we have had a very strong year, but the environment is so volatile that I would like to hold those buffers high for potential bad times, but also for potential So as you said, if growth opportunity is there for us to grow loans and grow balance sheet, because the economy is growing so well and because it has deleveraged, I don't want to be in a position that we are short of capital. So things are changing and volatile so much that I think it's prudent to keep high capital position in these times. And that's what we're going to do in medium term. We'll probably keep

buffers between 1% and 2% above the minimum requirements.

Got it.

And is there an expectation that the minimums would remain as they are pretty much today, so there won't be any relaxation in the medium term?

We don't expect relaxation at this point with high inflation, for sure. So I think the regulator overall has a tight monetary policy. So relaxing banking ratios, I don't see that happening immediately. In medium term, who knows? We'll see. Because the capital ratios are very high, as you can see. By the way, one of the investors asked what would be the core tier one capital ratio if we included the folding buffer that we have. It would be extra 2%. So CET1 would be 19.6%, which is very high, as you understand, by the local standards and IFRS terms, it's very high.

So I hope that answers your question. So, yes.

Okay, got it. Thanks a lot. Thank you very much for the call.

Nini, there are a lot of questions in Q&A. Should we go through them?

So we have a question from Rona Gadia. He's asking if we can comment on the stickiness of the deposits that the bank attracted during the 2022, I assume, 2020 stream.

Yes. We believe that they are the usual deposit. So more than two-thirds of that is from the residents. Less than one-third is from non-residents. And even the non-residents that we qualify as non-residents have relocated a lot of them to Georgia. So we don't see all of them going back. So maybe small part, but not significant part.

could be at risk.

Then Mark Webster, is there a share price level where you might reconsider doing share buybacks? I'm looking at the other forms of distribution, accelerated reinvestment. Not really, because it's a capital return one way or the other. So we have had the indication from majority of shareholders that they, in fact, prefer share buyback to dividends. There are other investors that prefer dividends, so that's why we are keeping a good balance there. So, Rona, can you please provide more details of the exceptional gain? Was the cash or non-cash gain? And what does the banking tend to do with the access capital and default growth level because of this gain? So it was cash, 137 out of 141 or 143 was cash. And so it was predominantly cash, more than 95%. And we, We intend to keep that buffer given the volatility of the region and of the environment. And once that volatility decreases, then obviously we'll either deploy it or return it to the shareholders. In terms of more color, I cannot say anything other than it was a settlement of a legacy claim and a one-off in nature. Can you please provide more details? Yeah, I think we answered that. What is the new loan growth and FX income guidance for 2023. The NIEM, we don't provide such guidance. We just say that in NIEM, we can probably say there will be between five and 6%, but we don't expect further significant growth there. I don't know if it will be, it will be shorter term. So it will be between that range. So that should be decent. In terms of long growth, it's difficult to say at this point, but more than 10% is what we are guiding the market for medium term. And we keep the same guidance given the higher interest rates. But overall, we are seeing delivered economy, which is good for us. But given the high interest rates, probably it should not be much higher than 10%. But we will will be opportunistic and see what we can deliver. In terms of FX income, as I said, about a third, about 40%, about a third roughly of what we've seen in the second, third and fourth quarter may not be sustainable, but so far we've been, I mean, it started to decrease, but we still have very good numbers. So at some point we should probably assume that about a third of that will go away. What are the three most important components? This is Mark Webster. What are the three most important components of the Bank of Georgia story over the next three years? Loan growth, name capital distribution, low loan loss provision and MPLs. What are the three most important components of Bank of Georgia? I would say the three most important components of Bank of Georgia is our financial application becoming more and more important for our customers, our payments franchise becoming more and more important, and our loyalty program as well. And we do it in many different ways. And once we are very strong in those, then you can attach loans and you can have decent name and you can have low loss provision because our data capability is good in analytics. I hope that that kind of answers what we are focused on. So we are focused on being relevant to our customers on a daily basis. That's our main component of our success and story. And the rest is numbers that I think we are decent in terms of managing those. Anonymous attendee. What do you intend to do with the capital from exceptional letters again? I think we answered that. We intend to keep that right now until the high volatility and later on either deploy or return it to the shareholders. Firebird management. Can you discuss the taxation environment? Is it stable now? Yes, as you know, the government announced that banks would not be enjoying the so-called Estonian model. i.e. profit tax only on distributed profits from the 1st of January as it was planned. And they canceled the dividend, 5% dividend tax and added that to the profit tax. So it's 20% now. We had a one-off charge in the fourth quarter for that, but going forward, we expect that to remain at this level. And overall, I think Georgian government has been... been very good at not increasing taxes uh so you know for for what i can say is one of in nature um so yes i believe it's uh it's a stable axis um right now so so there is a race i think from on sandin but he may have forgotten to put it down but let's try

Probably.

So let's wait for 15 more seconds. So if you have any questions, please don't hesitate to ask. And then we understand you have busy lives, so we don't want to spend more of your time.

We'll wrap it up.

Well, I think we answered all the questions so far. So thank you very much for your time. I think results were very strong for 2022. For sure, it was record results. And we continue to focus on our main task, which is to keep our customers happy and deliver more and more product improvements to them. So stay tuned. Thank you. Bye-bye.

Thank you. Thank you. Bye.