Bank Of Ga Group Plc Ord

Thank you for joining our call. Sorry, please, Nini.

Welcome to Bank of Georgia Group PLC's fourth quarter and full year 23 results call. My name is Nini and I'm head of IR and I'm joined by Archil, the group CEO. And we'll start as usual with Archil's presentation and he will discuss macro as well as the highlights of the results and then we'll open the floor for questions. This call is being recorded also for your information.

Hello. Thank you for joining the call. I just realized that I need to update my profile picture on Zoom because it's quite outdated and we'll do so. Now on more important issues, thank you for joining on the presentation of our fourth quarter and annual results. Let me start the presentation. I hope you can see this. So as you can see, I'll discuss the results and then we can talk a little bit about Armenian acquisition as well. So regarding the results, we announced the fourth quarter profit of 329 million, which was flat on last year's net profit without a one-off, obviously. and return on equity of 26.7% and cost income of 34.3, which is slightly higher than we would like to see, and I'll talk about that later on. Our annual numbers are return on equity of just shy of 30% and cost income also shyer than 30%, so slightly more than now. Return on equity slightly higher than cost income, which I would like to see. On the NPS, We have 59, which is pretty good showing for any universal bank. And monthly active user of 1.4 million of our retail up, and that's up year by year, year on year of 21%, which is very big progress that we have to see. So few words about the macro. Georgia continues to grow and grow ahead of our expectations. So the statistics department just recently upgraded the previous two years of the numbers. So now it seems like in the previous two years, we grew a little bit more than we thought. So 2021 of 10.6% and then 11% in 2022 and 23% of 7.5%. Our expectation is that this year we will grow 6% and the year after that 5% to 5.5%. These are very good numbers, and I can talk a little bit about what's driving it, especially going forward, which predominantly is investment, just to cut the long story short. You see flattening in terms of the exports and imports, and on the remittances going back to the trend. So you see that this positive inflow, which was One in nature has flattened out, but we are back to the positive trend and we see the US and European share of the permit is growing substantially. The tourism revenue was okay and overall the annual number was good. The fourth quarter was slightly down. All in all, we are seeing that the inflation is close to zero. And just yesterday, the National Bank of Georgia reduced the refinancing rate by 75 basis points, which was one of the highest reduction that we have seen for a long period of time. And that was very logical to stimulate the economy, given the fact that the real interest rates were about 9%, which was very high, obviously. And there's potential to do more here going forward as well. You can see that the real effective exchange rate has come down slightly over the last few months, although lottery has slightly strengthened versus US dollar. This is predominantly due to the inflation differential with the trading partners, which is a nice way to correct that real effective exchange rate. And we may have some of that going forward as well. You can see that the net reserves have been up. We don't have the net reserves for the fourth quarter yet. We will soon have that as more detailed reports come out from the National Bank. One thing we can say is that that gross reserve reduction is partly due to the fact that in the fourth quarter, the National Bank reduced the mandatory US dollar reserves for our hard currency deposits From the maximum of 25 to 20, it depends on the dollarization component, how much you hold of that. Due to the fact that our dollarization is one of the lowest in the sector, we hold about 14.5, if I'm not mistaken. But nevertheless, this is just gross. On a net basis, it's flattish, and we are waiting for the latest numbers. All in all, we are seeing very strong inflows continue, not as much in the second quarter and third quarter or early quarters, but still very healthy. You can see that the bank credit growth year on year was about 17%. I'll talk about our own growth of close to 20%, so slightly above the market, but broadly in line. And in terms of the bank loan dollarization is about 45%. As you can see, it's down from the highs of 65. So it's It's pretty good, and that risk has significantly been reduced over the last few years. In terms of the NPL and the overall banking sector, Georgia is one of the lowest among the peer countries, and overall the quality of credit remains very good. In terms of the banking sector loans to GDP growth, it started to resume over the last three years. As you know, we've been deleveraging as the size of the economy has grown substantially. Loan growth last year was slightly higher, but still at very healthy levels of 65%, and there's more to grow basically in terms of the trend as the country develops and the overall risk profile of the country is reduced as GDP per capita grows. In terms of the national debt to GDP, we're under 40%, which is very healthy level, and that is a compliment to the Ministry of Finance and the government, obviously. And you can see the local component in that 40% or 39% is growing, and foreign currency is getting smaller, although it's still a substantial part. Now, a few words about Bank of Georgia and our results. So we remain on top of Mindvac and most trusted bank in the country, which then translates a number of advantages that we have. I'm not going to dwell on those slides. Here we have number of monthly active users, which has grown by more than 10% year on year. We are continuing that growth and it's a pretty good number given as a proportion of the population is becoming larger and larger. And in terms of our monthly after users of our retail application, the mobile application and the internet bank, it's grown by 21%, as I said, which is a very good number, and the daily usage by 29%. So on a daily basis, almost 700,000 people open our application. And it's really, we have become a dominant daily bank in the market, which is nice. 75% of all of our clients are also our monthly users of our application, and 50% of them use it daily. This is just a list of many different things that we have in our application, so it's not just a banking app, but probably a financial application with many different products, including insurance, marketplace, and many other things. So in terms of the The transactions we have, 68% are done in digital channels. So let's say the ATM is not digital or part of the pay terminals. Some of the transactions are digital, but others involve cash. So when you exclude those, it's 68%. Only less than 1% of transactions are done within the branch. You see the product sales has jumped significantly because we had a very interesting trivia game that we launched in our mobile application and that educated our customers regarding our products. So very innovative way that our marketing and digital channel department came up with, and it was a very successful one. So the idea is that it was a three-way game with some prizes, et cetera, but some of the questions were about finding different products and ways of doing it in the financial application. So it was an innovative, gamified way of educating our customers about the abilities of our financial app. It was very cool. In terms of our application and the internet application and the mobile application for legal entities, the usage is up by 28% year-on-year and on multi-base 7.4, which is an incredible growth given our presence on the local market. Predominantly, those are small businesses, but it's good to maintain that kind of growth, and we like to see that. This is an internal measure in terms of the customer satisfaction score, so it's hard to compare to worldwide things like NTS would be that, but this is just comparing to ourselves, but it does show that we are improving the quality of our digital offering for the businesses as well. In terms of the acquiring Volume, we increased the volume year on year by 38%. The Q over Q is somewhat seasonal because it was up 10%, which is really strong. 54.9%, 3.6% up in terms of the market share of all the client transactions. And also something which is significant is that 20% more users are using our cards than one year ago. It's an incredible number, given our position in the market, and we are very happy about that. NPS, as you know, is part of our DNA and religion now, and is about 60% for the last three quarters, 59% to be exact, and we like that showing. And as you can see, over the last years, it has come from the low 30s to these levels, and we like it that way. Now, a few words about our results, which I already mentioned regarding a retail equity of 26.7%. For the annual number is 29.9. Cost of risk was very nice at 0.4% as cost of retail risk was very low. And we continue to be well capitalized at 18.3%. for the CET1 ratio, well above the 14 and a half. And in terms of our loan growth, it was just shy of 20%. Our deposits grew 12.2%. I have said that our liquidity rate is at very healthy levels. Operating income year over year grew 12.4%. And on an annual basis, 26.4. Non-interest income grew decreased by 8.3% on a manual basis. That's for the quarter. You can see here that this is due to the fact that our FX income was larger than historically has been in 2022. But we have normalized it at the level of about 100 million, which is a very good showing at that. So on an annual basis, our non-interest income was up 11.6%, although we had a substantial decrease in effects, but other net gain commission income had a very healthy increase. Operating expenses were up by 24.4%, which we are cognizant of, and we don't like to see such large increases. About 6% of that came from the transaction expenses and one project that we're going focused on some growth ideas. But regardless, I think it's a high number and going forward, we'll have a lot of focus on cost control to make sure that it remains or reduces in terms of the cost income from the current levels. I mean, the quarterly one, not the annual one, because annual one was outstanding just below 80%. Loan portfolio, as I said, was very healthy, 20%, and because growth of 12.4, so I'm not that well on that. Net interest margin reduced somewhat to 6.3%. There were a couple of questions that came in already today from some of the investors regarding this, what is our expectation? And we expect to have a flattish in the first quarter from 6.3%. So probably the same, maybe 10 base points less, but probably the same. And we'll probably see somewhat decline over the next 18 months to between 5.5% to 6%. Cost of risk we already touched on was outstanding and pretty low at 0.4%, which meant that for 2023, we are at 0.7%. And that pretty much summarizes overall results. I will also like to add that for the annual number, net profit is 1.37 billion lari, and slightly down for the reported one without the one-offs, but we basically had a very large profit in 2022, which were normalized in this year by increasing In terms of the capital ratios, they are very healthy capital ratios. The total capital is 2.5, but total capital is something we can attract very easily. And in terms of core tier 1 and tier 1 is 3.7 and 3.3. We have already communicated to the market that when we close the Armenian transaction, which will have about 100 basis point impact on these ratios, which would still leave us at very comfortable levels. In terms of the liquidity ratios, you can see it's 125 and 130, and those are very healthy levels, and net loss to customer funds at under 100, which is also a very healthy level, given also the fact that we have a lot of different IFI financing and as well as ability to draw down on public markets. Because you may remember that last year we retired our Eurobonds without renewing it because we didn't have the need for it. And that's what's reflected here. And in terms of the Growth, historically, when you look at the growth in terms of profit from half a billion to 1.4 billion over the last four years, we have had a very nice ride. And that, coincidentally, it goes alongside the our active mobile application users, retail application users. Obviously, there's not a direct relationship, but we think it shows the franchise strength alongside profitability. In terms of the dividends, you may have seen our announcement today that we announced a dividend of 4.94 Lari per share, bringing the overall annual dividend to 8 Lari. which is a 5% increase over the last year's dividend. And as a reminder, the last year dividend obviously was boosted by the fact that the last year income was boosted by a strong one-off. So we've normalized and slightly increased the dividend from a high last year base. And also the board will recommend to the AGM an approval of the dividend as well as the increase of the buyback program of 100 million Lari. That 100 million Lari obviously will start now, and it will be on top of the 62 million that was announced previously, of which only 24 has been spent, and we've been in a close bid, so this will resume. So 38 million of the previous tranche left and on top 100 million, a lot of going forward. So with that, I think this was the record of 18 minutes. And we can open up to the most interesting part, which are questions.

So we can take your questions. And for that, we have the raise hand feature in Zoom as well as the Q&A chat. And if you're calling from phone, please press star nine and we'll see you in line. And we have the first question from Robert Sage.

Yes, thank you. Yes, hi there. Can I have two questions, please? The first one relates to your Armenian acquisition, which seems to be extremely favorable from what I can see. But I was wondering if you could share with us what your sort of expectations are generally in terms of lending growth over, say, the medium term for Ameria Bank, and whether or not you think that profits might be rising broadly in line with lending growth, more rapidly, less rapidly, or just what your general expectations might be. The second question on costs is that you mentioned you were a bit disappointed with the cost income ratio in Q4, but you felt the full year number below 30% was very good. Are you encouraging us to think in terms of something between the two for 2024?

I'll start with the last one, yes. So basically, I think we will be conscious of the cost and cost increase, the inflation in Georgia was high, and I think that is something that is taking time to be reflected in the overall cost as well as the labor costs. Having said that, I think given the scale and the increase of the overall business, we have the luxury of making sure that inflation is not directly passed through to overall costs. So I think given the growth of the business, we should be able to absorb that. So yes, we should be somewhere between 30 and 35, exactly where we will see as the year unfolds. In terms of the Armenian acquisition, it's something that we are quite excited about. So on one side, this is a top brand in banking in the country. It definitely is well known for the for the quality of its operation, for the corporate governance, for the quality of the management team and the balance sheet. So it's very good. And obviously, as a result of the allegiance, we got comfortable with all of the above and basically went on to recommend it to our shareholders. Also, the Armenian market and macro is quite exciting. It's very well managed. from the macro perspective, where the monetary discipline and the budgetary discipline is there, and the banking sector has tightly managed as well. So all of this, plus the fact that Armenia Bank, although it's a leading bank, only has 20% market share in loans, it has further growth opportunity to gain market share As long as it's able to do so profitably, we would obviously support that. So my expectations is that I think it can easily grow more than 20%, all else being equal, so to say, as the economists like to say. But it does seem like a higher growth environment specifically for a leading player. And that may be a good growth story, in fact. Last year, Ameribank registered $117 million of net profit and ended the year with 33% increase of the portfolio, which was phenomenal and a very strong margin. Will the profits grow in line with the portfolio? Probably. I cannot say more than that at this stage, but I think as we go forward and start reporting about the of both companies, hopefully soon. We are still waiting for the CBA approval, the Central Bank of Armenia. Then we can provide more color on it. But overall, I would say that higher growth, self-funded, given the high profitability that the American bank is enjoying. And given the fact that we are guiding ourselves, 10 plus percent combined growth may probably grow somewhat. Thank you.

Thank you, Robert. The next question is from James Hamilton. Hi, James.

Thank you, and good afternoon. A few, if I may, as this is my last time out of the box, so forgive me. Firstly, the sort of 20%-ish and 10%-ish growth for Armenia and And Georgia, and given you're expecting 6% of GDP growth in Georgia and you're sort of taking market share, 10% sounds a little on the light side. Would you agree with that? And obviously 20% in Armenia is a bit of a slowdown, albeit a very good number. So if you could comment around that, that'd be healthy. Secondly, on credit quality, I mean, given the Georgian economy remains so robust, is it right in thinking that the impairment should remain sort of low and possibly similar to what you saw in 2023? And finally, on the digital, you spent some time sort of talking about the digital progress in the core bank. I was just sort of wondering how you could do a sort of a compare and contrast with Ameriabank and what you're hoping to bring to them and how quickly you can bring it to them. And would you be expecting that to have a similar sort of profile? You had the chart where your growth and your NPS improving. Are you aiming to achieve a similar thing in Armenia?

Thank you, James. And I would like to highlight your very positive attitude regarding the Bank of Georgia stock a few years ago when you called out a significant multiple of the stock, which we are up four times since then. So a lot of people made a joke about the call, but I think we are progressing. Regarding the growth of 10% versus 20%, I think we've been able to deliver more than that guidance historically. Having said that, I don't want to oblige ourselves to grow much more than a couple percentage points above the nominal growth because we are a large bank and market share gain within Georgia is not our target. So it's... I think it's a healthy target. Henning said that opportunistically we may grow sometimes a little bit more, sometimes a little bit less, but historically we have grown more. Regarding Armenia, in fact, 20 plus percent since, I mean, from what I'm reading in terms of the local environment and what I'm hearing from the management is that it's very doable and could be higher than that, 25 and more, so we'll see. We'll see, but it certainly is a really exciting story where over the last few years, the country has started to open up to Western capital and outside investments. And we see the likes of Adobe and Nvidia each opening back offices there and employing about a thousand people each and other exciting things that are happening in Armenia. So it's a little by little, there are a lot of good things happening. In terms of cost of risk, I agree that when there's a benign environment, we'll be below our mid-term guidance of slightly more than 1%. But we don't provide more guidance than that. I think as the economic growth will continue at these levels, I think we'll be below that. In the cycle, we'll be above that. So it's all about the medium-term guidance. On the digital front, you're absolutely right that when we see, we do see that Ameribank is a fantastic brand. It's a dominant in premium retail, but in the mass retail, it can do more, especially in digital front. And that is exactly topic or subject where we will concentrate together with the local management and see what we can do there. It's too early to provide any kind of guidance there, but I'm sure there's plenty of upside there because we feel that we have done a decent job in Georgia with that. And it's not just a digital offering, but it's the full cycle of listening to the customer by channeling by product, really understanding what the customers want, taking that back to the product, updating it and doing it much faster than we used to do. And it's easier said than done. It takes a cultural transformation, but it also has a lot of techniques attached to it. So it's the whole thing, how we approach that part. And we think that mass retail is something where our media has a lot of upsides and we're quite excited about it.

Thank you and good luck.

Thank you. Thank you. So we have a couple of questions in the Q&A chat. Two questions from Mark Webster regarding the capital distribution. One, how easy are the share buybacks? Will you source shares from Georgia capital? That's the first question. Would you like to answer or should I read the second one?

I'm happy to answer that. I mean, There are a lot of rules regarding how the buybacks are done. So it's an order that goes to the broker and brokers do it on the open market. So there's no sourcing per se coming from ourselves. Georgia Capital is its own organization and will decide what it wants to do with the shareholding that they have. So I can't say more than that for sure. I mean, it's like I have no say there.

The second question is... How are you thinking about the mix of capital return in the next few years, buybacks, dividends, and how do you decide on the exact percent payout ratio in the 30-50% range?

Yes. As we said, we are not going to change that regardless of the fact that we have been able to deploy our capital by enlarging the As you know, Ameribank is $3.5 billion of, roughly speaking, assets and about $0.5 billion of equity, $170 million of net income, and that has been added to us, and we didn't have to change our capital distribution because we've been generating a very good amount of capital. Going forward, we will see. I mean, we'll probably be on the low end, of that range, especially given the high growth possibilities that we are seeing in Armenia. But it very much depends what will happen in terms of growth of the overall economies and the opportunities and so forth. For us, profitable growth is what we care about. If we don't see that, then we will be more aggressive on the capital distribution. If we see that, we'll be more aggressive on growth. But I think so far what we are seeing is that those two economies, which are politically managed from the macro perspective and a lot of good things happening, there's plenty of growth. So that may mean that we may be on the lower side on the capital distribution. Regarding how we define or decide on the level of buybacks and share on dividends and buybacks, We believe that the mix serves the needs of our shareholders, which are not the same everywhere, but there's some shareholders that would like to see yield and it's there. And there are some shareholders that like to see buybacks and in fact prefer to all of it to be buybacks. And there's some flexibility that comes with it. So it's a mix, but there's no science behind it. So it roughly has been about two-thirds, one-third, but it can change going forward.

So two more questions in the chat from Byron M. First one, well done on another strong set of results. You have done a lot to try to improve the NIMS through the cycle for the bank. Do you think you're in a better place structurally so that it compresses less as the MBG rate comes down?

Absolutely, yeah. thank you for the question because it allows me to highlight the advantage that Bank of Georgia franchise has and that franchise strength comes from the fact that we are top of mind franchise we are most trusted franchise our retail deposit ratio is 45% and our cost of deposits is lower than some of the competition and all of that I think translates into competitive advantage that this is something that we enjoy. And that has been achieved over the last few years and we see it in the numbers.

And the second question is on digital. What would you like to see happen with a super app in time? What is your three, five-year strategy for it? And how much opportunity does the regulator give for you to sell more things to your customers? Or would they rather you are only a platform that does payments?

So... Georgian regulation is basically 99%, if not 100%, similar to ECB regulation, which basically means that it does not allow the closed ecosystems that some of the Asian countries do. And having said that, I think we are able to use our application as a platform for third-party products to be sold, but it's predominantly financial and connected to financial services. So probably that's pretty much summarizes what the regulator has guided us regarding that. And I think that's what we have been doing in terms of becoming the financial super app rather than super app per se, like doing everything. So it's somehow connected to the banking services, whatever you find on our financial app. And there's plenty to do there. And that's why we are not saying food there. But we are providing more and more regarding the financial needs of our customers.

We have a raised hand from Simon Nellis.

Hi. Hi. Hi, thanks for the opportunity. Yeah, thank you. My question would just be about guidance for this year. You've provided some guidance on margin and asset growth or loan growth. Just wondering if you could say some more detail on what you expect for fee growth this year. It was very strong last year. And also just on risk costs, especially given that the credit risk environment seems to be improving. I mean, you saw a nice decline in interest in NPLs, both in the retail and the CIB business. That'd be my first question. And my other question would be around Armenia. Apologies if you've discussed this at the call on the transaction, I wasn't able to attend it, but just wondering if you have any, I mean, the multiple is quite low and I'm wondering, do you have any insight as to why the sellers were willing to sell at such a low level or is there something, that we should be worried about that reflects that low valuation. And anything on mortgage quality of the book in Armenia, I think some of the central bank and I think the IMF have some concerns that the mortgage house prices have gone up a lot and affordability is an issue in that market.

Yes, thank you. Regarding more guidance, I can't provide more guidance, so we don't provide more guidance. I think there are a number of expectations that are laid out regarding cost of risk, which should be below our medium-term guidance. And me, I did say, basically, that first quarter should be flattish and then going slightly down towards 5.5% to 6% over the next 18 months. Having said that, a lot of things can change during 18 months and it can be higher or slightly lower, but those are things that we can see from now. Regarding the fee growth, I cannot say more than that. We can't say. I think one thing I can say is that Anchor Georgia is a leader in daily banking for mass retail clients. And that's a strong and good franchise uh and it's not easy to achieve or displace so itself that that i think provides a good basis regarding armenia um so so in what was the question i mean mortgage i remember but there was another multiple of the transaction yeah just a little multiple yes simon i mean one thing i can say is that there's definitely nothing to worry about one thing is that this is the largest equity ticket that ever has been written in the country. I mean, there would be larger investments, but in terms of the equity ticket, it's the largest equity ticket ever written. So I think the ability to write a $300 million check in one go and do it smoothly without disturbing any kind of market because we did it with our liquidity and capital is an ability that is scarce. It's not easy to find buyers of that nature, especially given the fact that we are a financial player. We are a UK-listed player. institutionally owned. It's really an institution. And from the country's perspective, obviously, when you are looking at investors for your leading systemic bank, obviously, I think there, too, we had some advantage. So, in other words, they may have been other buyers which were not banks and were more like a rich individual that may not have been able to be cleared because of the fact that it's a systemic bank. So those advantages allowed us to negotiate a very decent deal. But in terms of the advice, you've seen our advisors, it was It was advised by JP Morgan, and Baker McKinsey was our lawyer on it, and it was cleared by all institutions, etc. So it has gone through the highest standard of scrutiny and transparency, so definitely nothing to worry about. Regarding the quality of the mortgage book, what we have seen is that Ameribank has been early, very strong player on that market and somewhat has slowed down recently given the fact that they thought that the risks were at a point where they didn't feel like they wanted to push it. So I think the approach has been prudent, which will serve them well through every kind of concerns that there may be. Although the concerns should not be very strong given the fact how strong the economy is doing.

Thank you. Thank you, Simon. One question in the chat from Brad . What is your targets for NPL coverage?

We don't have such targets. We feel that we are quite comfortable with the NPL coverage that we currently have. And, you know, pro games regarding that, we're quite comfortable with it.

And then Ed Lamb is asking about a myriad bank acquisition. Are you surprised the seller didn't want a mix of cash and equity slash shares rather than just cash? Would you have preferred that?

Yes. I think cash is king, as they say, right? When we have cash, you have the choice of choosing where to invest. We had the ability to use that advantage that we had, i.e. the ability of writing a cash check, And obviously on the seller side, we had EBRD, we had ADB, and we had one passive fund and the management, and then one large shareholder. So there was overall preference for cash, although equity could have been considered, but given our strong position, I think ability to write a cash check allowed us to have a better deal. So in that case, when we are doing plenty of buybacks ourselves, you know, we believe that it's a strong position to be in, to have that ability to write a text chat.

So no more questions in the chat and no more raised hands at this point.

So there are no more questions. Maybe I can briefly summarize. I think we have had a very strong year with 29.9% return on equity and 29.8% cost income. We did have last quarter of slightly higher cost increase, but as I said, there was one of component connected to the acquisition, but also will be more focused on the cost going forward. And we when we look at the strength of the franchise, we are very happy to see very strong growth in our retail, number of retail clients, especially in digital activity that we are seeing, as well as on the legal company side, where we also see very strong growth of seeing a lot of companies signing up for our digital channels and using more and more of our services. And going forward, we see that the region is enjoying an uplift in terms of the very strong investment inflow. We are seeing different industries that are emerging, including the higher education, where a lot of students from Asia, especially India and Pakistan, have started to go to medical universities in Georgia. They used to go to Moscow and Kiev. A lot of them have relocated here. This has become a very strong industry. On top, you have IT. On top, you have very strong emergence of very strong logistics players. There's a lot of investment going on to the ports and to energy sector. All of this is a significant revival in terms of the number of projects being discussed and large investments coming in. This is here to stay. This middle corridor thing and all that comes with it is very real. And we are seeing broad political stability in 2023. Georgia got a candidate member status with Europe, and that also provided another layer of interest by the investors. So all in all, I believe this is very interesting times. And hopefully in a few years' time, this will be remembered as the golden age of opportunity in this region. And I think we are best placed to capitalize on it with leading banks in Georgia and Armenia. So with that, thank you very much.

Artur, we have two questions in the chat. Maybe you'll take a look. One is from Firebird. How much is left of the Russian immigrant boost to the economy? Many have left, correct?

Yes. So about what we are seeing, it's an estimate, but what we are seeing about one third of the immigrants have left. And you see it in the remittances that have normalized fully and you see it in slightly less growth in consumption. But at the same time, you are seeing much stronger resident consumption growth and residents buying smaller, but still a lot of apartments and so forth. So I think that positive wave has kind of subsided. Having said that, it's more than replaced by the strong investment drive that we are seeing in many different industries. And that is not just some of the services that are needed, but also there are Western companies relocating Sandora bottling from Ukraine to here and then supplying the whole region from here. Red Bull has been rumored to announce a new large bottling facility close to Kutaisi, which will supply the whole region. There are many... Heineken is doing bottling for the whole region from here. So there are many interesting projects that are starting to happen. The low taxation, low corruption, and a good geographic location, I think, is little by little starting to have... impact on other longer-term effects that we are seeing.

There is one question which I think is a follow-up on what you said. Is one-third of the non-Georgian immigrants or one-third of all inflow post-Russia-Ukraine conflict?

One-third of non-Georgian immigrants, roughly speaking. The exact statistic is hard to draw because it's convoluted by the number of tourists in the country. So it's an estimate. So don't, you know, it's rough estimate of that number.

And the question from anonymous attendee, do you have any plans for coming to the international debt capital markets with a new Eurobond issuance?

We will see. We will see what the needs are in terms of liquidity. And then based on that, we will see what we can, what the what the need for us will be. And then based on that, we may. I think given the fact that we are a larger player now together with Ameriabank, we're just shy of $16 billion in assets. That allows us to really increase the size of our offering, be it tier one or Eurobond. So it will be opportunistic. I can't say more than that at this point.

And then again, from Firebird Management, please repeat what the expected fiscal deficit is for this year. Any chance of extra taxes on banks to fund deficit?

Given the very, very strong fiscal position of the government and given the fact that the government ended last year with lower than budgeted fiscal deficit of, I think we ended at 2.5%, I think based on that and the strong growth, I really believe that there's ample room to continue strong capital investment. In fact, we've seen that in the budget and we have heard that they are considering even more in terms of capital budgeting. We are in an election year, so it could be slightly more than 3%. We'll see, but I don't expect any additional taxation. As a reminder, we already are running at an increased taxation higher than any other sector, really, because we are taxed at 20%. But, you know, based on that, we don't have any expectation of higher taxation. And if anything, I think as the mandatory reserve requirements start coming down, I think there's another way of indirect taxation, let's say, I think that should reduce. So all in all, The answer is no, probably not. What do I know? But no expectation.

No more questions.

Thank you very much for your attention. It has been a pleasure. Great year. And we look forward to doing more now that we are also concentrated on Georgia and Armenia and having exposure to very strong growth good growth well managed from macro production point of view and from the point of view of countries which have very good asset quality and backing and top franchises so with that we will be back soon thank you for the agm which we just ended yesterday with very strong support with the armenian acquisition with 100 in favor 100.0 in fact in favor which is the highest number of any decision ever made or recommended. So we appreciate that and we'll put our heads down and deliver on these plans. So thank you very much.

Thank you. Bye.