Lion Finance Group PLC

Hello, everyone. Welcome to Lime Finance Group PLC's second quarter results call. My name is Ninia Arshakouni. I'm head of investor relations and I'll be moderating today's session. We are pleased to present our results for the second quarter, which you can also see on this slide. So we have a very solid set of results with our profit reaching $513 million. million gel in the second quarter up 19% year on year, resulting in the cumulative half year profit of just north of 1 billion gel up 28% year on year with return on equity standing at a very strong 27 and 28% in Q2 and the first half of 25 respectively. And these results are underpinned by robust customer franchise and portfolio growth across our core operations in Georgia and Armenia. I am joined today on this call by, as usual, by the Group CEO, Archil Gaceciladze, who will share his perspectives on the Group's performance. And for the first time, we're delighted to have Hovhannes Doroyan on this call. Hovhannes is the Chief Financial Officer of Ameriabank, the Group's banking subsidiary in Armenia. And we also have Akakeli Kokeli, our macroeconomist, who will walk through the recent macroeconomic developments across our core markets of Georgia and Armenia. Following the presentation, we'll open the floor for your questions. And as a reminder, this call is being recorded. With that, we'll first start with the macro highlights. So I'm handing it over to Akake to kick off this webinar. Akake, you can go ahead.

Hello everyone. I will be presenting the macroeconomic update for our core markets, Georgia and Armenia. Let me start with the growth performance. Georgia continues to benefit from a balanced mix of strong external inflows and resilient domestic demand. In Armenia, growth momentum has shifted more towards domestic drivers supported by fiscal stimulus and credit expansion while external demand continues to normalize. Preliminary numbers show that both countries performed better than expected in the first half of the year. In Georgia, real GDP growth was 8.3% year-on-year in the first six months. while Armenia posted 6.3% growth. So given these strong numbers and an improved outlook, especially following the recent signing of Armenia-Azerbaijan peace framework, has enabled us to revise our full year real GDP growth forecast upward to 7.5% in Georgia and to 5% in Armenia. So this sustained strong growth performance in recent years has led to sustained increase in per capita income levels in both countries, as you can see on the right hand side of the slide. However, this average income levels are still below Central and Eastern European peers, which leaves significant room for further catch up growth in the years to come. Now let me move on to drivers of growth. In Georgia, external demand continues to play a major role, with traditional inflows from exports, tourism, and remittances increasing steadily. In Armenia, exports continue to normalize from one of spikes from the last year, while other inflows, and particularly remittances, remain solid. Beyond these traditional inflows, we see strong performance in non-travel service exports and particularly IT services, which support hard currency inflows and also generate productivity gains. for the wider economy. So all these inflows taken together have also contributed to strengthening local currencies. Georgian lari and Armenian dram continued to appreciate in the second quarter, even after the US dollar stabilized against other major currencies. Notably, real exchange rates of Armenian DRAM and Georgian LARI are adjusting after significant appreciation in previous years, as you can see on the right hand side chart. This adjustment is taking place through lower inflation relative to trading partners with no pressures on nominal exchange rates. We expect both currencies to remain stable in the medium term, underpinned by healthy macroeconomic fundamentals and prudent monetary policies. Now, strong exchange rates also supported low and stable inflation in Georgia and Armenia, and these recent upticks that you see in the headline numbers are mostly attributed to food price increases, while core inflations remain well aligned to central bank targets. We therefore expect these food-related pressures to be short-lived. Still, given the globally uncertain inflation environment, central banks of Georgia and Armenia maintain cautious stance, keeping interest rates unchanged. And we don't expect any cuts in the remainder of the year. So beyond price stability, two additional pillars to overall macroeconomic stability are adequate levels of international reserves and prudent fiscal management. And in this regard, we have very positive developments in both countries. Particularly in Georgia, the central bank has been actively replenishing international reserves, which reached uh five billion us dollar and at the end of july which is the highest number since 2023 and the interventions the foreign currency purchases were particularly high in recent months so there is also positive development on the armenian side where reserves are also increasing and we expect this trend to continue uh improving the resilience of georgian and armenian economies On the fiscal side, we also see both countries maintain discipline. However, the public debts have taken different trajectories. The Georgian government continues to decrease external debt, and this has brought the total government debt to below 36% in mid-2025, which is a significant decline if you compare it to almost 60% back in 2020. On the Armenian side, the government is carefully balancing the current spending needs with longer-term fiscal sustainability objectives. The total government debt to GDP is expected to stabilize at around 56% in the following years, and the fiscal discipline is also supported by ongoing IMF programs. And lastly, the financial sectors in Georgia and Armenia have benefited from favorable macroeconomic conditions while also supporting growth. We continue to observe robust lending expansion in both countries, while loan dollarizations have decreased significantly in previous years. reducing exposure to exchange rate risk, and the balance sheets remain strong with non-performing loans at one of the lowest levels among the peer countries. So this concludes my part. Back to you, Nini.

Thank you, Akaki. And now we can move to the group's results and I would like to ask Archil to share his highlights.