Lion Finance Group PLC

Today, we're pleased to report our results for the first quarter of 2026. My name is Niyar Shakuni. I'm head of IR, and I'll moderate this call today. And we have a few speakers today on the call. I'm joined, as always, by the group CEO, Archil Kachirchivate. Also, we have our group and Bank of Georgia CFO today on the line, Georgi Shagize, who joined the group recently in March 2026. We also have Holanest Oroyan, who is the CFO of Ameriabank, our banking subsidiary in Armenia, and Akaki Nikokeli, our group economist, who will talk about macro. First, we'll kick off with a few opening remarks by Artur, and then we'll continue with the other parts.

Hello, everyone. Thank you for joining the call. We had a very interesting quarter. This time, 20 years after we joined the London Stock Exchange in 2006, we went public, in fact, in front of GDRs. And in 2026, we joined FTSE 100, as many of you may know. And that is a very special moment for all of us because it kind of summarizes the achievement over the last 20 years. But it's only a new beginning for more to come. So as you remember, who we are. We are two-thirds Georgia and roughly one-third Armenia. It's not quite there, but Armenia is increasing very rapidly. We're serving about 2.7 million retail customers and delivering close to 30% return on equity over the last five years on average. And we have a very strong market share in Georgia of 38 and number one position in Armenia with growing market share. Could you go to the next slide? Yes. And in terms of the quarter, we had a very solid quarter. We had 14% year-on-year increase in our profitability and 27.4% return on equity, slightly down with more capital, in fact. Our risk remained at a very low level with 2.1% NPR ratio and 0.3% Cost of risk, which is well below our midterm guidance of 80 to 100 base points. I'm particularly happy about balance sheet growth. We saw 23% growth of our loans, very strong in Armenia and also quite good in Georgia, and deposits growing at 17.5%. Also, on the revenue side, we saw strong growth in the net interest income and fee and commission income, but not so strong in terms of the FX income where we see the pressures. Costs are in line more or less with the revenue. but they remain a focus, especially in an environment where the incomes are growing double-digit, which is very good for our consumer franchise in both countries, also remains a focus there. The franchise, and talking of franchise quality in both countries, the MPS scores remain very high, and that underlines that our retail franchise is very strong and incorporated as well. So with this, all of this is, in fact, based on very strong economic performance, and that's why we would like to cover a few slides on the economy, and we'll do that on the next few slides. Thank you.

Thank you, Archie. Let me provide a big update on the macroeconomic developments in our core markets Georgia and Armenia. And let me start with growth performance. The macroeconomic backdrop has continued to be favorable. And both countries, Georgia and Armenia, have entered 2026 on a strong footing. Preliminary Q1 growth numbers are quite strong, 9.1% year-on-year GDP growth in Georgia, 7.1% growth in Armenia. And services continue to be the key growth drivers in both countries. So this stronger-than-expected performance in the first quarter, together with demonstrated resilience of the economies, have led us to revise our full year real GDP growth forecast for 2026 to 7% for Georgia and to 6% for Armenia. As you can see on the right hand side, the sustained strong performance of these two economies combined with A positive medium-term outlook have positioned Georgia and Armenia among the top-performing economies in the broader region and distinguished by significant advantage in income per capita levels compared to our intermediate peers. The recent escalation in the Middle East have introduced downside risks, mainly through higher energy prices and transport disruptions. However, the impacts on Georgia and Armenia have so far been muted due to limited direct macroeconomic exposure to the region. resilient and diversified external inflows and sound macroeconomic policies. Furthermore, in the scenario of prolonged conflict, we see upsides in terms of increased strategic relevance of the middle corridor, as well as possible redirection of tourism and capital to South Caucasus. Current performance has been also very strong despite regional geopolitical tensions. As you see on the left-hand side, in contrast with previous episodes of stress, Georgian Larry and Armenian DRAM have remained broadly stable, underpinned by strong macroeconomic fundamentals and prudent policies. We expect currency stability will persist in the future as the economies remain resilient and policies remain agile. The main area where we have seen the impact of the Middle East escalation is inflation. Higher food prices have added to existing food price pressures and have pushed inflation higher in both countries. We expect the headline inflation numbers will remain elevated throughout the year before returning to the central bank's 3% targets gradually as the supply-side pressures ease. The monetary policies remain prudent in both countries. Yesterday, National Bank of Georgia raised the refinancing rate by 25 basis points, reinforcing its commitment to keeping inflation expectations in check. We expect the monetary policy in Georgia will remain moderately tight throughout the year. In Armenia, the central bank has kept the refinancing rate unchanged at 6.5% since the beginning of the year. However, recently, their communication has become more hawkish, so we don't rule out the possibility that we may see some modest tightening over the year. The central banks have been also very active in reserve accumulation, also in the beginning of 2026. The gross international reserves had reached 6.3 billion US dollars in Georgia and 5.5 billion in Armenia by the end of March. And in both countries, the reserves remain above the International Monetary Fund's minimum adequacy thresholds, reinforcing macroeconomic resilience in both countries. Another key pillar for macroeconomic stability is fiscal discipline, and Georgia and Armenia have been very consistent in this area. The government debt to GDP ratio continues to come down in Georgia, as fiscal deficits are kept at 2.5% of GDP. In Armenia, the government has been very successful in balancing elevated spending needs with fiscal sustainability objectives, and despite elevated spending fiscal deficits, they have kept the public debt to GDP ratio more or less stable. This year, we expect the fiscal policy will remain growth supportive, mostly through sustained capital expenditure. And lastly, the financial sectors, banking sectors in both countries remain sound, supported by strong lending expansion, historically low levels of loan dollarization, and solid capital buffers. So that's all on my side. Back to you.