TIDMBGEO
RNS Number : 2931G
Bank of Georgia Group PLC
16 March 2020
London, 16 March 2020
Bank of Georgia Group contingency planning - COVID-19
Bank of Georgia Group PLC (the "Group") announces that it has
introduced a number of resilience protocols and a comprehensive
business continuity plan aimed at protecting the health and safety
of all of our staff and customers. These have been introduced in
conjunction with the Government of Georgia and the National Bank of
Georgia, our banking regulator.
Bank of Georgia (the "Bank") has implemented its Business
Continuity Plan (the "BCP") aimed at the protection of both our
employees and our customers. All of the Bank's 93 main branches
will remain fully open, but two-week shifts have been introduced
for branch staff, to ensure ongoing availability of team members.
Express metro and 24/7 branches will remain fully open however,
with immediate effect, the Bank has initiated the temporary closure
of the customer service support areas of a number of express
branches, with only the self-service terminals and ATM areas
remaining open.
Banking services will, where possible, be conducted exclusively
via call centres, and we are also reducing the physical presence of
bankers in the Bank's service centres. Two-week shifts have also
been introduced in front offices in other service areas throughout
the business. In the Bank's back office environments, the majority
of staff are now being encouraged to work from home, with others
working, where appropriate, from split locations. These changes
have been implemented to reduce physical interaction and prevent
the spread of Coronavirus, whilst maintaining the full banking
capability required to support and assist our customers.
On 13 March 2020, the Government of Georgia announced a series
of support measures designed to mitigate the potential economic
impact of the global spread of the Coronavirus, COVID-19. These
measures are expected to create additional financial resources
within the economy of GEL 1 billion, and include:
-- At our suggestion, a three-month grace period on principal
and interest payments on all retail loans has been agreed with most
banks. Interest will continue to accrue. This will significantly
reduce the requirement for customers to physically visit Bank
branches.
-- Potential restructuring opportunities for corporate customers
and all legal entities operating in the tourism industry which has
already slowed significantly across the world. Specific sectors
will include the hotels, as well as restaurants, travel agencies,
and passenger transportation companies, amongst others. Interest
will continue to accrue.
-- These companies will also have their property and personal
income taxes deferred by the Government for an initial four-month
period. In addition, the Government will subsidise interest
payments for six months, for small and medium sized hotels with
less than 50 rooms.
-- The Government will double the volume of VAT refunds to
companies, from an expected GEL 600 million, to an anticipated GEL
1.2 billion this year.
-- The Government will increase its proposed capital expenditure by GEL 300 million this year.
These initiatives are aimed at alleviating challenges created by
the global COVID-19 crisis, which are expected to reduce the GDP
growth rate, particularly in relation to the tourism industry which
has already started to experience a high level of cancellations.
Bank of Georgia's lending exposure to the hotels and associated
tourism-related sectors, such as restaurants, is currently
approximately GEL 800 million, predominantly all of which is fully
secured.
When the Group announced its 2019 preliminary results on 13
February 2020, it reiterated its strategic targets based on at
least 20% return on average equity, and c.15% growth of its loan
book. In addition, the Board of Directors announced its intention
to recommend, at the 2020 Annual General Meeting, an annual
dividend for 2019 of GEL 2.67 per share payable in British Pounds
Sterling at the prevailing rate. Given the current level of
uncertainty with regard to the global impact of COVID-19, and the
potential length of time of that impact, the Board of Directors
will keep these issues under review in the light of developments
over the next few months. In the meantime, the Board of Directors
has decided not to recommend a dividend to shareholders at the 2020
Annual General Meeting, at this stage. When the full economic
impact of the COVID-19 pandemic is better understood, the Board
will consider the appropriate level. We will provide a further
update with the announcement of the Group's first quarter of 2020
results in May.
During the first few months of 2020, the Group's performance has
been consistent with, or slightly better than, its existing
guidance and strategic targets. Asset quality metrics have
continued to be very robust, and the Bank's capital adequacy
ratios, funding and liquidity positions have been strong, remaining
comfortably ahead of our minimum regulatory requirements.
Archil Gachechiladze , the Group CEO commented: "Georgia's
response to the evolving Coronavirus crisis has so far been
extremely successful, but these are unprecedentedly challenging
times and the country cannot be immune to the global economic
impact on many businesses, but particularly in the tourism and
tourism-related sectors. Our priority at Bank of Georgia is first
and foremost the health and well-being of our staff and customers,
and our BCP has been implemented to ensure that priority, together
with sustaining the long-term stability, strength and profitability
of the Group. We will monitor the impact of COVID-19 on an ongoing
basis, and adapt and manage our resources according to evolving
circumstances.
The Group is very well-positioned with strong capital, funding
and liquidity resources, and we aim to ensure that this remains the
case. We will also continue to work with the Government of Georgia
and the National Bank of Georgia to take the appropriate actions to
pro-actively manage this process."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Name of authorised official of issuer responsible for making
notification: Natia Kalandarishvili, Head of Investor Relations and
Funding
About Bank of Georgia Group PLC
Bank of Georgia Group PLC ("Bank of Georgia Group" or the
"Group" - LSE: BGEO LN) is a UK incorporated holding company, which
comprises: a) retail banking and payment services, b) corporate and
investment banking and wealth management operations and c) banking
operations in Belarus ("BNB"). JSC Bank of Georgia ("Bank of
Georgia", "BOG" or the "Bank"), the leading universal bank in
Georgia, is the core entity of the Group. The Group targets to
benefit from superior growth of the Georgian economy through both
its retail banking and corporate and investment banking services
and aims to deliver on its strategy, which is based on at least 20%
ROAE and c.15% growth of its loan book .
JSC Bank of Georgia has, as of
the date hereof, the following
credit ratings:
Fitch Ratings 'BB-/B'
Moody's 'Ba3/NP' (FC)
& 'Ba2/NP' (LC)
For further information, please visit www.bankofgeorgiagroup.com
or contact:
Archil Gachechiladze Michael Oliver Sulkhan Gvalia Natia Kalandarishvili
CEO Adviser to the CFO Head of Investor
CEO Relations
+995 322 444 444
+995 322 444 144 +44 203 178 4034 +995 322 444 108 (9282)
agachechiladze@bog.ge moliver@bgeo.com sgvalia@bog.ge ir@bog.ge
This news report is presented for general informational purposes
only and should not be construed as an offer to sell or the
solicitation of an offer to buy any securities
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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