Bank of Georgia - BGEO


Exposure to the fast growing Georgian economy!! And if that doesn’t do it for it check out there HQ architecture on :fire:

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When I was going through the :freetrade: universe, I noticed this company paid an incredibly high, almost 10% dividend yield.

What is more, it’s trading around £16 a share, so it’s not at its 52-week high, unlike a lot of the rest of the market, as we’re experiencing a bull market, with a number of companies reaching all-time highs.

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The market cap is £796.54m, and the company is part of the FTSE 250.

However, it’s in Georgia of course, which gave me pause.

Georgia’s geopolitical position is delicate. It’s bordered by Russia to the north, while Turkey, Armenia, and Azerbaijan are to the south. While it’s an ex-Soviet republic, but it has a strong trading relationship with the EU. The Transparency International gave the country a CPI (Corruption Perception Index) score of 58 out of 100 for 2018, which is higher than Greece (45), Hungary (46), and the same as Spain (the UK’s CPI is 80).

The real economy is growing fast. The IMF’s long-term growth forecast is 5.2% a year for the country.

So, it’s a promising, but also risky macro picture. Another thing on my mind was that Russia invaded this tiny country in 2008 during a five-day conflict. Elections are set for October, and it could prove to be yet another of these modern elections with a surprise outcome.

I’ve went to the Investor Relations website to find out more. The company itself consists of 1/ Georgia’s largest retail bank, 2/ an investment banking arm 3/ a wealth management arm, and 4/ a lender based in Belarus.

The return on average equity (ROAA) has been maintained above a 20% target, where it has been since 2016. The net interest margin has declined to 5.1%, but so has the bank’s cost of risk, which is an outcome of their improved lending to meet higher regulatory standards.

And the HQ is indeed of the brutalist-lit school! :fire:

Simply Wall Street’s assessment:

I invested £200. I plan to keep reading about this company, and invest with caution, and hopefully end up with a nice dividend and learnings that I will share.

Please remember to do your own research and that your investment can go up and down.


Bank of Georgia halting plans to pay a dividend:

This is a danger of dividend investing.

Always a risk as I see it, a dividend is a bonus for me as I only invest for capital growth.

May become an opportunity. If the cut in dividends brings a drop in shares prices, allowing to average down and increase yield over time :wink:

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