UPDATE 1-Bank of Georgia profit climbs on higher lending amid strong economy


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(Adds CEO comments, background on economy)

Aug 16 (Reuters) – Bank of Georgia Group Plc on Thursday posted an 11.2 percent rise in first-half profit, boosted by higher lending amid stronger economic growth in the country.

The government’s ongoing reform plan to boost growth and the central bank’s monetary policy will continue to bolster the economy, the company said.

Georgia, a former Soviet republic that hosts pipelines carrying Caspian oil and gas to Europe, has been recovering from a decline in exports and a plunge in the currencies of its main trading partners, which had depressed economic growth in past years.

Bank of Georgia has more than a third of the market share of Georgian banks based on total assets, loans, deposits and shareholder equity.

“Business confidence remains strong, exports continue to grow rapidly and tourist inflows were at unparalleled levels during the first half,” said Chief Executive Officer Kaha Kiknavelidze.

The Tbilisi-based bank, which offers retail, corporate and investment banking, and wealth management, said profit rose to 257.8 million laris ($100.9 million), in the six months ended June 30, from 231.8 million laris a year earlier.

The lender, which was formed when BGEO Group demerged into two entities in May, said pre-tax profit for its banking division rose 27.8 percent to 231.2 million laris in the first half.

First-half revenue rose 17.8 percent to 489.3 million laris, while net interest margin fell to 7 percent from 7.3 percent year-on-year.

Retail Banking, which made up more than 70 percent of the total in terms of loans, saw a 29.5 percent rise in net loan book to 5.38 billion laris as of June 30.

Rival TBC Bank will report its first-half results next week.

($1 = 2.5550 laris)

Reporting by Noor Zainab Hussain and Muvija M in Bengaluru;
Editing by Amrutha Gayathri


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