4Q16 results – in the shadow of spiking provisions
Bank of Georgia group (BGEO) has announced GEL 87m in net income for 4Q16, in line with our estimate of GEL 85m. FY16 net income came in at GEL 399m, lower than the Bloomberg full-year consensus of GEL 410m. Although the results were generally in line at the net income level at both the bank and group levels, the stock came off by 7-8% after the results were announced. We believe this was due to the high provisioning expenses that the bank booked in 4Q16 (GEL 70m, and with a 4.5% COR), which has created some ambiguity for its 2017E COR performance. Management said that it was due to its cautious approach, and the accounting impact of Lari depreciation, which inflated the Lari value of its hard currency-based NPLs. According to management, as long as the Lari remains stable, the COR should not deviate as much from its 2% through-the-cycle COR target.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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