plans to demerge banking and investment arms
This morning, BGEO Group announced that it plans to demerge its banking and investment businesses into two separately listed entities. The group also held a conference call, outlining the planned process. The demerger is subject to shareholder approval and is planned to be finalised in 1H18E. As we detail below, we believe there are both pros and cons to this development, as well as certain factors that we cannot pin down at this point. However, in principle, we believe the simpler, the better. Therefore, we would be generally positive on the increased granularity and simplicity of the structure. We rate BGEO group as a HOLD currently. The group trades at 9.3x P/E and 1.7x P/BV, on our estimates for 2017E.BGEO Group is a holding company. Together with its subsidiary, JSC Bank of Georgia (the Bank) and other subsidiaries, Co. makes up a group of companies that provide banking, insurance, real estate, utility, leasing, beverage production and distribution, brokerage and investment management services to corporate and individual customers. Co. has two operating segments: banking business, which comprises: retail banking and payment services, corporate investment banking and wealth management operations and banking operations in Belarus; and investment business, which comprises Co.'s stakes in Georgia Healthcare Group PLC, Georgia Global Utilities, m2 Real Estate, Aldagi and Teliani Valley.
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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