MIDAS SHARING TIPS UPDATE: Keep the Bank of Georgia in mind

The East-meets-West Republic of Georgia can trace its history and culture back thousands of years.

But it has been occupied repeatedly over the centuries, including decades under Soviet rule.

The country declared independence in 1991 and has since been subjected to bouts of aggression from Russian President Vladimir Putin as he sought to regain all or part of the old Soviet empire.

However, peace has prevailed for the past fifteen years and most experts believe that this proud nation is no longer a priority for Russia’s warmongering leader.

This has led to a period of prosperity for Georgia, which reported economic growth of more than 10 percent in 2021 and 2022, with 7.5 percent growth expected for 2023 and several years of further gains predicted by economists.

Georgia is also a candidate to join the European Union, tilting its axis firmly to the West.

Bank of Georgia is the country’s largest bank and when Midas recommended the shares in 2013 they were priced at £17.70.

They have almost tripled to £50.20 and most of those gains have been made since Archil Gachechiladze took over as CEO in 2019.

At the time, staff morale was low, customer confidence was lacking and shares were at a low ebb.

Gachechiladze was also aware that challenger banks, with the latest technology, were making an advance on his company, which was mired in bureaucracy and outdated systems.

He embarked on a major makeover, drawing inspiration from some of the best digital banks in the world and investing in both IT and people to transform Bank of Georgia into a modern company.

The strategy was criticized at the time, but has paid off. The number of customers has more than doubled to 1.3 million, a third of the population, and the bank’s app is one of the most popular in Georgia, surpassed only by Facebook and Instagram.

Profits have also soared, more than doubling between 2018 and 2022, from £145m to £370m.

Results for 2023 will be announced this month and brokers expect another period of strong growth, with profits of around £475 million rising steadily thereafter.

Gachechiladze is also a dividend enthusiast, with £2.28 planned for 2023, rising to around £2.40 for this year.

At £50.20 for Bank of Georgia shares, this gives an attractive yield of 4.8 per cent.

The bank has just acquired Ameriabank, Armenia’s top bank, and expects to transfer its best ideas across the border, with the aim of achieving growth of between 20 and 25 percent per year from the new subsidiary for several years, with the Bank of Georgia itself with at least 10 percent per year.

Midas judgment: Georgia may seem far away, but the economy is growing, political conditions are relatively stable and consumers are optimistic.

Gachechiladze is benefiting from this favorable environment, but is also doing much more, with bold initiatives that can teach British banks a thing or two.

At £50.20, the Bank of Georgia has proven to be a worthwhile investment over the past decade, but there is more to come for new and existing shareholders.

Traded on: Main market Ticker: BGEO Contact: bankofgeorgiagroup.com or 020 3178 4052