Bank of Georgia Group PLC on Tuesday touted a positive outlook, as Georgia edges closer towards joining the EU and as the lender profited from the country’s burgeoning economy.

The Tbilisi-based bank said pretax profit in the third quarter of 2023 rose 32% to ₾421.7 million, around £128.5 million, from ₾318.3 million a year prior.

Net interest income climbed 42% to ₾420.0 million from ₾295.1 million.

The bank’s CET1 ratio as at September 30 was 18.5%, up from 14.8% a year ago. The CET1 ratio compares a bank’s capital against its risk assets, with a higher ratio being more financially sound.

Chief Executive Officer Archil Gachechiladze said: ‘The Georgian economy has maintained its growth momentum, underpinned by domestic consumption and investment spending. External sector inflows remained solid, supporting economic activity, which has returned to more normal levels following two unusually strong years of economic growth.’

Gachechiladze hailed the European Commission’s decision last week to recommend that the Council of the EU grant Georgia candidate status, a decision which is set to be made next month and a critical step towards EU membership. ‘I believe this will deepen the country‘s engagement with the EU and support the positive growth dynamics going forward. Against this macro backdrop, we remain well-positioned to continue to support our customers, and deliver strong growth and high profitability.’

Looking ahead, the company said Georgia’s real gross domestic product growth is expected to be 6.8% in 2023, helped by strong domestic spending and resilient external inflows. ‘Geopolitical instability in the region and tight global financial conditions contribute to downside risks to the outlook,’ it added.

Bank of Georgia shares were down 4.9% to 3,385.00 pence each on Tuesday morning in London.

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