Picture supply: Getty Photographs
The FTSE 100 will get a brand new financial institution inventory later this month, becoming a member of HSBC, Lloyds, Barclays, NatWest, and Commonplace Chartered within the UK’s premier index. That is the lender’s reward for its share value hovering an unimaginable 877% prior to now 5 years.
Dividends take the full return properly north of 1,000% over this era!
Let’s take a better take a look at this Footsie beginner to see whether or not it may be price contemplating shopping for.
A rocket on the London Inventory Change
The inventory in query is Lion Finance Group (LSE:BGEO), previously Financial institution of Georgia. It can enter the FTSE 100 in two weeks when the most recent modifications happen. Becoming a member of it is going to be on-line buying and selling platform IG Group, whereas airline easyJet and Hikma Prescribed drugs will drop out.
What has induced this unimaginable efficiency? Put merely, Lion Finance has benefitted from an extremely sturdy Georgian economic system.
Between 2021 and 2024, GDP development averaged over 9% yearly, pushed by monetary inflows, low inflation, increased consumption, an inflow of expert migrants fleeing the battle in Ukraine, rising tourism, and the nation’s location as a buying and selling/logistics hub between East and West.
The financial institution has taken full benefit of those fertile circumstances, with earnings rising at a five-year compound annual fee of about 50%. Dividends and share buybacks have been plentiful, attracting extra traders to the inventory.
The acquisition of Ameriabank (the main financial institution in neighbouring Armenia) in 2024 offered a second high-growth engine.
I offered too quickly
Alas, I beforehand owned this inventory however offered it in late 2024 when issues kicked off in Georgia after the contested election end result there. This noticed mass public protests collect throughout the nation amid accusations of vote-rigging. Issues appeared very dicey on the time.
With the nation’s ascension to the European Union on maintain, and the federal government dealing with worldwide scrutiny, I feared political unrest might result in decrease overseas direct funding and tourism. I personally postpone visiting Tbilisi on the time.
Nevertheless, whereas logical, my fears have been finally misplaced. Final 12 months, Georgia’s economic system grew by 7.5%. And whereas that did mark a slowdown from earlier years, Georgia stays one of many fastest-growing economies in Europe and the Caucasus, as does Armenia.
Lion Finance’s internet revenue in 2025 jumped 21% to GEL 2.2bn (roughly £600m), with an distinctive return on common fairness of 28.4%. Retail digital month-to-month energetic customers grew 15% in Georgia, reaching over 1.8m, up from simply 355,000 in 2019.
In the meantime, Ameriabank’s digital month-to-month energetic customers surged by 45.3% to 336,000, with standalone revenue rising 23.6%.
Worth on provide
Clearly, the financial institution has been firing on all cylinders in recent times. However is the inventory price contemplating because it enters the FTSE 100? I feel it’s, regardless of the aforementioned political dangers, which might flare up at any level between the pro-Russia and EU-aligned political factions.
The ahead price-to-earnings ratio is simply six, which is properly beneath the FTSE 100 common and different financial institution shares. Pair this with a really well-covered 3.5% dividend yield, and I see quite a lot of worth on provide right here.
Word, the Worldwide Financial Fund initiatives Georgian GDP development of 5% over the medium time period. Plus, Armenia gives quite a lot of long-term development in digital banking. At this time Ameriabank’s digital penetration is barely round 11% of the general inhabitants.
