Contents

2Q26 and 1H26 consolidated unaudited results

Earnings call on 11 August 2026, 14:00 BST

Segmentation guide

CEO statement

Macroeconomic developments: Georgia

Macroeconomic developments: Armenia

2Q26 and 1H26 unaudited consolidated results

Business Division results

Georgian Financial Services (GFS)

Armenian Financial Services (AFS)

Other Businesses

Unaudited consolidated financial information

Non-financial information

Additional information

Principal risks and uncertainties

Statement of directors' responsibilities

Interim Condensed Consolidated Financial Statements

Glossary

Lion Finance Group PLC profile

Further information

Forward-looking statements

 

2Q26 and 1H26 consolidated unaudited results

Lion Finance Group PLC announces its unaudited consolidated financial results for the second quarter and first half of 2026 (2Q26 and 1H26). Unless otherwise noted, 2Q26 results are compared year-on-year with 2Q25 and quarter-on-quarter with 1Q26; 1H26 results are compared year-on-year with 1H25.

The results have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the United Kingdom and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, are unaudited and derived from management accounts.

Earnings call on 11 August 2026, 14:00 BST

https://zoom.us/webinar/register/WN_b53Fng5JQpCgH4DzOI8GeA  

Webinar ID: 972 5414 7641 | Passcode: 331608

Segmentation guide

The Group's results are presented by the following Business Divisions: 1) Georgian Financial Services (GFS), 2) Armenian Financial Services (AFS), and 3) Other Businesses.

•	GFS mainly comprises JSC Bank of Georgia and the investment bank JSC Galt and Taggart.
•	AFS includes Ameriabank CJSC.
•	Other Businesses includes JSC Belarusky Narodny Bank (BNB), which serves retail and SME clients in Belarus; JSC Digital Area, a digital ecosystem in Georgia including e-commerce, ticketing, and inventory management SaaS; Lion Finance Group PLC, the holding company; and other small entities and intragroup eliminations.

Customer franchise expansion across core markets drives continued growth momentum

•	Consolidated 2Q26 profit of GEL 618.8 million (+20.6% y-o-y) and 1H26 profit of GEL 1,203.8m (+17.3% y-o-y)
•	2Q26 dividend of GEL 3.05 per share, bringing 1H26 dividend to GEL 5.90 per share, up 15.7% y-o-y; with a further GEL 59.0m share buyback and cancellation programme.

Archil Gachechiladze, CEO of Lion Finance Group, said: "Our results for the first half reflect a business performing with a real momentum. In Georgia, although our franchise has already reached significant scale, customer engagement continues to deepen - Daily Active Users surpassed 1 million for the first time, up 20.0% year-on-year, with the loan book growing 17.1% y-o-y. In Armenia, we are growing well ahead of both the market and our own guidance, with the loan book up 36.8% year-on-year in constant currency, and Retail Digital MAU surging 47.0% year-on-year, as we scale the franchise and gain market share in one of the region's most dynamic economies."

Group performance highlights

•	A growing active customer base and larger balance sheet supported a 19.6% y-o-y increase in operating income before cost of risk to GEL 1,551.4m in 1H26, with profit up 17.3% y-o-y to GEL 1,203.8m and a half-year ROAE of 27.2%.
•	Bank of Georgia's Retail Digital MAU grew 13.3% y-o-y to 1,922.1 thousand individuals, while Retail Digital DAU surpassed 1 million for the first time, up 20.0% y-o-y, reflecting continued deepening of customer engagement across our Georgian franchise.
•	Ameriabank's Retail Digital MAU surged 47.0% y-o-y to 392.1 thousand individuals, while Retail Digital DAU grew 58.3% y-o-y to 174.2 thousand individuals, underscoring the accelerating momentum of our Armenian retail franchise.
•	The Group's loan book reached GEL 44,429.0m as at 30 June 2026, up 23.0% y-o-y in constant currency (cc). The growth was fuelled by loan book expansion across both the Georgian (GFS) and Armenian (AFS) operations, which recorded year-on-year cc increases of 17.1% and 36.8%, respectively.
•	Client deposits and notes totalled GEL 43,664.8m as at 30 June 2026, reflecting a 26.8% y-o-y increase in cc. GFS deposits rose by 24.2% y-o-y, partly elevated by Ministry of Finance deposits; excluding these, growth stood at 18.4% y-o-y, driven by continued strong growth across the board. AFS deposits grew by 37.1% y-o-y, with broad-based growth across both retail and corporate segments.
•	The Group maintained healthy asset quality, with the cost of credit risk ratio at 0.6% in 2Q26 (0.5% in 2Q25) and 0.5% in 1H26 (0.4% in 1H25), while the NPL ratio stood at 2.1% as at 30 June 2026 (1.9% as at 30 June 2025).
•	Net operating income was up 19.5% y-o-y to GEL 1,241.6m in 2Q26 and up 17.3% y-o-y to GEL 2,366.5m in 1H26. The annual top-line growth was primarily driven by net interest income generated by both GFS and AFS, complemented by net fee and commission income generation across both operations.
•	Group NIM reached 6.3% in both 2Q26 and 1H26, expanding 20 bps and 30 bps y-o-y respectively, with the improvement driven by a strong NIM performance at GFS - where margins widened by 40 bps y-o-y in both periods to reach 6.4% in 2Q26. On a q-o-q basis, GFS's NIM was up 10 bps, while that of AFS held steady at 6.0%.
•	The Group's operating expenses increased by 12.8% y-o-y to GEL 426.7m in 2Q26 and by 13.2% y-o-y to GEL 816.1m in 1H26. The y-o-y growth was driven primarily by GFS, which saw expenses rise by 13.9% y-o-y in 2Q26 and 15.2% y-o-y in 1H26, mainly driven by higher staff costs and administrative costs (see details on page 9).
•	The effective tax rate, which stood at 17.6% in 2Q26 for the Group, was impacted by an additional tax charge attributable to dividends received from Ameriabank; excluding this item, the normalised effective tax rate would have been 16.5%, broadly in line with the prior quarter.
•	Capital adequacy and liquidity positions for both Bank of Georgia and Ameriabank remained comfortably above the minimum regulatory requirements (for details, see pages 10 and 13).

 

 

CEO statement

The Group delivered another set of strong results in the second quarter and first half of 2026, with profit of GEL 618.8m, up 20.6% year-on-year for the second quarter, and GEL 1,203.8m for the first half, an increase of 17.3% year-on-year, with a return on average equity of 27.1% for 2Q26 and 27.2% for the half year. Our book value per share grew 24.8% year-on-year to GEL 220.69, and the Group loan book expanded 23.0% year-on-year in constant currency, underpinned by the deepening customer relationships and digital engagement that define our franchises in both markets.

In Georgia, although our franchise has already reached significant scale, it continues to deepen. Over one million customers now open our app every single day, up 20.0% year-on-year, and 73% of retail products are sold through digital channels. When customers are this close to us, the relationship compounds: we know them better, we lend more confidently, and we earn their deposits. The result is a loan book growth of 17.1% year-on-year in constant currency, delivered alongside a strong loan yield and healthy asset quality.

In Armenia, Ameriabank is scaling rapidly. 75.2% of our monthly active customers are now digitally engaged, up nearly 10 percentage points year-on-year, with Retail Digital Monthly Active Users surging 47.0% year-on-year to over 392 thousand individuals. Market share gains continued across both loans and deposits, and the loan book grew approximately 36.8% year-on-year in constant currency, well ahead of our target for Armenia.

Together, these two franchises are delivering loan book growth of 23.0% year-on-year at the Group level (in constant currency), well ahead of our c.15% blended target, with the cost of credit risk remaining healthy throughout - a combination that reflects both the quality of what we have built and the discipline with which we are growing it.

Reflecting our continued financial strength and commitment to delivering value to shareholders, the Board has today declared a quarterly dividend of GEL 3.05 per share in respect of 2Q26, bringing the cumulative 1H26 dividend to GEL 5.90 per share - up 15.7% year-on-year. The Board has also approved a further GEL 59.0m share buyback and cancellation programme.

Georgia and Armenia remain among the broader region's fastest-growing and most prudently managed economies - resilient, underpinned by strong macroeconomic fundamentals, and increasingly well-connected as the Middle Corridor gains strategic relevance. We have revised our full-year 2026 real GDP growth forecast for Georgia upward to 7.5%, reflecting stronger-than-expected performance in the first half of the year; in Armenia, we anticipate a stronger second half and forecast full-year growth of 5.5%. Both economies have demonstrated resilience to the recent escalation in the Middle East, thanks to their limited direct exposure to the region and well-diversified sources of external inflows. Financial deepening is ongoing, income convergence with Central and Eastern European peers continues, and the large-scale infrastructure investment pipeline in both countries reinforces a medium-term growth trajectory that extends well beyond near-term forecasts. Our established presence and market-leading franchises in both markets place us in an excellent position to benefit.

I want to thank our employees across different countries for their dedication to the success of our customers and, by extension, the success of the entire Group.

 

Archil Gachechiladze                                                                                                      

CEO, Lion Finance Group PLC

10 August 2026

 

 

 

 

 

 

 

Our key targets for the medium term remain:

•	c.15% annual growth of the Group's loan book.
•	20%+ return on average equity.
•	30-50% payout ratio (dividends and share buyback and cancellation programme).

Macroeconomic developments: Georgia

Sustained economic growth momentum

Georgia's economy maintained strong growth momentum in the first half of 2026, with real GDP expanding by 7.9% y-o-y, according to preliminary data, driven mainly by services and manufacturing. Reflecting stronger-than-expected first-half performance, we have revised our full-year real GDP growth forecast upward from 7.0% to 7.5%. The outlook is supported by sustained household consumption, resilient external inflows, and an expected rebound in public capital spending.

Ongoing tensions in the Middle East continue to pose downside risks, primarily through higher energy prices. However, the impact on Georgia's economic activity has been limited, reflecting low direct exposure to the region and diversified sources of external inflows. Moreover, Georgia's ample macroeconomic policy buffers enhance the economy's resilience to potential shocks.

Strong external flows

External inflows remained solid in 2Q26. The trade deficit continued to narrow as merchandise exports increased by 17.1% y-o-y, while imports rose only by 5.4% y-o-y. During the same period, international tourism revenues declined modestly by 3.8% y-o-y, with weaker inflows from the Middle East and South Asia partially offset by higher arrivals from the EU and neighbouring countries. Inbound money transfers also remained strong, rising by 8.4% y-o-y, with the largest contributions from the EU, the US, Russia, and Israel.

Appreciating GEL and record-high international reserves

In the first seven months of 2026, the Georgian Lari (GEL) appreciated by 2.5% against the US dollar. During the same period, it gained 5.0% against the Euro and 3.4% against the Pound Sterling. The appreciation of the Georgian Lari was underpinned by strong external inflows, continued deposit de-dollarisation, and rising non-resident holdings of Georgian government securities.

The National Bank of Georgia (NBG) stepped up its foreign currency purchases in mid-2026, lifting international reserves to a record high of USD 7.5 billion at the end of July 2026 (up 50.0% y-o-y). We expect the GEL to remain broadly stable in the medium term, supported by sound macroeconomic fundamentals and prudent policies.

Elevated inflation and moderately tight monetary policy

Inflation remained elevated in 2Q26, primarily driven by higher food and fuel prices. Headline CPI inflation rose to 5.8% y-o-y in June 2026, from 4.3% in March. Meanwhile, core inflation remained lower, indicating that underlying price pressures were more contained. We expect headline inflation to average 5.1% in 2026, remaining above the NBG's 3% target before returning to target next year.

The NBG raised its refinancing rate by 25 bps to 8.25% in May and has kept it unchanged since then. We expect the central bank to maintain a moderately tight monetary policy stance throughout 2026 to ensure that inflation expectations remain well anchored.

Strong fiscal discipline

Georgia's fiscal position remains strong, supported by sustained economic activity. In 2025, the fiscal deficit narrowed to 1.4% of GDP, reflecting stronger-than-expected economic growth and lower-than-planned capital expenditure. The fiscal deficit is budgeted at 2.0% of GDP in 2026, remaining consistent with fiscal sustainability. The government plans to reduce the debt-to-GDP ratio further from 34.4% at end-2025 to 33.0% by end-2026. The successful syndicated issuance of a GEL 400 million government bond in May underscored strong investor confidence in the country's macroeconomic stability and policy framework.

Healthy bank lending

The banking sector continues to demonstrate sound fundamentals, high liquidity, and strong capitalisation. Lending remained broadly in line with nominal economic activity, expanding by 14.5% y-o-y in 2Q26 on a cc basis, following growth of 14.9% in the previous quarter. Business and consumer lending continued to drive credit expansion. Loan dollarisation fell to 41.6% at end-June 2026, a 0.4pp decline quarter-on-quarter. Deposit dollarisation also declined further by 2.7pp over the same period to 43.8%.

 

 

More information on the Georgian economy and financial sector can be found at Galt & Taggart, the Group's investment banking and brokerage subsidiary.

 

Macroeconomic developments: Armenia

Sustained economic growth

The Armenian economy expanded by 4.0% y-o-y in 1Q26, reflecting a high base effect in financial services and some moderation in domestic activity ahead of the June parliamentary elections. Given the slightly weaker-than-expected first-quarter performance and the impact of Russia's import restrictions on selected Armenian agricultural products, imposed in stages since late May, we have revised our full-year 2026 real GDP growth forecast to 5.5% from 6.0%. Economic activity is expected to be supported by continued growth in services, ongoing fiscal stimulus, and the planned launch of a new gold mine this year, which should boost industrial output. The June Parliamentary elections reaffirmed the incumbent government's mandate, supporting broad policy continuity, including closer relations with the West.

The impact of Russia's import restrictions on Armenian agricultural products is expected to be partially offset by proposed trade liberalisation with the EU and targeted government support measures. The Armenian government has reaffirmed its commitment to maintaining economic cooperation with Russia and continued participation in the Eurasian Economic Union. Ongoing tensions in the Middle East pose additional downside risks. Nevertheless, their impact on Armenia's economy has remained limited, reflecting the country's low direct exposure to the region and diversified source of external inflows.

Overall, prudent macroeconomic management and broad policy continuity underpin Armenia's economic resilience. The medium-term growth outlook also carries significant upside potential from the historic 2025 peace accord with Azerbaijan and the normalisation of relations with Türkiye.

Resilient external inflows and strong Dram

Following the previous surge in re-exports of precious metals and stones, Armenia's external trade continued to normalise, with goods exports declining by 18.3% y-o-y and imports growing by 2.2% y-o-y in 2Q26. Russia's import restrictions on selected Armenian agricultural products also weighed on June exports. Other external inflows remained resilient, supported by strong growth in non-commercial money transfers (up 19.9% y-o-y) and international tourist arrivals (up 13.1% y-o-y).

Supported by these inflows and prudent macroeconomic policies, the Armenian Dram (AMD) appreciated by 4.0% against the US dollar in the first seven months of 2026. Over the same period, it gained 1.5% against the GEL. The Central Bank of Armenia (CBA) continued its foreign exchange purchases, increasing gross international reserves to a record high of USD 6.2 billion at end-July 2026 (up 52.1% y-o-y).

Elevated inflation and neutral monetary stance

Inflation remained elevated in 2Q26, driven mainly by higher food prices. Headline CPI reached 5.1% y-o-y in June 2026, up from 4.5% in March. Importantly, inflation expectations appear to remain well anchored, as reflected in lower inflation for non-food goods and services. The CBA has kept its policy rate unchanged at 6.5% since the beginning of the year and is expected to maintain this rate through 2026, reflecting a broadly neutral monetary policy stance.

Continued fiscal expansion

Fiscal policy is set to remain growth-supportive in 2026, with the deficit planned to widen to 4.0% of GDP from 3.7% in 2025. Despite higher public spending, strong tax revenue growth is expected to limit the increase in government debt to 48.7% of GDP by end-2026, up from 47.2% at end-2025. The country's IMF Stand-By Arrangement continues to provide an important anchor for fiscal discipline.

Sound banking sector

The Armenian banking sector remains sound, with strong capital and liquidity buffers. Bank lending grew by an estimated 22.1% y-o-y in 2Q26 on a cc basis, following a 21.1% growth in the previous quarter. Consumer and business lending were the primary drivers of credit expansion. Loan dollarisation in Armenia increased to 36.1% at end-June 2026 from 35.0% the previous quarter, largely driven by legal entity loans. Meanwhile, deposit dollarisation continued to decrease, reaching 42.3%, down 1.1pp q-o-q.

2Q26 and 1H26 unaudited consolidated results*

 

GEL thousands	1H26	1H26	1H26	1H26		1H25	1H25	1H25	1H25
INCOME STATEMENT HIGHLIGHTS	Group	GFS	AFS	Other		Group	GFS	AFS	Other
Interest income	3,026,585	2,136,031	816,131	74,423		2,536,548	1,859,625	624,307	52,616
Interest expense	(1,317,768)	(940,471)	(336,417)	(40,880)		(1,114,707)	(847,328)	(236,486)	(30,893)
Net interest income	1,708,817	1,195,560	479,714	33,543		1,421,841	1,012,297	387,821	21,723
Net fee and commission income	382,513	312,839	63,065	6,609		302,133	250,466	44,392	7,275
Net foreign currency gain	296,377	163,379	78,593	54,405		298,191	174,051	71,870	52,270
Regulatory-related expenses	(37,590)	(26,906)	(7,181)	(3,503)		(31,600)	(24,835)	(5,400)	(1,365)
Other expenses	(4,408)	-	(4,408)	-		(3,144)	-	(3,144)	-
Net other income	20,772	6,583	6,205	7,984		29,362	21,965	3,530	3,867
Net operating income	2,366,481	1,651,455	615,988	99,038		2,016,783	1,433,944	499,069	83,770
Salaries and other employee benefits	(513,687)	(290,077)	(187,852)	(35,758)		(453,104)	(245,938)	(177,372)	(29,794)
Administrative expenses	(172,765)	(118,217)	(31,048)	(23,500)		(155,328)	(104,197)	(34,086)	(17,045)
Depreciation, amortisation and impairment	(123,884)	(76,359)	(32,804)	(14,721)		(105,260)	(69,398)	(29,958)	(5,904)
Other operating expenses	(5,754)	(2,899)	(2,146)	(709)		(6,994)	(3,707)	(2,612)	(675)
Operating expenses	(816,090)	(487,552)	(253,850)	(74,688)		(720,686)	(423,240)	(244,028)	(53,418)
Profit from associates	990	990	-	-		736	736	-	-
Operating income before cost of risk	1,551,381	1,164,893	362,138	24,350		1,296,833	1,011,440	255,041	30,352
Cost of risk	(103,300)	(74,067)	(26,639)	(2,594)		(77,709)	(63,838)	(13,940)	69
Profit before income tax expense	1,448,081	1,090,826	335,499	21,756		1,219,124	947,602	241,101	30,421
Income tax expense	(244,288)	(165,755)	(63,026)	(15,507)		(192,813)	(132,683)	(49,796)	(10,334)
Profit	1,203,793	925,071	272,473	6,249		1,026,311	814,919	191,305	20,087

 

GEL thousands	2Q26	2Q25	Change y-o-y	1Q26	Change q-o-q		1H26		1H25		Change y-o-y
INCOME STATEMENT HIGHLIGHTS
Net interest income	886,203	727,480	21.8%	822,614	7.7%		1,708,817		1,421,841			20.2%
Net fee and commission income	199,871	158,305	26.3%	182,642	9.4%		382,513		302,133			26.6%
Net foreign currency gain	166,253	152,597	8.9%	130,124	27.8%		296,377		298,191			-0.6%
Net other income	(19,219)	(16,172)	18.8%	(18,371)	4.6%		(37,590)		(31,600)			19.0%
Regulatory-related expenses	(2,334)	(1,722)	35.5%	(2,074)	12.5%		(4,408)		(3,144)			40.2%
Other expenses	10,794	18,077	-40.3%	9,978	8.2%		20,772		29,362			-29.3%
Net operating income	1,241,568	1,038,565	19.5%	1,124,913	10.4%		2,366,481		2,016,783			17.3%
Operating expenses	(426,654)	(378,227)	12.8%	(389,436)	9.6%		(816,090)		(720,686)			13.2%
Profit from associates	604	465	29.9%	386	56.5%		990		736			34.5%
Operating income before cost of risk	815,518	660,803	23.4%	735,863	10.8%		1,551,381		1,296,833			19.6%
Cost of risk	(64,460)	(50,796)	26.9%	(38,840)	66.0%		(103,300)		(77,709)			32.9%
Profit before income tax expense and one-off items	751,058	610,007	23.1%	697,023	7.8%		1,448,081		1,219,124			18.8%
Income tax expense	(132,253)	(96,760)	36.7%	(112,035)	18.0%		(244,288)		(192,813)			26.7%
Profit	618,805	513,247	20.6%	584,988	5.8%		1,203,793		1,026,311			17.3%
Basic earnings per share	14.52	11.89	22.1%	13.72	5.8%		28.24		23.70			19.2%
Diluted earnings per share	14.39	11.75	22.5%	13.61	5.7%		27.98		23.44			19.4%

 

BALANCE SHEET HIGHLIGHTS	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Liquid assets	18,881,978	16,333,288	15.6%	16,530,688	14.2%
Cash and cash equivalents	5,046,754	4,022,221	25.5%	3,440,364	46.7%
Amounts due from credit institutions	3,777,016	3,194,606	18.2%	3,764,046	0.3%
Investment securities	10,058,208	9,116,461	10.3%	9,326,278	7.8%
Loans to customers, finance lease and factoring receivables	44,429,043	36,530,447	21.6%	41,881,946	6.1%
Property and equipment	622,402	578,502	7.6%	616,135	1.0%
All remaining assets	1,887,116	1,649,833	14.4%	1,953,033	-3.4%
Total assets	65,820,539	55,092,070	19.5%	60,981,802	7.9%
Client deposits and notes	43,664,753	34,789,736	25.5%	39,699,016	10.0%
Amounts owed to credit institutions	7,372,045	8,927,118	-17.4%	7,722,100	-4.5%
Borrowings from DFIs	3,806,066	2,918,362	30.4%	3,545,490	7.3%
Short-term loans from the National Bank of Georgia	51,302	2,552,236	-98.0%	1,130,502	-95.5%
Short-term loans from the Central Bank of Armenia	117,552	142,743	-17.6%	135,054	-13.0%
Loans and deposits from commercial banks	3,397,125	3,313,777	2.5%	2,911,054	16.7%
Debt securities issued	4,176,271	2,445,652	70.8%	3,298,758	26.6%
All remaining liabilities	1,215,542	1,310,432	-7.2%	1,392,258	-12.7%
Total liabilities	56,428,611	47,472,938	18.9%	52,112,132	8.3%
Total equity	9,391,928	7,619,132	23.3%	8,869,670	5.9%
Book value per share	220.69	176.81	24.8%	207.82	6.2%

 

KEY RATIOS	2Q26	2Q25		1Q26		1H26	1H25
ROAA	3.9%	3.8%		3.9%		3.9%	3.9%
ROAE	27.1%	27.2%		27.4%		27.2%	27.9%
Net interest margin	6.3%	6.1%		6.2%		6.3%	6.0%
Loan yield[1]	12.3%	12.3%		12.3%		12.3%	12.3%
Liquid assets yield	5.1%	5.0%		5.2%		5.2%	5.0%
Cost of funds	5.1%	5.0%		5.1%		5.1%	5.0%
Cost of client deposits and notes	4.4%	4.2%		4.5%		4.5%	4.1%
Cost of amounts owed to credit institutions	6.9%	7.4%		6.7%		6.7%	7.6%
Cost of debt securities issued	8.2%	7.4%		8.2%		8.2%	7.5%
Cost:income ratio	34.4%	36.4%		34.6%		34.5%	35.7%
NPLs to gross loans	2.1%	1.9%		2.1%		2.1%	1.9%
NPL coverage ratio	58.4%	63.5%		58.9%		58.4%	63.5%
NPL coverage ratio adjusted for the discounted value of collateral	119.2%	119.2%		117.2%		119.2%	119.2%
Cost of credit risk ratio	0.6%	0.5%		0.3%		0.5%	0.4%

 

GEL thousands NON-PERFORMING LOANS	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Group (consolidated)
NPLs to gross loans	2.1%	1.9%		2.1%
NPL coverage ratio	58.4%	63.5%		58.9%
NPL coverage ratio adjusted for the discounted value of collateral	119.2%	119.2%		117.2%
Georgian Financial Services (GFS)
NPLs to gross loans	2.1%	2.2%		2.0%
NPL coverage ratio	53.9%	61.7%		56.1%
NPL coverage ratio adjusted for the discounted value of collateral	117.2%	113.6%		116.0%
Armenian Financial Services (AFS)
NPLs to gross loans	2.0%	1.2%		2.0%
NPL coverage ratio	64.7%	69.6%		62.7%
NPL coverage ratio adjusted for the discounted value of collateral	123.9%	147.0%		120.8%

* To improve the quality and understandability of its interim condensed consolidated financial statements, the Group has reviewed and revised the presentation of certain line items in its condensed consolidated interim financial statements. Changes to the Consolidated Income Statement have been made to better present the nature of certain charges and align more with the industry practice. The changes related to presentation of deposit insurance fee (from previously presented within net interest income to currently presented within regulatory-related expenses), certain repair and maintenance costs (from previously presented within net fee and commission income to currently presented within administrative expenses), resolution fund contributions (from previously presented within other operating expenses to currently presented within regulatory-related expenses), and core banking expenses (from previously presented within other administrative expenses to currently presented within other expenses). Comparative amounts have been reclassified in line with the revised presentation. Management believes that these reclassifications provide more reliable and relevant information. For the full details of all reclassifications, including changes to the Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows, see Note 3 in the interim condensed consolidated financial statements.

Returns to shareholders (dividends and share buyback and cancellation programme)

•	In August 2025, the Board took the decision to move to a quarterly distribution schedule, with the Group's total capital repatriation policy unchanged at a target payout range of 30-50% of annual Group profits. Considering the strong performance of the Group during the second quarter of 2026 and solid capital levels, today the Board declared an interim dividend of GEL 3.05 per ordinary share in respect of the second quarter of 2026, payable according to the following timetable:
	•	Ex-Dividend Date: 10 September 2026
	•	Record Date: 11 September 2026
	•	Currency Conversion Date: 11 September 2026
	•	Payment Date: 25 September 2026
•	The NBG's Lari/Pound Sterling average exchange rate for the period of 7 September to 11 September 2026 will be used as the exchange rate on the Currency Conversion Date and will be announced in due course.
•	In addition, today the Board has approved an extension to the share buyback and cancellation programme of GEL 59.0 million.
•	The previous GEL 55.0 million share buyback and cancellation programme, announced on 7 May 2026, has been completed. As a result, the total number of voting rights in issue following the cancellation of shares was 43,086,035 as at 23 July 2026.

 

 

Business Division results

The Group results are presented by the following Business Divisions: 1) Georgian Financial Services (GFS), 2) Armenian Financial Services (AFS), and 3) Other Businesses.

Georgian Financial Services (GFS)

Georgian Financial Services (GFS) mainly comprises JSC Bank of Georgia and the investment bank JSC Galt and Taggart. GFS is organised across the following business segments: Retail Banking (RB), Small and Medium Enterprise (SME) Banking, Corporate and Investment Banking (CIB), and Corporate Center (CC).

GEL thousands	2Q26	2Q25	Changey-o-y	1Q26	Change q-o-q		1H26	1H25	Change y-o-y
INCOME STATEMENT HIGHLIGHTS
Interest income	1,093,652	952,366	14.8%	1,042,379	4.9%		2,136,031	1,859,625	14.9%
Interest expense	(477,001)	(429,873)	11.0%	(463,470)	2.9%		(940,471)	(847,328)	11.0%
Net interest income	616,651	522,493	18.0%	578,909	6.5%		1,195,560	1,012,297	18.1%
Net fee and commission income	163,387	130,755	25.0%	149,452	9.3%		312,839	250,466	24.9%
Net foreign currency gain	87,425	91,321	-4.3%	75,954	15.1%		163,379	174,051	-6.1%
Regulatory-related expenses	(13,931)	(12,403)	12.3%	(12,975)	7.4%		(26,906)	(24,835)	8.3%
Net other income	3,805	14,990	-74.6%	2,778	37.0%		6,583	21,965	-70.0%
Net operating income	857,337	747,156	14.7%	794,118	8.0%		1,651,455	1,433,944	15.2%
Salaries and other employee benefits	(149,185)	(132,342)	12.7%	(140,892)	5.9%		(290,077)	(245,938)	17.9%
Administrative expenses	(66,121)	(55,194)	19.8%	(52,096)	26.9%		(118,217)	(104,197)	13.5%
Depreciation, amortisation and impairment	(39,411)	(35,610)	10.7%	(36,948)	6.7%		(76,359)	(69,398)	10.0%
Other operating expenses	(1,726)	(1,950)	-11.5%	(1,173)	47.1%		(2,899)	(3,707)	-21.8%
Operating expenses	(256,443)	(225,096)	13.9%	(231,109)	11.0%		(487,552)	(423,240)	15.2%
Profit from associates	604	465	29.9%	386	56.5%		990	736	34.5%
Operating income before cost of risk	601,498	522,525	15.1%	563,395	6.8%		1,164,893	1,011,440	15.2%
Cost of risk	(41,801)	(45,848)	-8.8%	(32,266)	29.6%		(74,067)	(63,838)	16.0%
Profit before income tax expense	559,697	476,677	17.4%	531,129	5.4%		1,090,826	947,602	15.1%
Income tax expense	(86,677)	(66,827)	29.7%	(79,078)	9.6%		(165,755)	(132,683)	24.9%
Profit	473,020	409,850	15.4%	452,051	4.6%		925,071	814,919	13.5%

 

BALANCE SHEET HIGHLIGHTS		Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Cash and cash equivalents	3,324,782		2,108,736	57.7%	2,065,638	61.0%
Amounts due from credit institutions	1,767,646		2,339,536	-24.4%	1,881,992	-6.1%
Investment securities	8,454,030		7,527,941	12.3%	7,674,184	10.2%
Loans to customers, finance lease and factoring receivables	29,164,019		25,306,909	15.2%	28,261,957	3.2%
Loans to customers, finance lease and factoring receivables, LC	16,858,351		14,594,431	15.5%	16,276,415	3.6%
Loans to customers, finance lease and factoring receivables, FC	12,305,668		10,712,478	14.9%	11,985,542	2.7%
Property and equipment	522,079		482,933	8.1%	519,438	0.5%
All remaining assets	1,266,464		1,185,218	6.9%	1,257,904	0.7%
Total assets	44,499,020		38,951,273	14.2%	41,661,113	6.8%
Client deposits and notes	30,553,106		24,979,831	22.3%	27,942,563	9.3%
Client deposits and notes, LC	17,739,423		12,650,370	40.2%	15,178,604	16.9%
Client deposits and notes, FC	12,813,683		12,329,461	3.9%	12,763,959	0.4%
Amounts owed to credit institutions	4,157,132		6,512,756	-36.2%	5,025,118	-17.3%
Debt securities issued	2,687,773		1,261,544	113.1%	1,915,124	40.3%
All remaining liabilities	647,503		898,001	-27.9%	791,016	-18.1%
Total liabilities	38,045,514		33,652,132	13.1%	35,673,821	6.6%
Total equity	6,453,506		5,299,141	21.8%	5,987,292	7.8%
Risk-weighted assets (JSC Bank of Georgia standalone)	33,545,361		30,619,266	9.6%	32,923,955	1.9%

 

KEY RATIOS	2Q26	2Q25		1Q26		1H26	1H25
ROAA	4.4%	4.2%		4.4%		4.4%	4.3%
ROAE	30.4%	31.1%		31.5%		30.9%	31.6%
Net interest margin	6.4%	6.0%		6.3%		6.3%	5.9%
Loan yield	12.8%	12.7%		12.7%		12.8%	12.6%
Loan yield, GEL	15.5%	15.2%		15.5%		15.5%	15.1%
Loan yield, FC	9.1%	9.2%		8.9%		9.0%	9.2%
Cost of funds	5.3%	5.2%		5.3%		5.3%	5.2%
Cost of client deposits and notes	4.7%	4.4%		4.7%		4.7%	4.3%
Cost of client deposits and notes, GEL	7.5%	7.8%		7.6%		7.5%	7.7%
Cost of client deposits and notes, FC	1.1%	1.3%		1.2%		1.2%	1.3%
Cost of time deposits	7.2%	6.7%		6.9%		7.0%	6.6%
Cost of time deposits, GEL	9.7%	10.0%		9.8%		9.7%	10.1%
Cost of time deposits, FC	2.3%	2.5%		2.3%		2.3%	2.5%
Cost of current accounts and demand deposits	2.4%	2.3%		2.9%		2.6%	2.3%
Cost of current accounts and demand deposits, GEL	4.6%	5.0%		5.3%		5.0%	4.9%
Cost of current accounts and demand deposits, FC	0.5%	0.4%		0.5%		0.5%	0.5%
Cost:income ratio	29.9%	30.1%		29.1%		29.5%	29.5%
Cost of credit risk ratio	0.5%	0.7%		0.4%		0.5%	0.4%

Performance highlights

•	GFS net operating income grew by 14.7% y-o-y in 2Q26 and 15.2% y-o-y in 1H26, driven in both periods by strong net interest income generation complemented by net fee and commission income. Q-o-q, net operating income was up 8.0%, with net interest income as the primary driver, supported by solid contributions from net fee and commission income and net foreign currency gains.
•	Net interest income grew by 18.0% y-o-y in 2Q26, with NIM expanding by 40 bps y-o-y to 6.4%, driven by a higher loan yield and increased share of loans in interest-earning assets mix. On a half-year basis, net interest income was up 18.1% y-o-y, with NIM reaching 6.3%, reflecting a 40-bps y-o-y expansion on the same drivers.
•	Net fee and commission income grew by 25.0% y-o-y in 2Q26 and 24.9% y-o-y in 1H26, partly reflecting a lower comparative base prior to the renegotiation of terms with international payment systems; normalised net fee and commission income was up 22.3% y-o-y in 2Q26, mainly driven by settlement operations.
•	Net foreign currency gains declined by 4.3% y-o-y in 2Q26 and 6.1% y-o-y in 1H26, reflecting a more stable currency rate as well as increased market competition.
•	Operating expenses increased by 13.9% y-o-y in 2Q26 and 15.2% y-o-y in 1H26, driven in both periods by higher staff costs, mainly reflecting increased salary rates, as well as higher administrative expenses. On a q-o-q basis, operating expenses grew by 11.0%, mainly driven by higher administrative expenses on the back of elevated marketing and Investor Relations activities in the quarter.
•	Portfolio quality remained healthy. The cost of credit risk ratio stood at 0.5% in both 2Q26 and 1H26, compared with 0.7% and 0.4% in 2Q25 and 1H25, respectively, and 0.4% in 1Q26. Segmental cost of risk was affected by methodological changes, reflecting continued enhancements to our risk modelling. Excluding this effect, the increase in Retail cost of risk was in line with normalisation trends, supported by a growing share of unsecured consumer loans within the portfolio, with underlying default trends remaining stable. Overall risk parameters remained robust, with cost of risk still below the normalised range. The NPL ratio remained broadly stable and stood at 2.1% as at 30 June 2026.

Portfolio highlights

		Portfolio highlights: loans to customers, finance lease and factoring receivables
		Jun-26	Jun-25		Change y-o-y	Change y-o-y (constant currency)		Mar-26			Change q-o-q		Change q-o-q (constant currency)
Total GFS		29,164,019	25,306,909		15.2%	17.1%		28,261,957			3.2%		4.2%
Retail		13,241,289	11,028,623		20.1%	20.8%		12,678,797			4.4%		4.8%
Mortgages		5,486,515	4,754,810		15.4%	16.6%		5,288,406			3.7%		4.4%
Consumer loans		6,772,241	5,517,428		22.7%	23.0%		6,472,542			4.6%		4.8%
Other loans		982,533	756,385		29.9%	30.5%		917,849			7.0%		7.0%
SME		5,661,126	5,227,172		8.3%	10.1%		5,511,393			2.7%		3.7%
CIB		10,261,604	9,051,114		13.4%	16.5%		10,071,767			1.9%		3.7%
		Portfolio highlights: customer deposits and notes
		Jun-26		Jun-25	Change y-o-y		Change y-o-y (constant currency)		Mar-26		Change q-o-q		Change q-o-q (constant currency)
Total GFS		30,553,106		24,979,831	22.3%		24.2%		27,942,563		9.3%		10.5%
Retail		17,225,211		15,169,685	13.6%		15.9%		16,543,701		4.1%		5.5%
SME		2,530,747		2,231,309	13.4%		14.8%		2,402,216		5.4%		6.1%
CIB		7,809,469		6,278,743	24.4%		25.7%		7,963,850		-1.9%		-1.4%
Corporate Center		3,082,547		1,374,967	124.2%				1,118,524		175.6%
Eliminations		(94,868)		(74,873)	26.7%				(85,728)		10.7%
		Loan portfolio quality: cost of credit risk ratio
		2Q26		2Q25			1Q26					1H26		1H25
Total GFS		0.5%		0.7%			0.4%					0.5%		0.4%
Retail		1.3%		0.8%			0.8%					1.0%		0.5%
SME		0.1%		1.1%			0.6%					0.4%		0.7%
CIB		-0.2%		0.6%			-0.3%					-0.2%		0.4%
		Loan portfolio quality: NPL ratio
		Jun-26		Jun-25			Mar-26
Total GFS		2.1%		2.2%			2.0%
Retail		1.3%		1.5%			1.3%
SME		4.2%		3.6%			4.2%
CIB		2.0%		2.1%			1.7%
•	Customer lending growth remained strong, driven primarily by Retail Banking and Corporate and Investment Banking, with Small and Medium Enterprise also contributing.
	•	Within the Retail Banking segment, consumer lending showed strong growth, rising by 23.0% y-o-y and 4.8% q-o-q in cc. Mortgage lending grew by 16.6% y-o-y and 4.4% q-o-q in cc, now accounting for 41.4% of the retail loan book - below the share of consumer loans at 51.1%. Robust lending expansion has been underpinned by increasing active customer base, as well as strong household disposable income growth, which has averaged 11% over the past two years.
•	Client deposits and notes grew strongly across all segments. The y-o-y growth was also elevated by a significant increase in the Ministry of Finance deposits within the Corporate Center; excluding the Ministry of Finance deposits, client deposits grew by 18.4% y-o-y and 3.5% q-o-q in cc. As at 30 June 2026, current & demand deposits accounted for 50.5%, and time deposits accounted for 49.5% of the total deposit portfolio, respectively. Notably, the share of GEL deposits in total deposits increased significantly y-o-y from 50.6% to 58.1% (54.3% as at 31 March 2026).

Liquidity

	Jun-26	Jun-25	Mar-26
IFRS-based NBG Liquidity Coverage Ratio (Bank of Georgia)	152.0%	125.9%	140.0%
IFRS-based NBG Net Stable Funding Ratio (Bank of Georgia)	132.9%	127.4%	130.3%

Both Bank of Georgia's Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) were well above the regulatory minimum requirements of 100%.

Capital position

Bank of Georgia maintains solid levels of capital, with all ratios comfortably above the minimum regulatory requirements. The movement in capital adequacy ratios in 2Q26 and the potential impact of a 10% devaluation of GEL are as follows:

	31 Mar 2026	2Q26 profit	Business growth	Currency impact	Dividend payment	Tier 1- Tier 2	30 Jun 2026				Min requirement	Buffer above min requirement		Potential impact of a 10% GEL devaluation
CET 1 capital adequacy	17.9%	1.6%	-0.6%	0.2%	-0.9%	0.0%	18.2%				15.5%	2.7%	-0.7%
Tier 1 capital adequacy	20.8%	1.6%	-0.6%	0.1%	-0.9%	0.0%	21.0%				17.6%	3.4%	-0.6%
Total capital adequacy	22.2%	1.6%	-0.6%	0.1%	-0.9%	0.3%	22.7%				20.5%	2.2%	-0.5%

 

 

Armenian Financial Services (AFS)

GEL thousands	2Q26	2Q25	Change y-o-y	1Q26	Change q-o-q		1H26	1H25	Change y-o-y
INCOME STATEMENT HIGHLIGHTS
Interest income	427,449	318,383	34.3%	388,682	10.0%		816,131	624,307	30.7%
Interest expense	(176,800)	(123,510)	43.1%	(159,617)	10.8%		(336,417)	(236,486)	42.3%
Net interest income	250,649	194,873	28.6%	229,065	9.4%		479,714	387,821	23.7%
Net fee and commission income	33,070	23,901	38.4%	29,995	10.3%		63,065	44,392	42.1%
Net foreign currency gain	45,158	37,852	19.3%	33,435	35.1%		78,593	71,870	9.4%
Regulatory-related expenses	(3,501)	(2,633)	33.0%	(3,680)	-4.9%		(7,181)	(5,400)	33.0%
Other expenses	(2,334)	(1,722)	35.5%	(2,074)	12.5%		(4,408)	(3,144)	40.2%
Net other income	2,635	380	NMF	3,570	-26.2%		6,205	3,530	75.8%
Net operating income	325,677	252,651	28.9%	290,311	12.2%		615,988	499,069	23.4%
Salaries and other employee benefits	(94,457)	(91,576)	3.1%	(93,395)	1.1%		(187,852)	(177,372)	5.9%
Administrative expenses	(15,720)	(17,372)	-9.5%	(15,328)	2.6%		(31,048)	(34,086)	-8.9%
Depreciation, amortisation and impairment	(16,921)	(15,404)	9.8%	(15,883)	6.5%		(32,804)	(29,958)	9.5%
Other operating expenses	(1,477)	(938)	57.5%	(669)	120.8%		(2,146)	(2,612)	-17.8%
Operating expenses	(128,575)	(125,290)	2.6%	(125,275)	2.6%		(253,850)	(244,028)	4.0%
Operating income before cost of risk	197,102	127,361	54.8%	165,036	19.4%		362,138	255,041	42.0%
Cost of risk	(20,835)	(5,767)	NMF	(5,804)	NMF		(26,639)	(13,940)	91.1%
Profit before income tax expense	176,267	121,594	45.0%	159,232	10.7%		335,499	241,101	39.2%
Income tax expense	(33,222)	(25,803)	28.8%	(29,804)	11.5%		(63,026)	(49,796)	26.6%
Profit	143,045	95,791	49.3%	129,428	10.5%		272,473	191,305	42.4%

 

BALANCE SHEET HIGHLIGHTS	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Cash and cash equivalents	917,342	1,271,871	-27.9%	694,989	32.0%
Amounts due from credit institutions	1,985,807	831,897	138.7%	1,851,418	7.3%
Investment securities	1,509,156	1,463,753	3.1%	1,509,123	0.0%
Loans to customers, finance lease and factoring receivables	14,041,531	10,341,990	35.8%	12,551,342	11.9%
Loans to customers, finance lease and factoring receivables, LC	7,727,439	5,999,058	28.8%	7,026,474	10.0%
Loans to customers, finance lease and factoring receivables, FC	6,314,092	4,342,932	45.4%	5,524,868	14.3%
Property and equipment	81,805	79,912	2.4%	78,479	4.2%
All remaining assets	487,375	365,377	33.4%	567,237	-14.1%
Total assets	19,023,016	14,354,800	32.5%	17,252,588	10.3%
Client deposits and notes	11,444,050	8,379,668	36.6%	10,188,812	12.3%
Client deposits and notes, LC	6,933,631	4,772,660	45.3%	6,190,453	12.0%
Client deposits and notes, FC	4,510,419	3,607,008	25.0%	3,998,359	12.8%
Amounts owed to credit institutions	3,204,987	2,430,196	31.9%	2,648,168	21.0%
Debt securities issued	1,440,017	1,171,408	22.9%	1,370,433	5.1%
All remaining liabilities	403,206	403,860	-0.2%	550,056	-26.7%
Total liabilities	16,492,260	12,385,132	33.2%	14,757,469	11.8%
Total equity	2,530,756	1,969,668	28.5%	2,495,119	1.4%
Risk-weighted assets (Ameriabank CJSC standalone)	16,475,510	13,200,273	24.8%	16,818,447	-2.0%

 

KEY RATIOS	2Q26	2Q25		1Q26			1H26	1H25
ROAA	3.2%	2.8%		3.1%			3.1%	2.9%
ROAE	23.1%	20.1%		21.8%			22.5%	20.6%
Net interest margin	6.0%	6.5%		6.0%			6.0%	6.6%
Loan yield	11.3%	11.5%		11.3%			11.3%	11.5%
Loan yield, AMD	13.6%	13.9%		14.1%			13.8%	13.8%
Loan yield, FC	8.4%	8.1%		7.6%			8.0%	8.2%
Cost of funds	4.6%	4.4%		4.6%			4.6%	4.3%
Cost of client deposits and notes	3.9%	3.5%		3.9%			3.9%	3.3%
Cost of client deposits and notes, AMD	5.4%	5.1%		5.4%			5.4%	4.8%
Cost of client deposits and notes, FC	1.6%	1.4%		1.6%			1.6%	1.4%
Cost of time deposits	6.7%	6.1%		6.7%			6.8%	5.9%
Cost of time deposits, AMD	9.3%	9.7%		9.4%			9.4%	9.4%
Cost of time deposits, FC	2.9%	2.3%		2.9%			2.9%	2.4%
Cost of current accounts and demand deposits	1.7%	1.6%		1.6%			1.7%	1.6%
Cost of current accounts and demand deposits, AMD	2.5%	2.3%		2.4%			2.4%	2.2%
Cost of current accounts and demand deposits, FC	0.5%	0.6%		0.5%			0.5%	0.6%
Cost:income ratio	39.5%	49.6%		43.2%			41.2%	48.9%
Cost of credit risk ratio	0.6%	0.3%		0.2%			0.4%	0.2%

Performance highlights

•	AFS net operating income grew by 28.9% y-o-y in 2Q26, and 23.4% y-o-y in 1H26, driven in both periods by strong net interest income generation complemented by positive contributions from net fee and commission income and net foreign currency gains.
•	NIM stood at 6.0% in 2Q26, flat q-o-q, on the back of stable loan yield and cost of funds. The y-o-y contraction of 50 bps in 2Q26 reflected higher cost of funds on the back of AT1 issuances and higher cost of deposits, coupled with a modest decline in loan yield amid competitive pressures on LC lending.
•	Net fee and commission income grew by 38.4% y-o-y in 2Q26 and 42.1% y-o-y in 1H26. 1H26 included advisory fees (GEL 2.3m in 2Q26 and GEL 5.5m in 1Q26) and currency conversion fees which were reclassified from net foreign currency gains to align with Group accounting policies (GEL 2.6m in 2Q26 and GEL 2.0m in 1Q26), neither of which were present in the 2Q25 and 1H25 comparison periods. Excluding these items, net fee and commission income grew by 17.9% y-o-y in 2Q26 and 14.2% y-o-y in 1H26, mainly reflecting income from payments business as well as trade finance operations.
•	Net foreign currency gains grew by 19.3% y-o-y in 2Q26 and 9.4% y-o-y in 1H26, primarily driven by increased dealing turnover across both corporate and retail transactions.
•	Operating expenses increased by 2.6% y-o-y in 2Q26 and by 4.0% y-o-y in 1H26; Figures in the prior year included management retention bonus, which elevated expenses in 1Q25 and 2Q25. Adjusting for this effect, operating expenses were up 13.5% and 15.5% y-o-y in 2Q26 and 1H26, respectively, reflecting continued investments in technology and talent to support business growth.
•	Excluding the above-mentioned effect on prior year's operating expenses, profit growth would have been 32.7% and 26.4% y-o-y in 2Q26 and 1H26, respectively.
•	Overall portfolio quality remained healthy, with some normalisation of cost of risk observed in retail.

Portfolio highlights[2]

	Portfolio highlights: loans to customers, finance lease and factoring receivables
	Jun-26			Jun-25		Change y-o-y		Change y-o-y (constant currency)		Mar-26		Change q-o-q	Change q-o-q (constant currency)
Total AFS			14,041,531	10,341,990		35.8%		36.8%		12,551,342		11.9%	12.3%
Retail			5,950,290	4,647,775		28.0%		26.8%		5,489,135		8.4%	7.9%
Mortgages			3,119,359	2,541,329		22.7%		21.4%		2,821,132		10.6%	9.9%
Consumer loans			2,139,962	1,523,828		40.4%		39.0%		2,002,157		6.9%	6.3%
Retail SME			690,969	582,618		18.6%		18.7%		665,846		3.8%	4.0%
Corporate			8,091,241	5,694,215		42.1%		44.9%		7,062,207		14.6%	15.7%
			Portfolio highlights: customer deposits and notes
	Jun-26				Jun-25		Change y-o-y		Change y-o-y (constant currency)		Mar-26	Change q-o-q	Change q-o-q (constant currency)
Total AFS		11,444,050			8,379,668		36.6%		37.1%		10,188,812	12.3%	12.5%
Retail		6,242,532			4,561,788		36.8%		38.0%		5,531,736	12.8%	13.3%
Corporate		5,201,518			3,817,880		36.2%		36.0%		4,657,076	11.7%	11.5%
	Loan portfolio quality: cost of credit risk ratio
	2Q26				2Q25				1Q26			1H26	1H25
Total AFS	0.6%				0.3%				0.2%			0.4%	0.2%
Retail	1.0%				0.8%				0.6%			1.1%	0.4%
Corporate	0.3%				-0.2%				-0.1%			0.1%	0.1%
	Loan portfolio quality: NPL ratio
	Jun-26				Jun-25				Mar-26
Total AFS	2.0%				1.2%				2.0%
Retail	3.9%				1.1%				3.6%
Corporate	0.6%				1.3%				0.7%

                                                                                                                                           

•	Customer loans grew strongly by 36.8% y-o-y and 12.3% q-o-q in cc, with broad-based growth across both Corporate and Retail segments. Corporate loans grew 44.9% y-o-y and 15.7% q-o-q in cc, supported in part by strong demand associated with large-scale investment and infrastructure activity in Armenia. Within the Retail portfolio, consumer loans maintained the strongest growth trajectory, posting 39.0% y-o-y and 6.3% q-o-q growth in cc. Mortgage lending grew by 21.4% y-o-y and 9.9% q-o-q in cc, now representing 52.4% of the total retail loan book. Ameriabank strengthened its market leadership, with its lending share rising to 22.9% as at 30 June 2026 (#1 position), up 1.7pp y-o-y and 0.9pp q-o-q.
•	Client deposits and notes also grew strongly, rising by 37.1% y-o-y and 12.5% q-o-q in cc. The share of current account and demand deposits remained broadly stable y-o-y at 58.3% of the total deposit base, while increasing on a quarterly basis (58.4% as at 30 June 2025 and 55.1% as at 31 March 2026). The bank's deposit market share (including local bonds) expanded by 1.1pp y-o-y to reach 20.2% as at 30 June 2026 (#2 position) (+0.6pp q-o-q).
•	AFS maintained a diversified funding structure with customer deposits and local debt securities representing 78.1% of total liabilities, and the ratio of net loans, factoring and finance lease receivables to customer deposits and notes, local debt securities and DFI funding standing at 97.8% as at 30 June 2026.
•	The y-o-y uptick in the Retail NPL ratio partly reflects a change in write-off policy introduced in 3Q25, whereby write-off timelines were refined by loan type based on actual recovery statistics, rather than a uniform 270-day threshold applied across all loans.

Liquidity

•	Ameriabank has maintained a strong liquidity position, with CBA LCR at 180.0% and CBA NSFR at 126.0% as at 30 June 2026, well above the minimum regulatory requirements of 100%.

Capital position

•		As at 30 June 2026, Ameriabank's CET 1, Tier 1, and Total capital ratios stood at 14.0%, 15.6%, and 18.6%, respectively, all above the minimum requirements of 12.0%, 14.1%, and 16.8%, respectively. In February 2026, Ameriabank successfully placed inaugural 8.5% USD 50m Additional Tier 1 capital notes. In May 2026, Ameriabank successfully completed the placement of a second USD 50m tranche of Additional Tier 1 capital notes at an 8.0% coupon. Together, these issuances have enabled Ameriabank to make its first-ever dividend distribution to the Group in the amount of GEL 157m, net of tax. CBA has adopted Basel III treatment for lowering risk weights for SME loans effective 13 April 2026. This change resulted in one-off positive impact on capital ratios from regulatory changes. On 28 July 2026, the Board of the Central Bank of Armenia decided to raise the countercyclical capital buffer from 1.75% to 2.00% of risk-weighted assets, with the new rate effective February 1, 2027.
		31 Mar 2026	2Q26 profit	Business growth	Currency impact	Dividend payment	Regulatory changes	Tier1-Tier2	Other	30 Jun 2026			Minimum requirement	Buffer above min requirement	Potential impact of a 10% AMD devaluation
CET 1 capital adequacy		14.1%	0.7%	-1.0%	0.1%	-1.1%	1.2%	0.0%	0.0%	14.0%			12.0%	2.0%	-0.6%
Tier 1 capital adequacy		14.9%	0.7%	-1.2%	0.2%	-1.1%	1.3%	0.8%	0.0%	15.6%			14.1%	1.5%	-0.5%
Total capital adequacy		17.9%	0.7%	-1.4%	0.1%	-1.1%	1.6%	0.8%	0.0%	18.6%			16.8%	1.8%	-0.5%

 

 

Other Businesses

The Business Division 'Other Businesses' includes JSC Belarusky Narodny Bank (BNB) serving retail and SME clients in Belarus, JSC Digital Area - a digital ecosystem in Georgia including e-commerce, ticketing, and inventory management SaaS, Lion Finance Group PLC - the holding company, and other small entities and intragroup eliminations.

GEL thousands	2Q26	2Q25	Change y-o-y	1Q26	Change q-o-q		1H26	1H25	Change y-o-y
INCOME STATEMENT HIGHLIGHTS
Interest income	39,362	28,392	38.6%	35,061	12.3%		74,423	52,616	41.4%
Interest expense	(20,459)	(18,278)	11.9%	(20,421)	0.2%		(40,880)	(30,893)	32.3%
Net interest income	18,903	10,114	86.9%	14,640	29.1%		33,543	21,723	54.4%
Net fee and commission income	3,414	3,649	-6.4%	3,195	6.9%		6,609	7,275	-9.2%
Net foreign currency gain	33,670	23,424	43.7%	20,735	62.4%		54,405	52,270	4.1%
Regulatory-related expenses	(1,787)	(1,136)	57.3%	(1,716)	4.1%		(3,503)	(1,365)	156.6%
Net other income	4,354	2,707	60.8%	3,630	19.9%		7,984	3,867	106.5%
Net operating income	58,554	38,758	51.1%	40,484	44.6%		99,038	83,770	18.2%
Salaries and other employee benefits	(17,968)	(16,111)	11.5%	(17,790)	1.0%		(35,758)	(29,794)	20.0%
Administrative expenses	(12,786)	(8,318)	53.7%	(10,714)	19.3%		(23,500)	(17,045)	37.9%
Depreciation, amortisation and impairment	(10,502)	(3,079)	NMF	(4,219)	148.9%		(14,721)	(5,904)	149.3%
Other operating expenses	(380)	(333)	14.1%	(329)	15.5%		(709)	(675)	5.0%
Operating expenses	(41,636)	(27,841)	49.5%	(33,052)	26.0%		(74,688)	(53,418)	39.8%
Operating income before cost of risk	16,918	10,917	55.0%	7,432	127.6%		24,350	30,352	-19.8%
Cost of risk	(1,824)	819	NMF	(770)	136.9%		(2,594)	69	NMF
Profit before income tax expense	15,094	11,736	28.6%	6,662	126.6%		21,756	30,421	-28.5%
Income tax expense	(12,354)	(4,130)	199.1%	(3,153)	NMF		(15,507)	(10,334)	50.1%
Profit	2,740	7,606	-64.0%	3,509	-21.9%		6,249	20,087	-68.9%

 

BALANCE SHEET HIGHLIGHTS	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Cash and cash equivalents	804,630	641,614	25.4%	679,737	18.4%
Amounts due from credit institutions	23,563	23,173	1.7%	30,636	-23.1%
Investment securities	95,022	124,767	-23.8%	142,971	-33.5%
Loans to customers, finance lease and factoring receivables	1,223,493	881,548	38.8%	1,068,647	14.5%
Property and equipment	18,518	15,657	18.3%	18,218	1.6%
All remaining assets	133,277	99,238	34.3%	127,892	4.2%
Total assets	2,298,503	1,785,997	28.7%	2,068,101	11.1%
Client deposits and notes	1,667,597	1,430,237	16.6%	1,567,641	6.4%
Amounts owed to credit institutions	9,926	(15,834)	NMF	48,814	-79.7%
Debt securities issued	48,481	12,700	NMF	13,201	NMF
All remaining liabilities	164,833	8,571	NMF	51,186	NMF
Total liabilities	1,890,837	1,435,674	31.7%	1,680,842	12.5%
Total equity	407,666	350,323	16.4%	387,259	5.3%

 

•	Net operating income grew by 51.1% y-o-y in 2Q26 and 18.2% y-o-y in 1H26. Net foreign currency gains were a strong contributor to 2Q26 y-o-y growth, driven by expanded FX activity at BNB. Net interest income grew strongly in both 2Q26 and 1H26, supported by NIM expansion at BNB, reflecting higher loan yields alongside a declining cost of deposits, the latter benefiting from a more favourable rate environment.
•	Operating expenses were up 49.5% and 39.8% y-o-y in 2Q26 and 1H26, respectively. The primary driver was depreciation, amortisation and impairment charges, which included an impairment of goodwill associated with one of Digital Area's smaller business units (e-commerce delivery platform). Growth in administrative expenses also contributed to total expense growth, partly due to higher consulting costs. Excluding these two items, operating expenses would have been up 19.5% y-o-y in 2Q26 and up 24.1% y-o-y in 1H26.
•	The effective tax rate increased y-o-y, reflecting an additional tax charge on dividends received from Ameriabank recognised in 2Q26.
•	BNB's capital ratios, calculated in accordance with the National Bank of the Republic of Belarus' standards, were above the minimum requirements as at 30 June 2026: Tier 1 capital adequacy ratio at 10.1% (minimum requirement of 7.0%) and Total capital adequacy ratio at 13.9% (minimum requirement of 12.5%).

 

 

Unaudited consolidated financial information

GEL thousands	2Q26	2Q25	Change y-o-y	1Q26	Change q-o-q			1H26		1H25		Change y-o-y
INCOME STATEMENT HIGHLIGHTS
Interest income	1,560,463	1,299,141	20.1%	1,466,122	6.4%			3,026,585		2,536,548		19.3%
Interest expense	(674,260)	(571,661)	17.9%	(643,508)	4.8%			(1,317,768)		(1,114,707)		18.2%
Net interest income	886,203	727,480	21.8%	822,614	7.7%			1,708,817		1,421,841		20.2%
Fee and commission income	340,356	264,321	28.8%	306,949	10.9%			647,305		513,647		26.0%
Fee and commission expense	(140,485)	(106,016)	32.5%	(124,307)	13.0%			(264,792)		(211,514)		25.2%
Net fee and commission income	199,871	158,305	26.3%	182,642	9.4%			382,513		302,133		26.6%
Net foreign currency gain	166,253	152,597	8.9%	130,124	27.8%			296,377		298,191		-0.6%
Regulatory-related expenses	(19,219)	(16,172)	18.8%	(18,371)	4.6%			(37,590)		(31,600)		19.0%
Other expenses	(2,334)	(1,722)	35.5%	(2,074)	12.5%			(4,408)		(3,144)		40.2%
Net other income	10,794	18,077	-40.3%	9,978	8.2%			20,772		29,362		-29.3%
Net operating income	1,241,568	1,038,565	19.5%	1,124,913	10.4%			2,366,481		2,016,783		17.3%
Salaries and other employee benefits	(261,610)	(240,029)	9.0%	(252,077)	3.8%			(513,687)		(453,104)		13.4%
Administrative expenses	(94,627)	(80,884)	17.0%	(78,138)	21.1%			(172,765)		(155,328)		11.2%
Depreciation, amortisation and impairment	(66,834)	(54,093)	23.6%	(57,050)	17.1%			(123,884)		(105,260)		17.7%
Other operating expenses	(3,583)	(3,221)	11.2%	(2,171)	65.0%			(5,754)		(6,994)		-17.7%
Operating expenses	(426,654)	(378,227)	12.8%	(389,436)	9.6%			(816,090)		(720,686)		13.2%
Profit from associates	604	465	29.9%	386	56.5%			990		736		34.5%
Operating income before cost of risk	815,518	660,803	23.4%	735,863	10.8%			1,551,381		1,296,833		19.6%
Expected credit loss on loans to customers and factoring receivables	(62,174)	(47,190)	31.8%	(34,758)	78.9%			(96,932)		(64,669)		49.9%
Expected credit loss on finance lease receivables	1,142	(418)	NMF	666	71.5%			1,808		(627)		NMF
Other expected credit loss and impairment charge on other assets and provisions	(3,428)	(3,188)	7.5%	(4,748)	-27.8%			(8,176)		(12,413)		-34.1%
Cost of risk	(64,460)	(50,796)	26.9%	(38,840)	66.0%			(103,300)		(77,709)		32.9%
Profit before income tax expense	751,058	610,007	23.1%	697,023	7.8%			1,448,081		1,219,124		18.8%
Income tax expense	(132,253)	(96,760)	36.7%	(112,035)	18.0%			(244,288)		(192,813)		26.7%
Profit	618,805	513,247	20.6%	584,988	5.8%			1,203,793		1,026,311		17.3%
Attributable to:
- shareholders of the Group	618,800	513,286	20.6%	584,973	5.8%			1,203,773		1,024,421		17.5%
- non-controlling interests	5	(39)	NMF	15	-66.7%			20		1,890		-98.9%
Basic earnings per share	14.52	11.89	22.1%	13.72	5.8%			28.24		23.70		19.2%
Diluted earnings per share	14.39	11.75	22.5%	13.61	5.7%			27.98		23.44		19.4%

 

GEL thousands	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
BALANCE SHEET HIGHLIGHTS
Cash and cash equivalents	5,046,754	4,022,221	25.5%	3,440,364	46.7%
Amounts due from credit institutions	3,777,016	3,194,606	18.2%	3,764,046	0.3%
Investment securities	9,737,554	7,944,799	22.6%	9,078,699	7.3%
Investment securities pledged under sale and repurchase agreements and securities lending	320,654	1,171,662	-72.6%	247,579	29.5%
Loans to customers, finance lease and factoring receivables	44,429,043	36,530,447	21.6%	41,881,946	6.1%
Prepayments	160,538	103,759	54.7%	161,586	-0.6%
Foreclosed assets	405,131	342,565	18.3%	382,441	5.9%
Right-of-use assets	327,471	291,445	12.4%	323,191	1.3%
Investment properties	98,261	131,080	-25.0%	102,078	-3.7%
Property and equipment	622,402	578,502	7.6%	616,135	1.0%
Goodwill	35,488	41,253	-14.0%	41,253	-14.0%
Intangible assets	402,750	338,794	18.9%	389,142	3.5%
Income tax assets	55	2,253	-97.6%	207	-73.4%
Other assets	447,670	383,771	16.7%	539,097	-17.0%
Assets held for sale	9,752	14,913	-34.6%	14,038	-30.5%
Total assets	65,820,539	55,092,070	19.5%	60,981,802	7.9%
Client deposits and notes	43,664,753	34,789,736	25.5%	39,699,016	10.0%
Amounts owed to credit institutions	7,372,045	8,927,118	-17.4%	7,722,100	-4.5%
Debt securities issued	4,176,271	2,445,652	70.8%	3,298,758	26.6%
Lease liability	359,831	304,559	18.1%	339,316	6.0%
Accruals and deferred income	239,749	249,568	-3.9%	277,532	-13.6%
Income tax liabilities	165,531	116,575	42.0%	195,988	-15.5%
Other liabilities	450,431	639,730	-29.6%	579,422	-22.3%
Total liabilities	56,428,611	47,472,938	18.9%	52,112,132	8.3%
Share capital	1,419	1,445	-1.8%	1,423	-0.3%
Additional paid-in capital	613,014	477,694	28.3%	561,529	9.2%
Treasury shares	(18)	(28)	-35.7%	(18)	0.0%
Capital redemption reserve	199	173	15.0%	196	1.5%
Other reserves	165,355	47,442	NMF	158,589	4.3%
Retained earnings	8,609,880	7,090,940	21.4%	8,145,881	5.7%
Total equity attributable to shareholders of the Group	9,389,849	7,617,666	23.3%	8,867,600	5.9%
Non-controlling interests	2,079	1,466	41.8%	2,070	0.4%
Total equity	9,391,928	7,619,132	23.3%	8,869,670	5.9%
Total liabilities and equity	65,820,539	55,092,070	19.5%	60,981,802	7.9%
Book value per share	220.69	176.81	24.8%	207.82	6.2%

 

 

Non-financial information

Customer engagement

	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Retail (thousands):
Monthly active customers:
Bank of Georgia (standalone)	2,275.3	2,077.5	9.5%	2,233.2	1.9%
Ameriabank (standalone)	521.5	407.9	27.9%	495.7	5.2%
Digital MAU:
Bank of Georgia (standalone)	1,922.1	1,696.2	13.3%	1,868.3	2.9%
Ameriabank (standalone)	392.1	266.7	47.0%	362.4	8.2%
Digital DAU:
Bank of Georgia (standalone)	1,049.4	874.4	20.0%	984.9	6.5%
Ameriabank (standalone)	174.2	110.0	58.3%	160.2	8.8%
Share of products sold through retail digital channels:
Bank of Georgia (standalone)	73%	69%		71%
	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Businesses (thousands):
Monthly active customers:
Bank of Georgia (standalone)	136.4	122.3	11.6%	129.8	5.1%
Ameriabank (standalone)	41.4	36.1	14.7%	40.3	2.7%
Digital MAU:
Bank of Georgia (standalone)	114.8	100.0	14.7%	108.4	5.9%
Ameriabank (standalone)	33.8	28.1	20.3%	32.8	3.0%

Payments business

Bank of Georgia (standalone)	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Payment MAU - retail (issuing) (thousands)	1,710.4	1,528.6	11.9%	1,668.3	2.5%
Market share in acquiring volumes[3]	56.7%	55.9%		56.9%
Active merchants (thousands)	28.8	25.4	13.3%	26.7	7.9%

 

	2Q26	2Q25	Change y-o-y	1Q26	Change q-o-q
Volume of payment transactions (acquiring)3(millions): Bank of Georgia (standalone)	6,524	5,431	20.1%	5,788	12.7%
POS	4,173	3,452	20.9%	3,563	17.1%
E-comm	2,351	1,979	18.8%	2,225	5.7%

Additional information

	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Employees (period-end)
Bank of Georgia	8,639	8,325	3.8%	8,708	-0.8%
Ameriabank	2,452	2,205	11.2%	2,442	0.4%
Other	2,252	2,173	3.6%	2,359	-4.5%
Group	13,343	12,703	5.0%	13,509	-1.2%

 

Branch-network	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Bank of Georgia	206	187	10.2%	205	0.5%
Of which:
Full-scale branches	115	99	16.2%	109	5.5%
Transactional branches	91	88	3.4%	96	-5.2%
Ameriabank	30	26	15.4%	29	3.4%

 

FX rates	Jun-26	Jun-25		Mar-26
GEL/USD exchange rate (period-end)	2.65	2.72		2.70
GEL/GBP exchange rate (period-end)	3.50	3.74		3.57
GEL/1000AMD exchange rate (period-end)	7.18	7.07		7.12

 

Shares outstanding	Jun-26	Jun-25	Change y-o-y	Mar-26	Change q-o-q
Ordinary shares outstanding (period-end)	42,547,127	43,083,953	-1.2%	42,669,622	-0.3%
Treasury shares outstanding (period-end)	568,307	827,573	-31.3%	554,307	2.5%
Total shares outstanding (period-end)	43,115,434	43,911,526	-1.8%	43,223,929	-0.3%

Principal risks and uncertainties

Macro and geopolitical risks

Macro and geopolitical risks are the risks of adverse changes in macroeconomic parameters and/or the geopolitical environment that may result in the deteriorated performance and position of the Group.

Key drivers and developments

The Group's asset base is geographically concentrated in Georgia and Armenia, where its principal banking subsidiaries operate. Key macro risks for Georgia and Armenia include changes in GDP growth, inflation, interest rates, exchange rates and political developments. Despite robust economic performance recently, both countries continue to face downside risks stemming from regional geopolitical instability, global trade tensions and country-specific challenges.

The unresolved war in Ukraine and tensions in the Middle East remain primary sources of geopolitical risk in the wider region. The Georgian and Armenian economies are particularly exposed to these risks due to their reliance on imports, foreign direct investment, and external inflows from exports, international tourism and remittances.

As both economies have benefited from inflows of migrants and capital following the onset of the Russia-Ukraine war, there is a risk that these inflows could partially reverse once the conflict ends. However, the persistence of these inflows, coupled with elevated uncertainty surrounding the timing and nature of any potential resolution, makes an abrupt reversal less likely. Based on recent inflow dynamics, a gradual normalisation with limited adverse impact on the domestic economies appears more plausible.

Escalations involving Iran in mid-2025 and early 2026 contributed to increased volatility in global energy markets and disruptions to regional transport routes. In June 2026, the United States and Iran signed an interim memorandum of understanding aimed at ending the conflict. However, implementation quickly broke down, with both sides accusing each other of violating the agreement and resuming military operations. As a result, uncertainty surrounding the duration and scale of the conflict remains elevated.

The Georgian and Armenian economies have limited direct exposure to Iran. In 2025, inflows from merchandise exports, tourism, remittances, and foreign direct investment from Iran accounted for a small fraction of their respective GDPs. Nevertheless, both economies could be adversely affected if instability spreads to other Middle Eastern countries. In such a scenario, economic disruptions in affected countries, along with broader transportation disturbances, could weaken external inflows to Georgia and Armenia. This would adversely affect economic activity and put pressure on exchange rates. Furthermore, sustained high oil prices, combined with local currency depreciation, could generate domestic inflationary pressures and prompt central banks to tighten monetary policy. A prolonged and widespread conflict could also have adverse indirect effects through weaker external demand. However, diversified sources of foreign currency inflows, including from energy-exporting countries, could help to limit the negative impact. Moreover, amidst protracted tensions in the Middle East, the redirection of tourism and relocation of capital cannot be ruled out, which could provide additional support to the domestic economies.

In early 2025, U.S. import tariffs and retaliatory measures by major trading partners increased global trade-policy uncertainty, amplifying concerns about slower global growth and tighter financial conditions. While Georgia and Armenia have limited direct trade exposure to the United States, weaker economic performance among key partner economies - particularly, the EU and China - may reduce external demand for both countries. Furthermore, a potential deterioration in investor sentiment could trigger capital outflows from developing economies such as Georgia and Armenia, placing depreciation pressure on local currencies and potentially increasing inflation and foreign-currency debt service costs.

In addition to these shared risks, both countries face several country-specific challenges. In Georgia, continued political uncertainty following the October 2024 Parliamentary elections may weigh on consumer and business confidence, as well as investor sentiment. This, in turn, could translate into prolonged weakness in FDI inflows, with adverse effects on the local currency and productivity.

The June 2026 parliamentary election in Armenia was held amid elevated tensions with Russia. Ahead of the election, Russian authorities imposed temporary import restrictions on several Armenian agricultural products. In addition, Russian officials stated that Armenia's aspirations for closer integration with the European Union were incompatible with its membership in the Russian-led Eurasian Economic Union. Moscow also warned that it could reconsider the supply of oil and natural gas to Armenia on concessional terms if Armenia continued pursuing closer ties with the EU. Following his ruling party's convincing election victory, Armenia's Prime Minister expressed his intention to normalise relations with Russia while maintaining Armenia's current foreign policy course. The heightened tensions with Russia could adversely affect external inflows, investor sentiment, and overall economic activity in Armenia.

The proximity of Georgia and Armenia to Russia presents heightened sanctions evasion risks. Group Companies have strengthened compliance and due diligence measures to mitigate these risks. Further details on actions taken to mitigate financial crime risk can be found on page 23.

Mitigation

Governance: The Board receives quarterly updates on global, regional and country-specific macroeconomic conditions from economic specialists and regularly discusses major political and geopolitical developments affecting the Group's operating subsidiaries.

Monitoring and reporting: Group Companies continuously monitor macroeconomic developments and incorporate adverse economic and geopolitical conditions in stress and scenario analyses, including portfolio-level sensitivity analysis - enabling local Executive Management to take proactive actions, including adjustment of operational risk limits during underwriting when necessary.

Other mitigants: Georgian legislation (effective 1 July 2026) requires loans up to one million GEL be issued only in GEL if borrower income is also in GEL. The NBG has established a currency-induced credit risk (CICR) capital buffer to reduce dollarisation risks. Armenian legislation requires that mortgages and consumer loans to residents of Armenia be granted only in local currency.

For individual loans, NBG's payment-to-income (PTI) and loan-to-value (LTV) requirements are more conservative for foreign currency loans to mitigate borrower-level credit risk: PTI requirements for foreign currency loans are 5 ppts higher for monthly income below GEL 1,500 and 20 ppts higher for income above GEL 1,500; and the LTV requirement for foreign currency mortgage loans is 20 ppts tighter (effective 26 February 2025).

Ameriabank assesses borrower creditworthiness in line with its internal standards by incorporating stressed exchange rates into key metrics, including the obligations-to-income ratio for individuals, the debt service coverage ratio for business loans, and the LTV ratio.

Furthermore, both Group Companies manage their currency exposure through internal limits on open currency positions, which are set by their respective Supervisory Boards and are currently tighter than the regulatory requirements.

Credit risk

Credit risk is the risk that the Group will incur a financial loss due to customers or counterparties failing to meet their contractual obligations, arising primarily from lending activities.

Key drivers and developments

The Group's Expected Credit Loss (ECL) is affected by both idiosyncratic and sectoral/systemic risk factors. Increased ECL charges may result from portfolio growth, higher default rates, adverse portfolio quality shifts due to rating downgrades and/or changes in portfolio structure. The Group's cost of credit risk ratio was 0.5% for the six months ended 30 June 2026 (1H25: 0.4%)

Mitigation

Governance: The Board receives quarterly updates on the Group's credit risk profile during regular Board and Risk Committee meetings as well as quarterly results discussions.

Dedicated credit risk management functions are established within Group Companies to directly oversee and challenge the credit risk activities of frontline business units. In addition, each subsidiary has a centralised, enterprise-level risk management function responsible for overall credit risk management from a bank-wide perspective. Key responsibilities of these functions include overseeing aggregate credit risk assessment processes, developing and managing portfolio-wide policies, monitoring overall credit quality and conducting comprehensive stress testing and scenario analysis to assess the impact of adverse scenarios on the credit portfolio and capital adequacy.

Risk appetite: Group Companies have established credit risk appetites, including quantitative limits, to mitigate excessive credit risk and concentration at various levels. Credit risk profiles are monitored quarterly against this appetite and reported to the respective Supervisory Boards.

Credit assessment and approval: Across the Group, credit assessment processes are tailored to specific client segments and product types to ensure the level of review is appropriate for the associated risk.

Larger and more complex exposures, particularly within the Corporate Banking segment, are subject to a detailed individual underwriting process. For the SME and Retail Banking segments, a hybrid approach is used, combining individual assessments with automated, model-driven decisioning. The specific method used is determined by factors such as product type, exposure size and the subsidiary's operating model.

Automated, model-driven decisioning is a key component of the Group's credit assessment framework, particularly within retail lending, and is used to drive efficiency and consistency. The performance of all credit assessment models is regularly monitored in line with established model risk management frameworks to ensure their ongoing accuracy and effectiveness.

To ensure a robust credit-granting process, Group Companies have implemented several measures and frameworks:

·      Well-defined lending standards: Group Companies maintain clear standards for granting credit, which outline borrower requirements. These standards serve as the benchmark for evaluating creditworthiness of customers and enable the identification and assessment of potential risks.

·      Segregation of duties: A clear segregation of duties exists between credit analysis and approval functions. While credit analysts and business bankers prepare client presentations, these are independently reviewed by a risk manager. This review ensures that all risks and mitigating factors are identified and addressed, and that the loan is structured appropriately.

·      Multi-tiered loan approval committees: Exposures are reviewed and approved by multi-tiered Credit Committees. Each committee has a specific approval limit, ensuring that the level of review is appropriate for the size and risk profile of the proposed loan.

Beyond these frameworks, climate and Environmental, Social, and Governance (ESG) risks are formally considered in the lending process. Across the Group, credit risk managers integrate the assessment of these risks into their analysis and conclusions, which are subsequently discussed with the relevant credit committees.

Loan portfolio quality monitoring and reporting: Timely identification of macro and micro-level developments is ensured through established processes and controls. This monitoring includes a comprehensive assessment against risk appetite limits, supported by key risk and early warning indicators to identify areas of the portfolio with potentially increasing credit risk. The Chief Risk Officers and Credit Risk Management departments review the portfolio's credit quality monthly. The Supervisory Board Risk Committees periodically review these analyses within the context of the broader macroeconomic environment.

Group Companies adhere to the customer exposure limits for corporate loans set by their respective regulators, as well as to internally established limits. They actively monitor concentration levels within the loan portfolio and the financial performance of the largest borrowers to maintain a well-diversified loan book. Bank of Georgia's top 10 borrowers accounted for 6.3% of its gross loans to customers, factoring and finance lease receivables as at 30 June 2026 (6.4% as at 30 June 2025). Ameriabank's top 10 borrowers accounted for 15.2% of its gross loans, factoring and finance lease receivables as at 30 June 2026 (12.1% as at 30 June 2025).

Collateral valuation: Property and other types of security are used to mitigate credit risk. In Corporate and SME Banking, collateral primarily includes liens over real estate, property, plant and equipment, as well as inventory, transportation equipment, corporate guarantees, deposits and securities. In Retail Banking, loans to individuals are primarily secured by residential property. As at 30 June 2026, 79.6% of Bank of Georgia's and 80.2% of Ameriabank's gross loans, finance and factoring lease receivables were collateralised.

Group Companies monitor the market value of collateral during reviews of the adequacy of the allowance for ECL. For provisioning purposes, a discount to the current market value of assets is applied to reflect the liquidation value of collateral. Collateral is appraised either by reputable third-party firms or, in the case of Bank of Georgia, by a dedicated internal Asset Evaluation department. The appraisal report is submitted to the relevant Credit Committee as part of the loan application package, which also includes a report from the Credit Risk Officer.

Restructuring and collections: Group Companies assist borrowers facing financial difficulty by offering tailored solutions, such as loan restructuring, to help them meet their obligations and return to a performing status. As part of their overall collection activities, Group Companies also utilise certain measures for managing delinquencies at an early stage. For instance, Bank of Georgia has developed a process where automated restructuring offers are proactively delivered to clients for certain products that reach a defined delinquency threshold through digital channels. If no agreement is reached, banks initiate collateral repossession through court, arbitration or notary procedures.

ECL measurement:

Expected credit loss is measured as the probability-weighted present value of credit losses expected to result from all possible default events over the relevant time horizon - either the next twelve months or the remaining lifetime of the instrument, depending on the stage classification of the exposure. The measurement process is designed to be unbiased and to incorporate all reasonable and supportable information that is available at the reporting date without undue cost or effort including data on historical default and recovery rates, the current credit quality of the portfolio, and management's assessment of future macroeconomic conditions and their expected impact on borrower creditworthiness.

The time horizon applied to each exposure is determined by its stage classification. Financial instruments that are credit-impaired on initial recognition are classified as Purchased or Originated Credit-Impaired (POCI). These assets retain their POCI classification until derecognition, and a lifetime ECL is recognised for them throughout this period, regardless of subsequent improvements in credit quality. For all other financial instruments, the Group applies the following three-stage approach to measure ECL:

·      Stage 1: If, at the reporting date, the exposure is not credit-impaired and there has been no significant increase in credit risk since initial recognition, the Group recognises a credit loss allowance equal to the 12-month ECL.

·      Stage 2: If, at the reporting date, the exposure is not credit-impaired but there has been a significant increase in credit risk since initial recognition, the Group recognises a credit loss allowance equal to the lifetime ECL.

·      Stage 3: If, at the reporting date, the exposure is credit-impaired, the Group recognises a loss allowance equal to the lifetime ECL.

The Group calculates Expected Credit Losses (ECL) based on the Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD), following standard practice. LGD is estimated either collectively or individually, based on the client's exposure size. For collective assessments, the portfolio is segmented into homogeneous groups to improve accuracy. ECL is the probability-weighted sum of outcomes under baseline, upside, and downside economic scenarios. Staging and ECL incorporate both internal and external information, including credit ratings, financial statements, days past due, and economic forecasts.

Counterparty risk: The Group is exposed to counterparty credit risk - the risk of loss from a counterparty failing to meet its contractual obligations - through activities including inter-bank lending, foreign exchange settlements, trade finance, and investments in securities. To manage this risk, Group Companies establish individual counterparty limits based on credit ratings and risk profiles, alongside country limits to control concentration. Exposures are monitored daily, and breaches are escalated to Executive Management. Reflecting this prudent management, as at 30 June 2026, 93.5% of Bank of Georgia's and 92.2% of Ameriabank's inter-bank exposure was to investment-grade counterparties.

Liquidity and funding risks

Liquidity risk is the risk that the Group will be unable to meet its payment obligations when they fall due under normal or stressed circumstances.

Funding risk is the risk that the Group will not be able to access stable and diversified funding sources at an acceptable cost.

Key drivers and developments

Funding availability in emerging markets is subject to shifts in investor confidence, which can affect both pricing and access for the Group. Unfavourable market conditions may exert pressure on liquidity, particularly if liquid assets become illiquid or lose value. In such cases, alternative funding options can be limited in the Georgian and Armenian inter-bank markets and may involve additional pricing risks. The Group also faces risks from the potential for rapid, large-scale deposit outflows or the utilisation of off-balance-sheet commitments during periods of significant political or economic instability.

The Group maintains a diverse funding base comprising short-term sources (including retail and corporate deposits, as well as inter-bank and central bank borrowings) and longer-term sources (including retail and corporate term deposits, borrowings from International Financial Institutions (IFIs) and issued debt securities). Client deposits and notes remain the key sources of funding for Group Companies. In May 2026, Bank of Georgia successfully issued USD 300 million of 6.50% senior unsecured Notes due June 2031, which further contributed to funding diversification. As at 30 June 2026, the Group's long-term funding comprised 40.9% deposits, 32.1% amounts owed to credit institutions, and 27.0% debt securities. Group Companies maintain strong relationships with and benefit from the support of IFIs and private asset managers, ensuring a solid funding pipeline for the next 12 months.

Liquidity and funding positions of Group Companies remained strong throughout the period, with the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) for Bank of Georgia and Ameriabank exceeding the 100% regulatory minimum. As at 30 June, Bank of Georgia's LCR stood at 152.0% and its NSFR at 132.9%, while Ameriabank's LCR stood at 180.0% and its NSFR at 126.0%.

Mitigation

Governance: The Board receives regular updates on the Group's liquidity and funding position during its scheduled meetings and as part of the quarterly results approval process.

At a committee level, funding and liquidity risk management is governed by the Asset-Liability Committees (ALCOs) of the respective Group Companies. The ALCOs approve the liquidity risk management frameworks and oversee their implementation. The risk appetite limits defined within these frameworks require ultimate approval from the respective Supervisory Boards.

This governance is supported by a clear segregation of duties within Group Companies. The Finance function acts as the first line of defence, responsible for the day-to-day management of liquidity and funding positions, and managing the liquidity buffer. The Risk function serves as the second line of defence, providing independent oversight by developing policies, standards and guidelines, defining risk appetite, and reporting on the risk profile to the ALCOs.

Monitoring and reporting: Group Companies perform daily monitoring of market and internal early-warning indicators to detect signs of liquidity stress. The liquidity position is reported monthly to Executive Management and the respective Asset-Liability Committees (ALCOs). Furthermore, the Board's Risk Committee reviews the liquidity risk profile on a quarterly basis as part of its comprehensive risk dashboard review.

Risk appetite: The risk appetite framework defines tolerance for liquidity risk, in line with established liquidity adequacy principles. This tolerance is quantified through specific metrics that are approved by the respective Supervisory Boards and subject to annual review. This process enables the timely identification of potential deviations from the desired risk profile, thereby triggering proactive risk management actions.

Funding and liquidity management: Liquidity risk is managed through comprehensive frameworks, approved by the respective ALCOs, which model the ability to meet payment obligations under both normal and stressed conditions. Bank of Georgia has also developed a detailed liquidity contingency plan, which defines specific risk indicators and mitigation actions to enable the early detection of, and response to, liquidity pressures.

Liquidity stress testing: Both Bank of Georgia and Ameriabank have developed Internal Liquidity Adequacy Assessment Processes (ILAAP), incorporating stress testing to evaluate the adequacy of liquidity buffers under idiosyncratic, systemic, and combined stress scenarios. These scenarios cover all key liquidity drivers and are regularly reviewed to ensure their continued relevance.

Capital risk

Capital risk is the risk of failure to deliver business objectives, meet regulatory requirements, and/or meet market expectations due to insufficient capital.

Key drivers and developments

Bank of Georgia adheres to the NBG's capital adequacy regulation based on Basel III guidelines with regulatory discretion. Requirements include Pillar 1, a combined buffer (systemic, countercyclical, conservation), and Pillar 2 buffers (concentration, General Risk Assessment Programme (GRAPE), Currency-Induced Credit Risk (CICR), Credit Risk Adjustment (CRA), stress-test). Ameriabank is subject to Pillar 1 requirements, with the CBA planning to introduce Pillar 2 in the future.

Since March 2023, Bank of Georgia has been accumulating/will accummulate a neutral countercyclical capital buffer as follows: 0.25% by 15 March 2024; 0.5% by 15 March 2025; 0.75% by 15 March 2026; and 1% by 15 March 2027.

Following a decision by the CBA on 23 September 2025 (published on 6 October and effective from 15 October 2025), the regulatory framework was expanded to recognise Additional Tier 1 (AT1) capital instruments as an eligible component of bank capital. Consequently, in February 2026, Ameriabank strengthened its capital position through the successful issuance of its inaugural USD 50 million 8.5% Additional Tier 1 (AT1) capital notes, followed by a second USD 50 million 8.0% AT1 issue in June 2026.

Group Companies maintained capital adequacy ratios above their minimum regulatory requirements as at 30 June 2026 (see pages 10 and 13).

Mitigation

Governance: The Board maintains oversight of the capital positions of Group Companies through regular quarterly updates. It also reviews the potential impact of various scenarios to inform capital return decisions.

Day-to-day capital risk management is handled by the Finance departments as the first line of defence, while Risk Management units serve as the second line, setting capital risk frameworks and ensuring their effective implementation within Group Companies.

Risk appetite: Group Companies manage capital risk through a framework of bank-level limits aligned with defined risk appetites, which are approved by the respective ALCOs and Supervisory Boards. Monitoring occurs at multiple levels: monthly reviews by the ALCOs are complemented by quarterly reviews at both the local Supervisory Board and the Board's Risk Committee levels. Demonstrating this prudent approach, each Group Company maintains a distinct capital management policy aligned with its strategic objectives. This governance includes the monitoring of key capital adequacy metrics by the respective ALCOs and Supervisory Boards, including the level of internal capital buffers held above regulatory minimums.

Capital management: Both Bank of Georgia and Ameriabank maintain an Internal Capital Adequacy Assessment Process (ICAAP), approved by their respective Supervisory Boards and overseen by their ALCOs. Through this process, which includes annual risk assessments, the banks ensure they hold sufficient capital to cover material risks from a normative (supervisory) perspective. Bank of Georgia's ICAAP also incorporates an economic (internal) capital perspective.

These capital adequacy assessments are complemented by regulatory recovery plans at each Group Company. These plans establish a framework of early-warning indicators to enable the proactive identification of capital concerns and ensure timely mitigation.

Capital stress testing: Group Companies conduct capital stress tests using a range of diverse but plausible adverse scenarios. The design and calibration of these scenarios are tailored to the objective of each test, whether for internal capital planning, strategic decision-making or regulatory compliance.

Planning and forecasting: Capital forecasts are updated fortnightly at Bank of Georgia and monthly at Ameriabank. Both updates incorporate key inputs such as business expectations, portfolio quality forecasts, market conditions, emerging trends, and anticipated strategic changes.

Market risk

Market risk is the risk of financial loss resulting from movements in market variables that affect the fair value or future cash flows of financial instruments. This risk primarily arises from mismatches in the maturity, currency or interest rate characteristics of assets and liabilities, all of which are exposed to market fluctuations.

Key drivers and developments

Volatility in the GEL and AMD can expose the Group to foreign currency risk, which can adversely affect its financial position. This risk is managed by controlling the size of net open currency positions. For Bank of Georgia, this position is capped by the National Bank of Georgia (NBG) at 20% of its regulatory capital.

For Ameriabank, the corresponding limit set by the Central Bank of Armenia (CBA) is 10% of its regulatory capital. The Group is also exposed to interest rate risk which arises from mismatches in the repricing tenors of its fixed and floating-rate assets and liabilities. Consequently, changes in market interest rates can impact the Group's net interest income by widening or narrowing interest margins.

Mitigation

Governance: Within Group Companies, market risk governance is provided by the respective ALCOs and Supervisory Boards, which approve the risk appetite and oversee its implementation. This is supported by the Risk functions, acting as the second line of defence. Their responsibilities include developing the risk management frameworks and policies, defining the risk appetites, and conducting independent risk profile reviews, with their findings reported to the ALCOs.

Risk appetite: Group Companies manage currency and interest rate risk through an appetite framework defined by quantitative limits. These limits are approved by the respective ALCOs and Supervisory Boards, and compliance is monitored via risk profile reviews conducted at least quarterly.

Market risk management: The respective ALCOs set market risk exposure limits by currency and monitor compliance with the approved risk appetite frameworks. As part of this process, exposures and key metrics are regularly tested against a range of plausible adverse scenarios.

Currency risk is actively managed through the allocation of risk appetite limits for open currency positions. To measure and monitor these exposures, Group Companies employ Value at Risk (VaR) analysis based on historical simulation. This methodology assesses the potential impact of adverse market movements, providing a key input for managing foreign exchange risk within the established limits.

Interest rate risk is managed through policies approved by the respective Supervisory Boards, which aim to protect capital and earnings from adverse rate movements. This involves setting limits on the sensitivity of Net Interest Income (NII) and Economic Value of Equity (EVE) as well as on negative mark-to-market revaluations for trading book exposures. The ALCOs monitor these metrics to manage the Net Interest Margin (NIM), translating the approved risk appetite into operational limits and early-warning indicators for proactive management.

Compliance and conduct risks

Compliance risk is the risk of legal and/or regulatory sanctions and/or damage to the Group's reputation as a result of its failure to identify, assess, correctly interpret, comply with and/or manage regulatory and/ or legal requirements. Conduct risk is the risk that the conduct of the Group and its employees towards customers will lead to unethical and/or unfair customer outcomes and/or adversely affect market integrity, damaging the Group's reputation and competitive position.

Key drivers and developments

The Group operates across multiple jurisdictions, facing evolving and sometimes unpredictable legal and regulatory requirements. As a company listed on the Main Market of the London Stock Exchange, the Group is subject to the UK's regulatory framework for listed companies, which primarily governs areas such as corporate governance, disclosure and transparency, and market conduct. These obligations relate to the Group's status as a listed entity and do not extend to UK-specific regulations governing the provision of services to retail customers, such as the Treating Customers Fairly framework and the Consumer Duty, as the Group's banking subsidiaries operate outside the UK. In their respective countries of operation, the Group's principal operating subsidiaries are supervised by their local central banks: Bank of Georgia is regulated by the National Bank of Georgia (NBG), and Ameriabank is regulated by the Central Bank of Armenia (CBA).

Mitigation

Governance: The second line of defence within Group Companies comprises Bank of Georgia's Legal and Compliance function units under the CLO, and Ameriabank's Operational Control under CEO supervision. These units challenge first-line compliance risk management, establish compliance policies and coordinate risk identification, assessment, documentation, reporting and mitigation for processes and products.

Compliance risk management framework: Group Companies follow established policies and procedures that define principles, standards, roles and responsibilities for independent compliance functions. Internal Audit provides oversight through regular reviews of frameworks and policies.

Monitoring and reporting compliance risk: The Group prioritises compliance risk measurement and management through ongoing monitoring, assessment and reporting by Compliance and Legal Risk Management (Bank of Georgia) and Operational Control Service (Ameriabank). The Group Chief Legal Officer (CLO) reports significant regulatory and legal changes and material regulatory inspections to the Board quarterly.

Regulatory change management: As part of its integrated control framework, the Group systematically assesses the impact of legislative and regulatory changes during formal risk assessments. A dedicated change management system enables timely identification of legal amendments and facilitates appropriate departmental responses. The Group implements changes through formal action plans with structured follow-up.

Effective regulatory engagement is ensured through direct dialogue with regulators or via Banking Association channels - primarily the NBG for Bank of Georgia and the CBA for Ameriabank.

The Group CLO provides quarterly updates to the Board on regulatory developments and implementation progress across key jurisdictions.

Conduct risk management framework: The Group upholds a Code of Conduct and Ethics applicable to all subsidiaries. At Bank of Georgia, the Customer Protection Standard covers all stages of the product and services lifecycle, requiring transparent product offerings and clear, accurate communications to support informed customer decisions. Bank of Georgia's Customer Claims Management procedure handles customer complaints, and the Legal Consulting unit serves as the second line of defence - ensuring that complaint management is undertaken effectively and in compliance with applicable customer protection laws, regulations and internal policies and procedures. Claims related to the Code of Conduct and Ethics violations are reviewed by the bank-level Human Rights and Ethics Committee to ensure they are properly handled and remediation plans are established.

At Ameriabank, an independent Service Quality Assurance department manages customer claims, oversees the entire process, and initiates process improvements. As the second line of defence, it also reviews proposed changes to products, services and tariffs to prevent adverse client impacts.

Recurring claims potentially indicating a systemic issue, as well as whistleblower reports, are investigated and reported quarterly to the Audit Committee.

Group Companies ensure that related party transactions follow the "arm's length" principle as defined by their respective regulators. Transaction terms are predetermined under special internal acts, with deviations requiring Supervisory Board approval. At Bank of Georgia, certain cases - such as aggregate risk positions exceeding GEL 500,000 with respect to a single related party, or collateral replacement - also require Supervisory Board approval. The Supervisory Board receives quarterly reports to monitor these transactions.

Financial crime risk

Financial crime risk is the risk of knowingly or unknowingly facilitating illegal activity, including money laundering, fraud, bribery and corruption, tax evasion, sanctions evasion, the financing of terrorism and/ or proliferation, through the Group.

Key drivers and developments

Financial crime risks continue evolving globally, with the Group facing stringent regulatory and supervisory requirements. The Group is committed to protecting financial system integrity, safeguarding customers, and combating financial crime through ongoing investments in expertise, tools and systems.

Georgia and Armenia's geographical location and regional geopolitical context necessitate an elevated focus on sanctions compliance for financial institutions. This proximity increases the potential for sanctioned entities to attempt to exploit Georgian and Armenian financial systems to circumvent international restrictions. Consequently, Group Companies have strengthened compliance frameworks and enhanced due diligence measures to proactively identify, manage and mitigate these risks.

Mitigation

Governance: Within Group Companies, the second line of defence, comprising risk management units, develops policies, standards, guidelines and compliance systems; monitors sanctions evasion and money laundering/terrorist financing (ML/TF) risks; and oversees related risk management processes. Within each principal subsidiary, the Anti-money Laundering (AML) and Sanctions Compliance department includes a dedicated assurance unit responsible for regularly assessing the effectiveness of the bank-wide controls. The third line of defence - Internal Audit functions - independently assesses AML and sanctions compliance to ensure regulatory adherence and safeguard financial integrity.

Bank of Georgia has also established an AML/Sanctions Compliance Committee to provide ongoing oversight of ML, TF and sanctions risks.

Tax risk is managed by dedicated tax functions across Group Companies. Lion Finance Group PLC has adopted a Tax Strategy applicable to itself and its UK subsidiaries, with its principles consistently applied throughout the Group.

Risk appetite: The Group operates a comprehensive financial crime risk management programme designed to prevent its use for criminal and terrorist activities and to protect its reputation.

This programme is operationalised at the subsidiary level through defined risk appetites, which are approved by the respective Supervisory Boards. This ensures that all business units, support functions and subsidiaries assess the impact of their activities on the Group's risk profile and act in line with its established principles.

Monitoring and reporting: Active monitoring and timely reporting of financial crime risks are central to the effectiveness of the programme. Key risk exposures related to AML/CFT and sanctions are reported monthly to Executive Management. Formal reports are also presented quarterly to both the Audit Committee and the Risk Committee, ensuring robust Board-level oversight. These reports utilise both quantitative and qualitative dashboards to track the effectiveness of controls and inform timely risk mitigation actions.

Anti-money laundering: Group Companies maintain risk-based AML/CFT frameworks aligned with local and relevant foreign legislation, incorporating international standards and recommendations set by the Financial Action Task Force and other relevant global bodies.

The Group has deployed significant resources to enhance its ML/TF risk management capabilities, including the use of advanced analytics and transaction monitoring tools, as well as enhancements to offline reporting mechanisms. The reporting processes for Cash Transaction Reports and Suspicious Transaction Reports are fully automated.

Mandatory employee training programmes have been intensified to improve awareness and understanding of AML/CFT obligations. AML risk appetite metrics are closely monitored and regularly reviewed within Group Companies to ensure alignment with their defined risk tolerance.

Bribery and corruption: The Group is committed to preventing bribery and corruption through robust policies, processes and controls, maintaining a zero-tolerance approach to non-compliance with its ABCF policies. Beyond ABCF compliance, the Group also follows a Code of Conduct and Ethics, serving as an employee reference. To uphold these standards, Group Companies ensure that all employees complete mandatory training on Anti-Bribery and Corruption. As a minimum requirement across the Group, this training is completed during the employee onboarding process, establishing a baseline of understanding and accountability from the outset of employment. At Bank of Georgia, this framework is further strengthened by biennial refresher training, which includes a comprehension test and a signed acknowledgment to reinforce accountability.

Sanctions compliance: The Group maintains comprehensive policies, procedures and risk mitigation measures to comply with international sanctions frameworks enforced by key jurisdictions and bodies such as the US Office of Foreign Assets Control (OFAC), the EU, the UK (HM Treasury) and UN Security Council. These protocols undergo routine evaluations to ensure alignment with current sanctions regimes. The Group upholds a stringent zero-tolerance policy towards sanctioned individuals, transactions and funds associated with sanctioned entities, and any clients or transactions connected to the Russian military-industrial base.

The Group has enhanced due diligence processes to address rapidly evolving sanctions regimes, strengthening transaction screening, monitoring, onboarding and documentation review. The Group's technology-driven approach includes an online solution that fully automates the screening of all transactions against sanctions lists from OFAC, the EU, the UK, the UN and other global databases.

The Group continues to strengthen its AML/CFT control framework by enhancing its sanctions screening capabilities, supporting the effectiveness of its broader financial crime prevention efforts.

Due diligence: The Group continuously improves customer due diligence and transaction monitoring, encompassing risk-based scenario monitoring, alert handling and suspicious activity reporting. Group-wide AML/CFT and sanctions risk assessments evaluate inherent risk, control effectiveness and residual risk. Automated customer risk assessment ensures comprehensive risk management throughout the business relationship lifecycle. Group Companies conduct rigorous, periodic due diligence on their existing client base. During onboarding, detailed information on corporate clients' ownership structures, ultimate beneficial owners, and sources of funds and wealth is gathered.

High-risk clients, including politically exposed persons and virtual asset service providers, those subject to adverse media coverage or performing unusual or cryptocurrency-related transactions, or those living and working in countries or sectors with an inherently higher risk of financial crime, undergo enhanced due diligence. To mitigate risks associated with cryptocurrency, the Group has restricted international transactions involving virtual assets or virtual asset service providers.

Fraud risk: To mitigate fraud risk, the Group implements:

·      Know Your Employee procedures, including screening requirements at recruitment, employment and departure stages, providing a clear understanding of an employee's background and actual or potential conflicts of interest.

·      Mandatory training for all new employees to increase awareness.

·      Communication channels informing customers about fraud risks.

Information security and data protection risks

Information security risk is the risk of loss of confidentiality, integrity, and/or availability of information, data, and/ or information systems. Data protection risk is the risk of failure to process personal data lawfully, fairly, transparently, and securely. This includes risks associated with unauthorised access, accidental or unlawful destruction, loss, alteration, or disclosure of personal data, as well as risks arising from the use of emerging technologies and third-party service providers. Both risks may lead to financial loss, regulatory sanctions, litigation, reputational damage, or other significant adverse economic or social impacts.

Key drivers and developments

Information security risks are a growing global threat, particularly for the financial services sector. Successful attacks could impact the Group's customers, employees, subsidiaries, and partners. Potential negative impacts include data breaches, financial losses, regulatory penalties and reputational damage.

Malicious actors focus on:

·      Zero-day attacks exploiting previously unknown vulnerabilities.

·      Sophisticated brand impersonation attacks.

·      Targeting systems where the Group lacks direct cybersecurity control (customer and third-party systems).

·      Employee non-compliance with policies, procedures and technical controls.

Due to Bank of Georgia's role as part of Georgia's critical infrastructure and Ameriabank's leading position in Armenia, attacks could have national-level impacts. The Group's relationships with international customers and partners mean these risks could extend beyond Georgia and Armenia, resulting in regulatory and contractual liabilities, reputational damage and financial losses. Positively, the Group's robust practices protect customers' rights and build trust, contributing to greater financial inclusion and digital security.

Group Companies successfully completed their ISO 27001 certification journey (an international standard for information security management) and acquired the certificate in 2025 and successfully passed surveillance audit in 2026, demonstrating their strong commitment to robust information security management practices.

Data protection continues to be driven by increasing digitalisation, growing customer expectations regarding privacy and transparency, and an evolving legal and regulatory environment. During the reporting period, Group Companies continued to enhance their privacy governance frameworks in response to:

·      increasing regulatory expectations and supervisory scrutiny regarding accountability and governance of personal data processing;

·      expanding use of digital channels and technologies, resulting in larger volumes of personal data processing;

·      increasing reliance on third-party service providers and cross-border data processing arrangements;

·      emerging risks associated with Artificial Intelligence (AI), including transparency, fairness, explainability, and the use of personal data in AI-enabled solutions; and

·      evolving cyber threats that could result in personal data breaches and associated regulatory obligations.

The Group considers the effective protection of personal data fundamental to maintaining customer trust, protecting individuals' rights, and supporting sustainable digital transformation and responsible innovation.

Mitigation

Governance: Within Group Companies, Information Security functions serve as the first line of defence. They adhere to internal policies and procedures, conducting routine risk assessments, vulnerability scans and penetration tests to identify system and infrastructure vulnerabilities. This work prevents unauthorised access and enables real-time monitoring for prompt detection and response to security incidents. The Risk functions act as the second line of defence applying a common approach across the Group structured around the identification, analysis, evaluation, treatment, monitoring and reporting of information security risks. At Bank of Georgia, this includes assessing the design and operational effectiveness of security controls; at Ameriabank, this is delivered through the IT and Information Security Risk Management Program, with particular emphasis on monitoring, reassessment and reporting. Risk units provide oversight, guidance and support to business units, ensuring information security risks are effectively identified, assessed and managed, and monitoring compliance with internal policies and external regulations.

The Group's privacy management framework is designed to comply with applicable data protection laws and regulations in the jurisdictions in which Group entities operate, including the Georgian Law on Personal Data Protection, the Law of the Republic of Armenia on Personal Data Protection and, where applicable, the EU General Data Protection Regulation (GDPR). The framework is based on a risk-based approach to the management of personal data processing activities, enabling the Group to identify, assess and mitigate privacy risks while supporting the responsible processing of personal data.

Data protection governance is driven from the highest levels across the Group, with established processes for ensuring Board-level oversight. While the principle is consistent, the specific reporting structures are tailored to each subsidiary's governance model. At Bank of Georgia, this involves dedicated quarterly reporting to the Audit Committee and a comprehensive annual review of the privacy programme by the Supervisory Board. At Ameriabank, oversight is achieved through quarterly reports to the respective Supervisory Board as part of the broader IT and Information Security risk overview.

The day-to-day responsibility for implementing privacy policies is also clearly defined within each Group Company. Bank of Georgia employs a distinct three lines of defence model, where business units act as the first line, supported by a specialised Privacy Office, led by the Data Protection Officer (DPO), which functions as the second line. At Ameriabank, these responsibilities are collectively managed by the Information Security, Technical Security and Legal departments, which oversee the implementation and updating of privacy policies.

Risk appetite: Information security risk is measured against predefined risk appetite metrics and thresholds to minimise data and security breach exposure. Risk profiles are monitored monthly against appetite and reported to local Executive Management on at least a quarterly basis, and quarterly to Supervisory Boards.

Monitoring and reporting: Internal Audit functions provide risk-based independent assurance on risk management adequacy and effectiveness. Information security appears regularly on Risk Committee agendas, and Group Companies engage external parties for regular cybersecurity audits and penetration tests.

Zero-day attacks: Group Companies monitor zero-day vulnerability announcements affecting their systems, addressing them promptly when detected. They employ a "defence in depth" approach with multiple complementary security layers that activate when others fail. Bank of Georgia has a dedicated team for threat intelligence sharing and building external relationships. As a member of the Financial Services Information Sharing and Analysis Centre, it accesses a threat intelligence platform and a trusted network of experts to anticipate and respond to threats, strengthening its cybersecurity posture and reflecting a proactive approach to managing risks.

Customer-targeted phishing: Malicious actors may carry out successful customer-targeted phishing attacks through fake websites, social networks, emails and other channels. Group Companies enhance information security controls to detect unauthorised account access and run awareness campaigns helping customers and the public recognise and respond to phishing attempts.

Supply chain cyber attack: Group Companies perform third-party provider due diligence, ensuring security and data protection controls before engagement and conducting annual compliance monitoring. Exit procedures protect information confidentiality, integrity and availability.

Employee policy adherence: Annual mandatory information security training for all employees includes tailored remote work security courses. Group Companies conduct quarterly phishing campaigns testing employee detection and response capabilities.

Access management: Group Companies implement role-based access control, automating employee onboarding and rotation processes while restricting network access based on least privilege principles. Semi-annual privileged user evaluations and annual access rights reviews occur in each department. Third parties receive privileged access only with justified business needs, requiring multi-factor authentication and privileged access management monitoring.

Information security incident response: To mitigate key risks, Group Companies have aligned their incident response plans with industry standards - following the National Institute of Standards and Technology (NIST) Computer Security Incident Handling Guide. Group Companies have strengthened their defences with vandal-resistant backup storage to protect core database backups from internal and external threats.

Annually, Bank of Georgia and Ameriabank each undergo at least ten security assessments to evaluate actions and manage risks, including:

·      Penetration testing

·      Breach and attack simulation

·      Distributed denial-of-service (DDoS) attack simulation

·      Self-assessments

·      Internal and external audits

These assessments give insight into how effectively the policies and processes have been implemented.

Personal data protection: Group Companies have responded to changes in respective jurisdictions by implementing enhanced data protection measures, including policy updates, process reviews, training programmes and customer communication. During the reporting period, Group Companies continued to strengthen their privacy governance frameworks and enhance organisational awareness of data protection obligations. Ongoing investment in privacy governance, employee awareness, and responsible technology practices contributes to reducing data protection risks and supporting the long-term trust of customers, employees, shareholders, and regulators.

Operational risk

Operational risk is the risk of financial and/or non-financial loss from inadequate and/or failed internal processes, people, systems, or from external events. This includes human capital risk: the potential for ineffective human capital policies or processes to cause operational disruption, financial loss and reputational damage, and hinder the delivery of strategic objectives.

Operational losses may result from:

·      Internal fraud

·      External fraud

·      Business disruption and system failures

·      Employment practices and workplace safety

·      Clients, products and business practices

·      Physical asset damage

·      Execution, delivery and process management

·      Third party risks

Key drivers and developments

Rapidly evolving customer expectations and technological advancement continue to reshape banking business models, introducing new and increasingly complex operational risks. The rapid pace of change and the need for innovation demand new technologies and careful management of technology deployment. Artificial intelligence in particular, and its accelerating adoption across the financial services sector, gives rise to heightened exposure to automated errors that may be difficult to detect and costly to remediate. The Group recognises the importance of establishing robust AI governance frameworks and appropriate human oversight mechanisms in line with the pace of deployment.

As the digitisation of core business processes accelerates, operational resilience has become increasingly critical. Significant disruptions to vital services can cause material financial loss, reputational damage and business continuity threats. The increasing use of AI across the financial services sector introduces new dimensions of risk, with AI-assisted cyberattacks - including advanced phishing and automated vulnerability exploitation - presenting evolving threats to operational stability.  As business processes become increasingly automated and interconnected, the potential for disruptions to propagate rapidly across critical systems has increased. Dependencies on third-party technology providers and outsourced services represent an additional source of vulnerability within this environment. Operational resilience will continue to gain importance as technology increasingly shapes financial service provision.

Employees remain crucial to the Group's success, supporting innovation and growth. To bolster digital capabilities and AI-driven decision-making, the Group prioritises attracting and retaining skilled talent and developing leaders for succession planning.

Mitigation

Governance: For Group Companies, the first line of defence consists of structural units responsible for identifying and assessing operational risks and establishing appropriate controls to mitigate them. Operational risk management units form the second line of defence, providing oversight and risk guidance. Internal Audit functions serve as the third line, independently assessing operational risk and events in business processes.

Human Capital Management functions within Group Companies develop policies and frameworks for risk management and legal compliance, monitoring and reporting human capital risks to the respective Executive Management and Supervisory Boards as well as to the Group's Board of Directors.

Risk appetite: Group Companies have established operational risk appetites. Bank of Georgia also has a Supervisory Board-approved human capital risk appetite at the bank level. Risk profiles are monitored against these appetites and reported to local Executive Management on at least a quarterly basis, and quarterly to the respective Supervisory Boards.

Monitoring and reporting:

Group Companies monitor operational risks on an ongoing basis using a range of quantitative and qualitative indicators, including operational loss data, which is captured and analysed to identify trends and patterns in operational risk exposures; risk and control self-assessments (RCSAs), through which risks are proactively identified and associated controls are evaluated; key risk indicators (KRIs), which provide early warning signals of emerging or elevated risk exposures; new product and change assessments, which evaluate potential operational risks associated with new products, services, and significant business changes prior to implementation; and third-party risk assessments, which support the identification and oversight of risks arising from vendor and outsourced service provider relationships. Regular standalone reports are provided to senior management and relevant governance bodies to support oversight of the operational risk profile, facilitate the timely escalation of material incidents and emerging risks, and assess compliance with the risk appetite and tolerance framework.

 

Group Companies implement policies, procedures, and frameworks to anticipate, mitigate, control, and communicate operational risks and assess internal control effectiveness. Operational risk management units maintain these frameworks and policies, which are reviewed and approved by relevant governance bodies to ensure alignment with recognised industry standards.

The following programmes and processes form the core of the operational risk management framework:

·      Risk and control self-assessment (RCSA) - identifies and assesses operational risks in business processes and products, providing a structured view of risk and control environment across the Group. RCSA programme supports proactive risk management by facilitating the early identification of emerging risks and control weaknesses before they materialise into operational losses, ensuring that the Group's risk profile remains within defined appetite and tolerance boundaries.

·      New product and change assessment - identifies and assesses potential operational risks associated with new products, services, systems and significant business or operational changes prior to implementation. By embedding risk assessment into the design and approval process, the programme ensures that operational risks are considered and addressed before new products or changes are introduced, with recommendations for risk mitigation incorporated into the product design and change management phases. This proactive approach supports reduction of operational disruption arising from inadequately assessed or poorly implemented change.

·      Third-party risk management - identifies and manages risks arising from third-party and outsourcing arrangements through risk-based vendor onboarding and due diligence, regular risk assessment and monitoring, and enhanced oversight of critical service providers, including business continuity and disaster recovery coverage.

·      Incident management, monitoring and reporting - operational risk incidents and near misses are identified, assessed, and remediated through a structured incident management process. Upon identification, incidents are classified, escalated in accordance with defined severity thresholds, and subject to root-cause analysis to determine the underlying drivers of failure and prevent recurrence. The findings of root-cause analysis drive targeted remediation actions and, where relevant, broader enhancements to controls and processes. Regular reporting by the Risk function to senior management and relevant governance bodies supports oversight of the operational risk profile against the risk appetite and tolerance framework.

·      Operational resilience - the Group maintains a dedicated operational resilience framework designed to ensure that critical business services can withstand, adapt to, and recover from severe but plausible disruption scenarios. The framework encompasses the identification of critical business services, the assessment of potential impacts arising from their disruption, and the establishment of recovery objectives to ensure timely restoration of services. Resilience arrangements are tested regularly against a range of disruption scenarios, with outcomes reviewed by senior management and used to drive the continuous enhancement of the Group's resilience capabilities.

·      Risk awareness and training programmes, including awareness campaigns and mandatory training - to help employees identify existing and potential risks.

Within this broad category, a dedicated focus is placed on human capital risk. This is monitored through its own set of quantitative and qualitative indicators, including employee interviews, eNPS, engagement scores, internal mobility, and retention and employee turnover measures. The results of different surveys and measures are used to design action plans.

To manage human capital risk, the Group employs a multi-faceted strategy focused on talent acquisition, leadership development, competitive compensation, and transparent employee relations.

·      Talent acquisition and early career development: The Group actively engages with universities and communities to attract new talent, holding recruitment events across Georgia and Armenia. This is complemented by flagship internship programmes designed to build a strong talent pipeline providing young talents with project experience, mentorship, and clear career paths, achieving high post-internship hire rates.

·      Succession planning and internal growth: A strong emphasis is placed on developing leaders from within, which is reflected in high internal mobility rates that are filling open roles. The Group invests in a robust leadership pipeline through tailored development initiatives, including individual coaching, high-potential talent programmes, and an MBA Sponsorship Programme. Formal succession planning is in place for critical executive roles, ensuring leadership continuity. Employee development is further supported by a performance management framework that includes 360° evaluations and annual development plans.

·      Compensation, benefits, and work-life balance: Compensation is designed to be competitive and fair, using market data and standardised grading systems to ensure position-based pay. The employee value proposition is enhanced by comprehensive benefits that support wellbeing and work-life balance. These include fully or partially funded health insurance for employees and their families, additional paid leave, extensive paid parental leave, and hybrid working arrangements for most back-office employees.

·      Transparent communication and grievance mechanisms: The Group fosters a culture of open dialogue through "Employee Voice" meetings, which provide a direct channel for employees to share ideas and concerns with the Board. This is supported by formal and confidential grievance policies and independent reporting tools, all underpinned by a strict no-retaliation policy to ensure prompt and fair issue resolution.

·      Technology capability and AI literacy: The Group runs dedicated learning initiatives, establishing foundational digital fluency and progressively developing employees' AI capabilities. These programmes support four objectives: maintaining productivity relative to AI-augmented peers and competitors; strengthening human oversight of AI-generated outputs; enabling employees to critically evaluate automated tools and their limitations; and supporting workforce adaptation as roles are redesigned around new technologies.

Model risk

Model risk arises from decisions based on incorrect model results due to inaccurate assumptions, inappropriate variables, low-quality data, or inadequacies in model design, implementation or usage.

Key drivers and developments

As banking operations become more complex and digital, the adoption of statistical models, machine learning and artificial intelligence enhances decision-making and provides competitive intelligence. To sustain these benefits, sound model risk assessment frameworks and validation practices are essential.

The NBG's regulation - Managing Risks for Data-based Statistical, Artificial Intelligence and Machine Learning Models - sets additional requirements for model development, validation, monitoring and application. The regulation requires that all relevant new and existing models be in line with regulatory requirements.

Given the increasing use of AI-driven models at Bank of Georgia, particular attention is paid to the oversight and mitigation of AI-related risks. To ensure effective oversight of AI, Bank of Georgia maintains internal policies and procedures governing AI usage, which outline clear guidelines for model development, validation, implementation, monitoring and compliance with regulatory standards.

Since 2025, Bank of Georgia has been expanding its use of artificial intelligence by beginning to implement generative AI and Large Language Models (LLMs). The introduction of these advanced models is conducted under the Bank's robust model risk management framework. This ensures that each model undergoes thorough validation and is subject to stringent controls, in full compliance with the established principles. While the current framework provides a solid foundation, the Bank is working on its further enhancement to specifically address the unique characteristics and risks of generative models.

The CBA's regulation regarding model risk management requires banks to have procedures and processes covering the full lifecycle of internal models, including evaluation, development, validation, approval, performance monitoring and adjustments, as needed.

Mitigation

Group Companies have their Model Risk Management Frameworks (MRM) continuously reviewed and refined to address key model risks effectively. The MRM Policies outline:

·      Three lines of defence: A clear segregation of roles and responsibilities throughout the model lifecycle and model inventory governance among model owners (first line), an independent MRM function (second line) and Internal Audit (third line).

·      Key controls: Standards covering model development, documentation, validation, monitoring, revalidation, backtesting, as well as comprehensive model risk assessment and reporting. They also encompass the critical areas of model inventory management and data integrity, with the specific implementation and level of centralisation tailored to each subsidiary's current operational model.

In 2023, Bank of Georgia enhanced its MRM framework in collaboration with McKinsey & Company, aligning it with industry best practices and evolving regulatory requirements.

Governance: Within Group Companies, model owners within the first line of defence are responsible for the development, implementation, operation and contribution to model monitoring.

The second line of defence - independent from the units that develop or use the models - is responsible for model validation, performance oversight, independent challenge of model adequacy and ensuring compliance with regulatory requirements.

Clearly defined roles and the existence of independent validation functions within Group Companies ensure effective risk mitigation.

Monitoring and reporting: Material model-related issues within Group Companies are subject to a robust oversight process, requiring approval from the respective Chief Risk Officers (CROs) before being reported to the Supervisory Boards.

Group Companies conduct continuous monitoring of model performance. At Bank of Georgia, this involves a systematic collection of performance metrics within a centralised monitoring system. The health of the models is ensured with model owners overseeing performance and model validators supervising the process, which includes regular reviews and escalation as needed.

Model risk mitigation: Group Companies employ similar strategies for model risk mitigation:

·      Model redevelopment: Models are refined or redeveloped in response to changes in market conditions, business assumptions or processes, to maintain accuracy and relevance.

·      Adjustments to model outputs: Adjustments, including expert-opinion-based revisions or the application of new restrictions, are made to improve model accuracy and address biases or limitations.

·      Process enhancements: Additional controls or validation measures are introduced to further reduce model risk.

Strategic risk

Strategic risk is the risk that the Group will be unable to execute its business strategy and create stakeholder value due to poor decision making, ineffective resource allocation, and/or a delayed and/or ineffective response to changes in the external environment.

Key drivers and developments

The Group faces strategic risks from changes in legal, regulatory, macroeconomic and competitive environments. Economic uncertainty, the rise of global fintech, and increased competition in financial services have altered stakeholder expectations, necessitating forward-looking strategic risk management.

The Group's 2024 expansion into Armenia through its subsidiary Ameriabank added a new geographic dimension to its operational footprint. This diversification introduces additional risks that require proactive monitoring and mitigation. Managing the Group across two diversified markets is strategically more complex and requires active involvement from Executive Management to ensure effective coordination across the Group, the realisation of expected synergies, and operational alignment in pursuit of the Group's strategy.  Group-level risk management and strategic alignment remain a key focus of the Group's Executive Management and a regular topic of discussion at the Board level.

Mitigation

Strategic planning: The Group's Executive Management runs an annual strategic planning process to review its performance against targets, discuss the internal and external environment affecting the Group's subsidiaries, and develop short- and medium-term strategic plans considering potential financial and non-financial risks. This process is supported by risk appetite framework, capital plans and a recovery plan. The Group's strategy is ultimately approved by the Group's Board of Directors.

Focus on customers and innovation: The Group mitigates strategic risks by incorporating customer feedback in decision-making and scanning global competitive landscape to ensure relevant, innovative products and offerings, addressing current needs while creating foundations for future client growth.

Monitoring: The Group's Executive Management holds regular meetings to discuss the performance of the Group's core subsidiaries, the competitive landscape, and their competitive positions, including any changes versus prior periods and any actions required. Key strategic areas and/or projects are periodically discussed in working groups comprising executive, senior and middle management.

Strategic objectives and/or decisions, including major organisational changes and initiatives, are regularly discussed with and challenged by the Board, including during the quarterly Board meetings and the Board's strategy sessions. The Board receives quarterly updates on market environment and competitive positioning of principal operating entities in Georgia and Armenia and challenges management's tactical or strategic actions.

The Group has a dedicated International Business function with executive responsibility over monitoring and coordination of activities with the operating entities outside of Georgia. The International Business function does not replace or interfere in day-to-day executive management of the Group's subsidiaries, other than as necessary for meeting either legal and regulatory, or internal policy requirements applicable to the Group as a whole or on a consolidated basis.

Reputational risk

Reputational risk is the risk of damage to stakeholder trust and/or brand image due to negative consequences arising from internal actions and/or external events.

Key drivers and developments

The Group's operations face inherent reputational risk, primarily driven by internal execution failures, cyber and phishing case mismanagement, and misalignment between Group values and public perceptions/opinions.

Mitigation

Risk appetite: Group Companies manage reputational risk within a defined risk appetite that is articulated through quantitative measures. The reputational risk profile is subject to quarterly review and oversight by the Supervisory Boards of the respective Group Companies.

Monitoring and reporting: Effective systems and controls ensure high customer service levels and compliance. Material risks at any business level are measured, mitigated and monitored according to Group policies and procedures.

To protect brand strength, marketing/PR teams within Group Companies monitor daily media coverage. Legal teams ensure marketing communications comply with internal policies and review product/ service compliance. Group Companies regularly measure customer satisfaction and perception through internal and external surveys and monitor risk appetite compliance with performance reported to Executive Management on at least a quarterly basis.

Group Companies also engage with customers on information security matters, disseminating content including articles, direct emails, interactive games, and questionnaires through various media. Bank of Georgia and Ameriabank contribute to the development of information security in Georgia and Armenia respectively by regularly participating in collaborative efforts with financial industry peers, law enforcement authorities, regulatory bodies and the governments, sharing knowledge and preventing negative impacts.

To prevent inaccurate or misleading reporting that could damage the Group's reputation, well-documented reporting processes with strong controls ensure fairness and transparency. Oversight from the Board as well as the External Auditor ensures the Group's financial and narrative reporting is trustworthy.

Climate-related risk

The Group has identified climate risk as an emerging risk and continues to assess climate-related risks, both transition and physical, for its client base, and determines potential impacts on the Group.

Climate-related risk is the risk of financial loss and/or damage to the Group's reputation as a result of the accelerating transition to a lower-carbon economy and/or the materialisation of actual physical damage as a result of acute and/or chronic weather events. Transition and physical risks may impact the performance and financial position of the Group's customers and, hence, their ability to repay loans.

Key drivers and developments

The Group's stakeholders, including investors and lenders, are increasingly demanding more climate-related disclosures - including climate risk assessments and GHG emissions reporting - as well as actions to address climate-related risks.

The Group is subject to climate reporting obligations under both the UK Financial Conduct Authority's Listing Rules and Sections 414CA and 414 CB of the UK Companies Act 2006.

In 2020, the Group identified climate change as an emerging risk and incorporated it into its risk inventory. Since then, significant progress has been made in developing the management framework for this risk. Notably, the Group has developed a climate scenario analysis toolkit to model the impact of climate risks on its credit portfolio and has continued to strengthen climate-related considerations within its credit risk management processes.

Both Georgia and Armenia have submitted their Nationally Determined Contributions (NDC) as part of the Paris Agreement. In April 2026, Georgia updated its NDC, committing to limit total net greenhouse gas emissions by 47% below 1990 levels by 2030, with an enhanced target of 50% below 1990 levels by 2035. Armenia targets a 40% reduction by 2030, using the same 1990 baseline. Georgia has also adopted a long-term low-emission development strategy, identifying carbon neutrality by 2050 as a key long-term objective. The updated NDC strengthens the country's mitigation ambition and establishes its medium-term climate commitments through 2035.

In March 2025, the National Bank of Georgia (NBG) launched the second phase of its Sustainable Finance Roadmap (2025-2028), introducing several updates to the country's sustainable finance framework. Bank of Georgia has already implemented a number of the roadmap's initiatives and continues to align its practices with the planned measures to support their full implementation by 2028.

Mitigation

Governance: The Group's Board of Directors has ultimate responsibility for overseeing climate-related risks and opportunities and ensuring their integration into the strategy and risk management of the Group Companies. Since 2022, the Board and its committees - including the Risk, Audit, Remuneration and Nomination Committees - have regularly reviewed climate-related issues, ensuring ongoing and effective oversight.

The Environmental and Social Impact (ESI) Committee at Bank of Georgia, comprising executive and senior management, is responsible for overseeing the Bank's climate, environmental and social impacts - focusing mainly on those arising from its lending activities. It holds overall responsibility for designing climate, environmental and social strategies and policies, and setting and monitoring targets. The final responsibility for decisions made by the ESI Committee rests with the Supervisory Board.

In 2025, Ameriabank initiated the development of a dedicated Sustainability and Climate Competence (SCC) function, which is expected to become fully operational by the end of 2026. The SCC function will support the identification, assessment, and monitoring of sustainability and climate-related risks and opportunities, while strengthening sustainability governance, strategic decision-making, and disclosure processes.

Centralised teams of Environmental, Social and Climate Risk specialists within Group Companies' Risk functions are responsible for:

·      Conducting research on climate, environmental, and social-related matters (policies, risk mitigation and assessment methods, etc.)

·      Implementing and updating environmental and social policies, procedures and methods.

·      Identifying, assessing, managing and mitigating climate, environmental and social risks for the Group Companies' clients, based on a standardised due diligence process.

·      Identifying climate-related opportunities and classifying green loans.

·      Calculating financed emissions and supporting other departments to implement environmental and climate-related tasks.

·      Preparing environmental and climate-related disclosures.

Climate-related risks mitigation: Group Companies have adopted the following mitigating activities for climate-related risk management framework:

·      Identifying and addressing sector and location-specific climate risks for business clients, as part of loan appraisal and origination processes, as well as the environmental and social risk management process.

·      Expanding our climate scenario analysis toolkit and deepening our knowledge of climate change and climate policy in Georgia and Armenia and the global implications.

·      Assessing the materiality of climate risks on the banks' portfolios against selected climate change scenarios; developing a climate risk stress-testing framework and conducting high-level climate stress-testing to assess potential climate-related vulnerabilities across the portfolio and to support the bank's understanding of climate risks.

·      Facilitating climate-related disclosure.

·      Raising climate finance awareness among clients and implementing training for employees.

Moreover, Bank of Georgia has integrated climate-related risks into its risk management framework and business resilience assessments. Its mitigating activities also include:

·      Collecting relevant data, including on output produced and energy consumed, and calculating Scope 3 financed emissions for some GHG-intensive corporate clients.

·      Identifying and reporting on transactions aligned with the NBG's Green Taxonomy (from January 2023).

·      Developing sectoral E&S policies to address specific high-risk industries which may have high adverse impact on people and/or the environment. Bank of Georgia is committed to working closely with clients, especially those in high-emission industries, to support their shift towards sustainable practices by tackling issues like data limitations, technical capacity and access to funding.

Ameriabank contributes to a sustainable economy through three core activities: implementing robust Environmental and Social (E&S) risk management processes for clients in line with IFI standards; ensuring transparency through public reporting; and financing a dedicated portfolio of green assets.

Historically, Ameriabank applied its Green Bond Framework to identify and assess green loans in accordance with international standards. Following the adoption of the Group Green Finance Framework (GFF), this now serves as the primary basis for identifying and reporting green financing activities.

In 2025, Armenia introduced a national green taxonomy, which is not yet mandatory for financial institutions. The GFF will be updated to reflect this taxonomy and related legislative developments, ensuring continued regulatory alignment, transparency and consistency across the Group.

 

 

Statement of directors' responsibilities

We, the Directors, confirm that to the best of our knowledge:

•	The interim condensed consolidated financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority and the International Accounting Standard 34 "Interim Financial Reporting", as issued by the International Accounting Standards Board ("IASB") and as adopted by the United Kingdom and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;
•	This Results Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and a description of principal risks and uncertainties for the remaining six months of the year); and
•	This Results Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

 

 

Signed on behalf of the Board by:

 

Archil Gachechiladze

Chief Executive Officer

 

 

 

10 August 2026

 

 

 

The Board of Directors of Lion Finance Group PLC:

 

Non-Executive Chairman: Mel Carvill

Executive Director: Archil Gachechiladze

Non-Executive Directors:

Andrew McIntyre

Armen Orujyan

Cecil Quillen

Karine Hirn

Maria Gordon

Mariam Megvinetukhutsesi

Tamaz Georgadze

Véronique McCarroll