Lion Finance Group PLC (BGEO) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Bank of Georgia Group plc's results call. My name is Nini Arshakuni. I'm Head of Investor Relations, and I'll moderate this call. Today, we'll be presenting the group's preliminary financial results for the fourth quarter and the full year of 2022. And we'll start as usual with an overview of the performance, which will be presented by the CEO, Archil Gachechiladze. And afterwards, we'll take your questions. And now we'll be handing over to Archil.

We'll let me jump to the presentation, share the presentation call through it, and then we'll go to Q&A session, which is usually probably the most interesting part of the presentation. So we had finished the year with very strong results. You may have already seen it, our profit for the quarter was PLN 326 million, which was up 62.4% year-on-year with a return on equity of 33.7% and cost income was 31%. This is third quarter in a row that we have delivered return equity higher than cost income, which is just a fun fact. On an annual basis, the net profit was up by 55.7%, PLN 1.132 billion. Overall, return on equity of 32.4% and cost/income of 32%. So for the full year also, we had higher return on equity than cost income. Also very important is that our Net Promoter Score is high at 58%, slightly down from the peak of 60. But overall, I think, is keeping the trend of increasing that and the focus of customer inception and monthly active users of our digital application is up by 31.5% year-on-year, which really is where all of these numbers are coming from, not only this one, but it's one of the metrics that we drive the success of our franchise. So with that, let me summarize a few things about the macro economy then I'll talk on the update of our strategy like we do usually on a quarterly quarter calls. And then after that, I'll share the results and a few numbers from the results -- financial results. The year continued with very strong performance. We have enjoyed double-digit growth in 2021 at 10.5% and 2022 ended at 10.1% estimate. At this point, the fourth quarter was 9.5% real growth. So all in all, I think to even very strong growth. That was underpinned by strong growth in exports, which, in December, in fact, was up 32%, which was strong. But previous ones, were also not bad. Remittances were strong. In December, we ended it with 133% up. Imports also increased in the fourth quarter, it was about 30%. And the tourist inflows, which includes the migrants as well was -- we are comparing it to the peak 2019 revenue, and we ended it -- we surpassed it and the last quarter was well above the 100%, which was 2019 peak in dollar terms and December ended with 167%. All in all, it was up roughly about 45% for the full year versus 2019, again, if that was clear. So as I mentioned, 2 years in a row of real growth of double-digit well growth. And 2023, we are expecting 4.8% in the year after 5%. This, obviously, have some risks, but also has some upside. And in the upside scenario, we're looking at the above 7% the overcome growth. Now in terms of inflation, inflation and the refinancing rates remains still at a high level. We ended the year with headline CPI of 9.8% and core 6.9%. Inflation continued to decelerate after that. And January ended with 9.4%. So it's headed in the right direction, and it peaked close to 14%, as you can see on the chart. And we are seeing that should continue reduction. PPI, in fact, if I remember right, in January was around 0. So there's no pressure from the wholesale prices on this retail prices. So it should continue to decelerate, but we are -- we do expect the refinancing rate to remain at elevated levels throughout most of 2023. In second half of the year, we may see some reduction, although national bank says that they expect to keep those rates until the end of the year at this point. Georgian lari has done very well over the last year, over the 2022, it has strengthened versus U.S. dollar by 12.5% and is strengthened by -- versus other trading partners as well and the performance was very good. And as you can appreciate, the nominal growth in 2022, because of high real growth and high inflation, was close to 19%. And with a lot of getting stronger, it was very good for our investors who are counting the money in U.S. dollars. So it's a very good year in the transport investors as well. So in terms of Lari getting stronger, we also see that National Bank is increasing the reserves and reserves went up by almost $1 billion this year. And so it reached PLN 4.9 billion at the end of the year. And as you can see, the net purchases were around $100 million per month over the last 5, 6 months, as you can see. So it's very strong purchases enough. And nevertheless, I think lobby has remained very strong overall and strengthened another 1.9% in January in fact. The growth in the banking sector slightly decelerated to 12.1% at the end of the year and of that, and that is on a constant currency basis. If you look at nominal growth because of some of the debt is in dollars and in Lari terms, it's less, the overall growth came to 4.0%, but I think constant currencies growth is really what shows the economic activity. So it's 12.1% well below the nominal growth of the economy. And as you can see, the bank dedollarization of the banking balance sheets is going very well, especially due to the incentives, capital incentives, in fact, introduced by the National Bank 1.5 years ago. So you can see that it is just below 45% on the asset side and the trend is very strong. So I think that risk has gone from the banking sector. The deposit dollarization is also dropping, and it's at 56% at this point. But the loan dollarization in the risk side mainly is below 45%. NPL has remained at a very low level on the 2% in this sector. So all in all, because the nominal growth was so strong and the growth in banking sector because of higher interest rates were high. The growth was not very strong. So denominator increased substantially, and the growth was not as substantial. So we have seen over the last 2 years that the overall leveraging sector in the country of banking assets to banking loans to GDP has dropped to 63 % which basically means that it creates potential for us to grow in the outer years as the rates come down over time. We have also seen the national debt to GDP, which peaked at 60% in 2020, come down below 40% in 2022. And that was also one of the risks that we were looking at over the last couple of years, a couple of years, and that has also -- that risk has been reduced substantially. Also, I think I should also mention one other thing -- which is two other things, in fact. One is that the budget deficit was -- is estimated right now, but it should be within 0.1% -- correction. It should be at 3.1% for 2022, which is already pre decent, given the large deficits that Pujas running in 2020. And then reducing it in '21, but it was well ahead of -- or at least it was much nearer than the original budget. So the tax revenues increased by almost 29.85 % if I remember right, so almost 30%. And that allowed the government to decrease the budget deficit. And I have to underline the fact that although the capital expenditure grew -- expenditure spending grew by 27%, the operating expenses only grew by 8%. So the fiscal discipline of the fog has set for many, many years now is continuing to -- is maintained very well. So that is very good. The current conduct is also narrowed to about 3%, 3.1% estimate for 2022, which is also a very large reduction. So I think macroeconomically not only was the very strong year in terms of growth, but it was growth that was not financed by credit. And in fact, vice versa. So there was a major deleveraging that has happened throughout as well as the deficit error. The national debt is less. The reserves are at the record level and large strengthen. So it was a vry good year economically speaking, for sure. So now a few things that I would like to update you on. This is our strategic priorities that we set out the mobile app payments and loyalty and how to do it was focusing on customers and such an employing environment, strength of our franchise, in terms of the brand and to do a lot in terms of data decision making by data. And all of these to doing very well on profitably. Now this was the focus that we announced in 2019, in fact, so about 3.5 years ago. And we have been delivering on each and every one of those. As you all know that we are putting as a company, a leader in digital banking in the country. We are top of mind bank and most trusted bank in [indiscernible] by a third-party, marketing agencies, so according to third-party market in HSC Research, delivering food profitability about 1% and higher standards of growers and overall ESG. So talking of our retail banking application. The monthly active users went up by 31.5%. And I am very happy about this result. 31% was a very ambitious target that we had was 1 million for the management, and we surpassed it cost ably by 120,000. What makes me very happy also is that our monthly active clients -- overall, our clients grew by 17%. And given our high -- overall high usage of Bank of Georgia products, we thought that, that kind of growth was not possible. But I think as our -- because of our focus on customer satisfaction and the quality of our products, more and more people are using Bank of builder products. There are a lot of double users as well. So basically, people that use Bank of Georgia that used to be using other banks or are still using other banks, but it's still a very, very good number to have 17% growth overall of clients. And in terms of market active users 31% up. Now as you can see, year-on-year, our monthly active users to the total -- our total monthly active customers has gone from 61% to 68.7%. So more and more people that are our customers are using our mobile application, which is of very decent quality, and we are listening to our customers through what they want or what they need to see in our application and continuously improving. Autema also increased so tailing traction from 44% to 47.6%. And today, more than 0.5 million people on a daily basis, use our application. For a small country, it's a very big number. In the fourth quarter, in October, in fact, we launched school up. So application for school kids banking application because they're also in financial services, which has money costs that they can request the money from their parents. It has a piggy bag, it has all kinds of discounts that keeps enjoy, schemes for interaction, et cetera. So we think that this is a very important product for starting the relationship at early age and financial discipline identification is very important. So increasingly, we will be introducing financial education, gamified financial education for kids, and we view it's very important from an ESG point of view to introduce that at a teenage years for kids, and we believe that it will be a big impact overall for the country longer term, but still, it's an important thing for us. In terms of the overall number of transactions, it went up to EUR 90 million from about EUR 70 million, 1 year ago, quote a number of transactions. And notably, mobile paying transactions represent now 58%. So that's the part that is growing the most and nothing is surprising there, and we see that number probably grow further. What's interesting is that our offloading of our sales, so selling our products on a transactional basis, more than 96% is out of the branch. But in terms of selling products being it low deposits cards or different types of products, it's only 40%. And 40% was a big increase in the fourth quarter because we digitalize a number of different products and influenced some other things that we were focused on. So it went up pretty well in the fourth quarter, as you can see here. And in December, it was 44%. So it was strong growth. Nevertheless, we believe that there's more growth to be had there, and we would like to see this number increase over 67% in the next couple of years. In terms of our applications, the internal bank and mobile bank for our business customers. The monthly active digital users went up by 39% on an annual basis to 58,000 customers and number of transactions was up by 32% as well. The quality of our service, which we measure is an internal measure, so we can only compare it to ourselves 1 year ago, the CSAT was up by 5% and 6%. We would like usually to see that more than 80%. And a few years ago, it was not, and we'd like to see that move forward the quality of our services. As you can appreciate, the number of products and the sophistication of services for the legal entities is much higher than for individuals because they use more products. Another line, which is payments, which is also our strategic direction has had a phenomenal growth. Year-on-year, our volume of acquiring business went up by 52.8%. That's for the quarter -- the last quarter. And the market share of the coring went reached more than 50% -- 50.3% and that's up by 7.3% on a year-on-year basis. The market has grown by about 30%, and our business has grown by 52.8%. Moreover, something that we've been watching closely is the number of people using the Bank of Georgia card at least on a monthly basis. So the payment mark so-called, which went up by 33% and surpassed 1 million people. So more than 1 million people in Georgia used Bank of Georgia card on a regular basis and smartly, but most regular basis. So how do we do it is by focusing on customer satisfaction, which you can see the trend over the last 5 years. It's upwards, and we will continue focusing on customer satisfaction, which has become a new region at Bank of Georgia. Now a few words about the numbers, the numbers that are a result of some of the strategic initiatives that I've talked about. We mentioned the return on equity 33.7%. For the full year, 32.4%. Cost of risk for the quarter is 0.9%; and for the year, 0.8%, close already to our long-term range that we expect between 1% and 1.2%. Cost-to-income ratio at 31% for the quarter, 32% for the year. And most importantly, I would say, is that all of this has been achieved with a very, very strong capital ratios. Core Tier 1 ratio of 14.7%. Again, this is by the national standards, and you will see the IFRS numbers very soon, more than 30% above minimum requirements. We had loan growth for the year at 12.9% in constant currency and deposits of 43.2%, very strong growth. And this year, for last 2 quarters already our net loan-to-deposit ratio is well below 100%, first time in history of Bank of Georgia that I remember. So in terms of the income statement, a few numbers that I would like to highlight, net noninterest income of the last quarter was up by 129%. We can only continue this for the next 20 years, it will be nice. And for the full year is up by 99%. So obviously, we have benefited, as you can see for 3 quarters in a row, we have benefited from high FX. It has started to come down slightly. And we will probably see about 1/3 of this number go away, at least that's our expectation. But for the last 3 quarters, we have still enjoyed this slightly longer than we expected, but we don't mind quite any, as you can expect. So also, the operating income overall is up by 54.2%. And for the full year is up by 46.6%, surpassing PLN 2 billion mark, which was also nice. Our operating expenses in the last quarter grew by 20%, which is not low, obviously. But in this high inflationary environment and in the spending business, we thought it was not bad, especially when you look at last 3 quarters and second quarter was up by -- first quarter was up by 29%; second 32%; third quarter up by 26%; and fourth quarter up by 20%. So the trend was nice and that was good. So that has been reflected in the cost income ratio, where we achieved 31%, 1 year ago. As you can see in the fourth quarter of 2021, it was 39.8%. For the full year in this cost/income ratio of 32%. And I would like to remind you that the met mid-term guidance that we had was around 35%. So we are ahead of that guidance, well ahead of the guidance. Loan portfolio and deposit portfolio we discussed. In nominal terms, it was less, so 4.3% only. While in constant currency, it was 12.9%. Fourth quarter was not bad, in fact. It was pretty good for us, but overall, banks, et cetera, I think, decelerated nevertheless. Deposit portfolio grew by 43.2% in nominal terms, that was 30%. So it was a very strong growth, including in the fourth quarter. Net interest margin, we saw a nice improvement in the fourth quarter by 40 basis points, as you can see. And for the full year, the main improvement of 50 basis points. So that was a good one. Something that helped us on the cost of funding here was the fact that we deeply buy out of -- in the third quarter of part of our dual bond and there was a high interest rate there. So it's only EUR 82 million outstanding now out of EUR 350 million, which matures in May this year as well as had enjoyed an increase of yields there a little bit as well. So I think the combination was overall good and it's get to have larger margins. Cost of risk we had at normal levels at 0.9%. So for the full year 0.8 %, and we had a slight decrease of coverage that was because we increased the NPL ratios to 2.7%. That was partly due to the reclassification of some of the loans is getting Stage 3 loan -- it was included in Stage 3, but it was not included NMB and we decided to -- there was a right thing to align those closer to Stage 3 numbers and that's what caused a slight increase on a constant basis is down to 2.2%. And we feel that is a good coverage. On a profit, as we mentioned, this is up by 62.4%. On the quarterly base 4.3%, but it's because it's seasonal probably year-on-year is a better number to look at as well as for the full year is up by 55.7%. Of course, we had one-offs that were a very good positive number that we have seen. Return on equity wise, we had a record high of 33.7% and for the full year, 32.4%. Now this is an interesting slide that I would like to draw your attention to. So first time we are reporting IFRS based capital ratio. So National Bank has than what they promised to do, which was to prepare the banks and the system for reporting in IFRS. So this year, we'll be reporting in the old standard, which is this one here as well as IFRS. So now investors can actually see with IFRS pluses on what our actual capital position is. So as you can see, the core Tier 1 ratio in IFRS is 17.7% and Tier 1 ratio of 19.7% and total capital of 21.7. So it's a very good capital position here, as you can see, and these are the numbers that we expect the fully loaded ratios to be at the end of 2023. So well above the minimum requirements. We will probably be adding slightly more sub debt for total capital ratios to have a slightly bigger, bigger cushion. But overall, the core capital and Tier 1 is rated. Also needs to be noted that our one of settlement that was here, it went to the holding level, so it's not included in capital ratios. So that is on top. This show just a graphical presentation. We have plenty of liquidity, obviously, and we are deploying it in mainly U.S. treasuries, which are offering decent build now is and loan-to-deposit ratio is below 100%. So last but not least, we are delivering more than with promise in terms of return on equity. We are growing more than our loan book guidance is at 12.9% in nonalternative less for constant currencies what we focus on. And in terms of capital distribution between 30% and 50% because of very strong numbers that has meant that this year, we are distributing around $200 million total, including the interim that we distributed. So there will be -- the Board will be recommended to the shareholder meeting in May, PLN 267 million dividend. And we have today, we have also announced PLN 148 million buyback program that will be up to, which will be implemented until the shareholder meeting. So with that, it was half an hour, I'll stop the presentation and open up for the Q&A.

[Operator Instructions] And also please be aware that this call is being recorded.

Yes. Mark Webster is asking, do you have any observations of your performance in the Georgian coming in relations to the influx of Russian migrates? So the observation is that obviously, the Georgian economy benefited from an influx of Russian migrants, some of them relocated for long because it looks like that some of them have opened businesses here. Others are working for remotely for the IT workers. So they've also moved some of their savings and are buying apartments. So overall, I think the total economy is benefiting from the influx of Russia, predominantly young professionals. And we are seeing that in a total growth number as well as our numbers, which is not specific to Georgia. I think every country on the outskirts of Russia is benefiting from that because Russia, a lot of negative developments happening there. So you can basically see a lot happening in Turkey, in Georgia, in Russia, in Kazakhstan, in Uzbekistan and so forth. So in fact, in Romania as well. So there are a lot of countries that are seeing this professional migration of young festive from Russia. Moreover, I think what we are seeing is that because Central Asian countries need imports exports corridor. It used to be mainly through Russia and because Russia is heavily sanctioned and Iran is heavily sanctioned. Georgia -- we may -- not Georgia, but Trans-Caspian Corridor remains the main corridor for Central Asian countries. So we've seen the transport capacity is fully utilized. We've seen railways and roads full of trucks and cargo in and out for Kazakhstan, Turkmenistan, Uzbekistan and so forth for all Central Asian countries, and we are seeing more and more interest on this region in Georgia. So in fact, I believe we'll see a lot of investments coming in, in those sectors in the next few years. So it could be good. James do you want to read the question, Nini, and not the answer?

What would your CET1 ratio be if all of the surplus capital was deployed in the bank on an IFRS basis?

It's me. So if you can do a math Nini and answer this question in a short period of while. We will be back to us.

Well, we'll get back to James. You had one raise hands from Janna, and I'll let him ask the question.

I actually have three questions. The first one is, it feels like you were a bit slower than the market on the lending side last year. Is there a specific reason behind that? So that's the first question. I actually, if you want to go -- if you want to answer one by one? Or should I just give you three questions?

Why don't you give us three questions. And...

Okay. The second question....

I can take notes, and then I'll answer -- I'll take one by one. I'll answer one by one.

Okay, so the second question is, can you talk a bit about the nature of the settlement claim? And maybe when you think about your capital returns this year in 2023, what kind of role would that play? So that's the second question. And the last question is the NPS score, I mean, it's been increasing consistently over time. So big kudos on that. And -- but my question is why do you think it was that low back in 2017? I mean, what did you change in the bank? What changed for your customers? And why do you think they believe they are better taken care of right now versus in 2017?

So let me take it one by one. Slower in loan growth. So we believe that loan growth is good, but we want to do it -- we don't want to be a cutting prices. We want to do it on a market basis. And in fact, increase the sophistication of how we do it in terms of convenience, et cetera, et cetera. So that's what we are focusing on. So it was a decent growth. I don't think it's much lower than the sector. It was slightly lower in the first 3 quarters. In the fourth quarter, I think we caught up. So if anything, I think the trend in the last quarter was growing. We had seen this year, slightly high cost of risk in consumer. So we tightened the underwriting significant impact in February and March. So calibration of that takes time. And I think we are in a better place now than we were in the first quarter of last year. So that had a little bit of an effect. But overall, I think we are doing very well. So it's not significant or anything of notice in my opinion, in general. I can only say that in SME lending, which retail and SME, which are strategic for us, in retail, we remain the leaders with a slight difference, but the very similar rates with our main competitors 38.8%. And in SME, around 33%, which is, over the last 4 years, up from 19%. So our SME franchise has done incredible improvement over the last 4 years, moving lending at a very different level. So we used to take 17 working days to say if we were going to issue or not issue a loan to an applicant. Now it takes 5 working days. And behind this, there's a lot of different systems that need to be changed. So all of that has been done. And there's more and more that we are doing. We have to automate and make life easier for our SME clients. So I think fourth quarter was not behind the market in the beginning, I just explained it. On the settlement -- nature of settlement, I think we have done the -- we issued the note basically to the market that it was something to do with an old legacy claim and is a one-off in atonement I can't comment much more than that on that one. In terms of the third question, thank you for that one because it's -- I take a lot of pleasure talking about this because I think the big change, cultural change that has happened over the last few years in Bank of Georgia was something to do about the customer satisfaction and focus on that. So when you say that why was it so low 5 years ago? Well, it was not that low. I mean, when you look at the NPS scores of different banks, the universal banks, some of them have 0. So they have -- so as you know, MPS is calculated by taking your recommending clients, i.e., happy clients and subtracting the unhappy kind and neutral is not completed. So a lot of universal banks have it around 0. I don't want to name, but there have many large big name banks that have NPS around 0. So there are as many happy customers or as many people that would recommend their services as they are that would recommend against. And that's why a lot of digital disruptors emerged. What we said was that if we want to be the intermediary of the future, we should not be a balance sheet play, but we should be a service plan. So in fact, 23 was not bad for the universal bank. So as long as -- and these banks exist and they don't necessarily go bad, in fact, because the customers make decisions based on a number of things, including access to branches, including the easiness of this app and so forth, the number of products we offer. So they may be not super happy with you, but then they still stick with you. But we said, no, no, no. We want happy customers. And so what happens there is we need to measure what they are happy and unhappy about, and then do the system in the back to incorporate those messages as quickly as possible. So that's what we have done. So I can talk about ours what that means, but it's a transformation of agile. It's making 26 updates per year to our app instead of 3. So we used to have so incremental small updates as well as a lot of new launches that we set that we had, so including fractional trading, including for our stock trading, which we do have, but we are not promoting 3 point trading because we are a bank and -- but we want to have it as an investment product. We'll issue in its marketplace. We are doing a lot of new developments for our financial up and turning it into a financial superb, not quite a super app, so you're not going to be buying breadth from our application. But in terms of financial application, we are earning more and more capability. I hope that answered your question regarding the NPS score. So a lot of times when you see financial companies are focusing on payments, on customer satisfaction and business of use algo, the interaction and so forth, usually goes with the sexes fintech. So I would like to think of Bank of Georgia as a service-oriented fintech with some balance sheet obviously. But that -- it's a core focus for us is to focus on customer satisfaction and providing services to customers at a very fast and quick manner and reflecting of what they need.

We have one -- we have had raised hands for a while from a phone, so I can let the person in, and then we can probably read the other questions.

Yes. This is Constantin from JPM. I had three questions that I wanted to ask. So the first one is that -- so it seems that the economic backdrop is and growth backdrop is extremely strong. But still, despite this positive backdrop, are there any moralities that you see in the lending portfolio? Are there any areas that you think is worth monitoring more closely prospectively. If you could please provide any color and guidance on that. The second question, could you please provide your expectation for cost of risk for 2023? And the last question, should we expect the bank to call its USD perpetual bonds next year? What's your thinking around this topic?

So cost regarding the sectors to watch out for, I don't see any particular sector that we believe is under threat at this point. Obviously, there are some ups and downs, and there are always 1 or 2 cases where we are launching, but that's reflected in the numbers. So nothing specific to watch out for. If overall, on a macro basis, if this one thing to worry about is still high inflation and still high refinancing rate. But given the overall strong macroeconomic performance, I think it covers it in a good way. The cost of risk, I believe it will be in the overall range that we advised a slightly higher, slightly lower of 1% to 1.2%. And that will be for this year or more. In terms of perpetual bonds, I don't know if legally I'm allowed to talk about the intentions, but we understand the market expects us to call it Tier 5. So I'll stop here and just say that we'll have a very strong capital position.

Yes, that is very clear. And maybe if I could fit in the last question. In terms of the in terms of the strong capital ratios that you currently have, see the expectation that the bank is going to maintain these ratios for medium term at these levels? Or do you expect some capital distributions? Do you expect the ratios to come down with growth accelerating. So how do you see capital ratios trending on a medium-term basis, say, 3- to 5-year horizon?

I think the buffers that we are holding right now are a record high. And we believe it's reasonable given the very high volatility. And obviously, we have had a very strong year, but the environment is so volatile that I'd like to hold those buffers high for potential bad tunnes, but also for potential opportunities. So as you said, if growth opportunity is there for us to grow loans and grow balance sheet because the economy is growing so well and because it has deleveraged, I don't want to be in a position that we are short of capital. So things are changing and volatile so much that I think it's prudent to keep higher capital position in this time. So that's what we're going to do. In the medium term, we'll probably keep buffers between 1% and 2% above the minimum requirements.

Got it. And is there an expectation that the minimums which remain is the pretty much today. So there won't be any relaxation in the minimum in the medium term.

We don't expect relaxation at this point with high inflation for sure. So I think the regulator overall has a type monetary policy. So we like some banking ratios when -- I don't see that happening immediately. In medium term, who knows. We'll see it because the capital ratios are very high, as you can see, by the way, one of the investors asked how -- what would be the core Tier 1 capital ratio, if we included the holding profit that we have? It will be extra 2%. So CET1 will be 19.6%, which is very high, as you understand, by the low-cost standards and IFRS term. So I hope that answers your question.

Nini, there are a lot of questions in Q&A. Should we go to them? So we have a question from Ronak Gadhia. He's asking if we can comment on the stickiness of the deposits that the bank attracted during the 2022 item [indiscernible] grow 2023.

Yes. We believe that there are the usual deposits. So more than 2/3 of that is from the residents, less than 1/3 is from nonresidents and even the nonresidents that we qualified as small resident at relocated a lot of them to Georgia. So we don't see all of them going back. So maybe a small part, but not significant part could be at risk. Then my question is the share price level where you might consider doing share buybacks and looking at the other forms of distribution accelerated investment. Not really, because it's a capital return one way or the other. So we have had an indication for majority of shareholders that they, in fact, refer the buyback through dividends. There are other ministers that prefer does. So that's why we are keeping a good balance there. So not really.

Another question...

Yes, can you please provide more details on the exceptional gain? Was the cash or noncash gain? And what does the bank intend to do with the excess capital and the patrol level because of this gain? So it was cash EUR 137 million out of EUR 141 million or EUR 143 million was cash. And so it was predominantly cash more than 95%. And we intend to keep that buffer given the volatility of the region and for the environment. And once that volatility decreased, then obviously, we'll either deployed or we shareholders. In terms of more color, I cannot say anything other than it was a settlement of a let us to claim and then a one-off in nature. Can you please provide more details? Yes, I think we answered that. What is the NIM loan growth and FX income guidance for 2023? The NIM -- we don't provide such guidance. We just say that in NIM, we can probably say that it will be between 5% and 6%, but we don't expect further significant growth there. It will be shorter term. So it will be between that range. So that should be decent. In terms of loan growth, it's difficult to say at this point, but more than 10% is what we are guiding the market for the medium term. And we keep the same guidance given the higher interest rates. But overall, we are seeing delevered economy, which is good for us. So -- but given the high interest rates, probably it should not be much higher than 10%, but we'll be opportunistic and see what we can deliver. In terms of FX income, as I said, about 1/3, about 40%, about 1/3 roughly of what we have seen in the second, third and fourth quarter may not be sustainable. But so far, we've been -- I mean it started to decrease, but we still have good numbers. So at some point, we should probably assume about 1/3 of that will go away. What are the three most important components? This is Mark Webster. What are the three most important components of the Bank of Georgia's story over the next 3 years? Loan growth, capital distribution, loan loss provision in NPLs. What are the three most important components of Bank of Georgia? I would say the three most important components of Bank of Georgia is our financial application becoming more and more important for our customers. Our payments franchise becoming more and more important in our loyalty program as well, and we do it in many different ways. And once we are very strong in those, then you can attach loans, and you can have decent NIM and you can have low loan loss provision because our data capability is at. So I hope that kind of answers what we are focused on. So we are focused on being relevant to our customers on a daily basis. That's our main component of our success and story. And the rest is these numbers that I think we are decent in terms of managing this. Anonymous attendee, what you intend to do with the capital from exceptionals again? I think we answered that. We intend to keep that right now until the high volatility and later on, either deploy return to the shareholders. Fiber management. Can you discuss the taxation environment is stable now? Yes, as you know, the government announced that that banks would not be enjoying the so-called Estonian model, i.e., corporate tax only on distributing profits from the 1st of January as it was planned. And they canceled the dividend -- 5% dividend tax and added that to the profit tax. So it's 10% now. We have a one-off charge in the fourth quarter for that. But going forward, we expect that to remain at this level. And overall, I think Georgian government has been very good at not increasing taxes. So for what I can say it's one-off in nature. So yes, I believe it's a stable excess right now.

So there's raise hands I think from sanitation but he may have forgotten to put it down, but let's try.

So let's wait for 15 more seconds. So if you have any questions, please don't hesitate to ask and then we understand we have as lives so we don't want to spend more of your time. We'll wrap it up. Well, I think we answered all the questions so far. So thank you very much for your time. I think results were very strong for 2022. For sure, it was record results. And we continue to focus on our main task, which is to keep our customers happy and deliver more and more product improvements to them. So stay tuned. Thank you. Bye-bye.

Thank you. Bye.