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

Hello. Welcome everybody to Bank of Georgia Group PLC's earnings call. Thank you all for joining. Today, we released and are presenting the group's consolidated financial results for the second quarter and the first half of 2024. As always, I'm joined on this call by the group CEO, Archil Gachechiladze, and we'll start, as always, again, with the presentation, and then we'll move on to the Q&A session. For your information, this call is being recorded. And with that, I will hand over to Archil.

Thank you, Nini. Thank you for being on the call. We are seeing the numbers that are usual numbers, pretty high, which is super amazing, given the fact that we are at the last decade of August, which basically means that you should be in vacation. So I hope you did get a little bit of rest in vacation. And with that, let me dive into the numbers and we can go through numbers that we have, which are pretty decent. So we have a return on equity of 28% with cost income of 35.6%, which is in combination of Ameriabank. On a stand-alone basis, we are just shy of 30% for the Georgian operation. That is profit, net profit consolidated is GEL 430 million, although ECL charge, which is related to the acquisition and does not reflected by our run rate. If you add that, you get GEL 480 million, which is more or less what we are looking at in terms of the profitability. So based on that and pretty strong capital numbers, we -- the Board recommended a dividend per share of GEL 3.38, which is above GEL 0.95p but it will be determined the exchange rate what we determined in September. And a buyback of GEL 73 million with the current price it should be around 0.5 million shares. So with that, let me have a quick review of the macro economies of 2 countries, Georgia and Armenia. The format is slightly changed because this is the first time that we're presenting on the income statement side, the consolidated company. So hence, the macro is what we are present in both countries. Both countries are doing very well. In fact, Georgia has delivered 9.5% second quarter real growth which is extraordinary. And we've upgraded the expectation for 2024 to 7%. 5% in -- for next year, which, as you can see from the 2021, which was slightly -- as a result of the lower base in 2020, but then 2022 was still 11%, 7.5% last year and expected 7% this year. Armenia in a similar way had very strong numbers as well. Second quarter of 6.4%. Real growth expected for the full year is 6% and 5.3% next year. We have seen the inflation coming down. As you can see, CPI the latest number is 1.8% in Georgia and 1.4% in Armenia, and the financing rates have come down from 11%, down to 8% in case of Georgia and 7.75% in case of Armenia. So very similar trends in both geographies and very similar economies in many ways. As you can see, because of very strong economic growth in both countries, we have seen mid-teens and high teens wage inflation in nominal terms and in real terms pretty high as well in Georgia as well as in Armenia. This is relevant as we discussed, the cost inflation what we have seen this quarter. So we see that as the inflation -- CPI inflation comes down, also the wage inflation is coming down. Real still remains high in the case of Georgia of about 13%. Having said that, I think the trend is downwards and we should see it coming down to high-single digit or low-double digit. In Armenia it is already about 5.4%. Also, what we would like to present here in both cases, Armenia and Georgia is the main source of external sector inflows and outflows, which trend-wise are -- we are seeing really decent numbers, something -- this is not the full current account balance, but current account balances are usually published a little bit with delay. So we'll be presenting those in the appendices, obviously, the larger presentation. But in terms of seeing how the exports as well as the net transfers and tourism are doing. It's a good indication to present this. Also something that has become bigger and bigger part over the last few years of the hard currency inflows is the services. And on the last page, as you can see, we've presented tourism there. But in this -- on this page, you can see that the other parts, especially transport and IT have become bigger contributors overall to the economy. IT, for example, in 2023, in case of Georgia, you can see that it's about $890 million of export revenues that are generated. In Armenia, it is even more, although Armenia itself is about 20% smaller in terms of the population and the economy, but the IT is a larger part of the economy as well as when we see the other also there, the education, especially the university education is becoming a bigger part of the economy in Georgia as well as in Armenia. So I think the trends here are decent and flat and increasing in some cases. We have seen Armenian dram getting stronger by 4.1% from the beginning of the year, while lari has stabilized. So it devalued slightly in May as we had some demonstrations and some volatility in the currency, but it came back to GEL 2.7 per USD 1. So from the beginning of the year, it's flat. And as you can see the real effective exchange rate over the last 10 years has been flattish to appreciating in case of Georgia is slightly more. So in case of Armenia, although in both countries, we are seeing good flows and [indiscernible] appreciation, which is something that we have seen now, especially in July, we have seen it strengthening to GEL 2.68, but then the National Bank starting to buy it as well lately in end of July and beginning of August. So we are seeing good numbers in terms of the gross reserves and net reserves. The first quarter decrease -- slight decrease was a result of the repayment of some of the foreign debt as well as we bought some in the first quarter, some hard currency to pay for the acquisition as well as then in the second quarter, National Bank intervened to support lari because of the [indiscernible] volatility, but then it [indiscernible] has started to buy back in July and August. In Armenia as well, we have put strong numbers. So from a historic perspective, the gross as well as net reserves are pretty strong. On the fiscal side and the government debt side, we see that Georgia is below 40%, Armenia is about 50% and fiscal balance also in case of Georgia is 2.5%, currently running at that rate, although it's -- we are ahead of the budget in terms of the revenue collection there. In Armenia, the fiscal balance is planned slightly more in terms of the deficit because of very ambitious projects in the infrastructure, especially on the road side, which is very encouraging and very good for the country leading to long term. As you can see on the banking sector, the growth is pretty healthy around in case of Georgia 17.8% and 19% in case of Armenia. Dollarisation is at very good levels down from mid-65% at about 8, 9 years ago down to 45% and 33%. Armenia performing even better on this. And Georgia has stabilized at about 45%. And the quality of loans in the whole sector is pretty healthy in both cases. Here, we would like to underline that Georgia has a gap in terms of the long-term trend if you -- long-term trend of banking assets to GDP. I think we would be at very healthy levels between 70% and 80%. We're at 65% right now. So there's more to grow there. But in case of Armenia, it's even more so. As you can see, banking debt to GDP 53%, 12 points behind Georgia, which represents more potential for growth in Armenia. Now a few things about the numbers about the strategic direction, and then we'll go to the revenue and expense numbers. So we are developing our retail and our applications for the legal entities. We have added 3 new languages to our retail app, which is Armenian, Azeri and Turkish. Azeri and Turkish are obviously very close to each other, about 70% of words are similar, but still very different than language. So basically, why did these 3 languages because they are minorities in Georgia, which Armenian and Azeri specifically, which I think will enjoy our services even more in their own languages because some of them have a difficulty in Georgian or English. So that should allow us to basically cover better some of the minorities in the country. In terms of the number of clients, our growth is still impressive, although our overall penetration in terms of the coverage of the population is still pretty good, but overall numbers are growing at 11.8%, as you can see. In terms of digital usage, it's growing by 20%. So [indiscernible] million users. And in terms of daily users, it's more than 700,000, as you can see, and it's growing. So engagement is growing even more than the usage and usage is growing overall -- better than the overall client numbers. On the legal side as well, we have seen 20% of -- 20% more users of our digital channels, be it the Internet application for the legal entities or the mobile application. And in terms of the monthly active users, we've 26% growth. So that means the higher proportion of overall our clients are using our digital channels. We've seen more and more of our retail sales being done through digital channels. As you know, some -- few years ago, we were looking at the ratio of transactions being done digitally. So now almost all transactions 99.2% are done in nonbranches, about 70% done in digital channels, about 28% done in ATMs and self-service and also that combined is 99.2%. So 0.8% are done in the branches, and that number is decreasing even further. But what we are concentrating on right now is selling more products digitally. And that number used to be in mid-teens a couple of years ago, as you can see, and we have achieved 57% in terms of retail. So that's increasing in a very healthy way. And specifically in terms of loans, retail loans, about 80% of wholesales are done fully digitally. [indiscernible] predominantly still issued through branches at least part of the process. In terms of the acquiring business, payments acquiring is a very strong franchise that we have and the strong growth has continued there with 35% increase in volumes year-on-year and quarter-over-quarter is -- there's some seasonality there about 17%. So year-on-year is 35%, market share that is very strong, 56.8%, up by 3 percentage points year-on-year, on the issuing side. So that's a number of people using our cards actively, so monthly active users of our card usage in terms of number of people, not number of cards, is up by 18.7%, also a very good increase. So in terms of the franchise strength and growth, very good numbers there. Something that makes me very happy is our NPS number. So you remember 5, 6 years ago, we started focusing on this and have managed to increase it from the low of 27 in fact, 6 years ago to 71. And 71 is a new historic high, which I would like to thank all Bank of Georgia staff for focusing on this religiously and basically increasing the quality and satisfaction of our clients to the point where it's 70%. 70% is very high showing for any universal bank, that may or may not be sustainable. We will be happy between 60% and 70%. So we don't aim to go above 100%, but rather keep it at these levels. I highlight that because at some point cost-wise is it becomes too expensive to further grow it. But 60% to 70% is a very healthy level of showing for any universal bank. In Armenia, as you can see, the growth rates for individual clients are very good and number of clients have grown by 13.4% and digital users by 43%. And daily users by 55%. So here's what you can see that 57% of customers are now active users sorting for the application and there's plenty of upside here. And there's plenty of upside in overall retail customers, monthly active users of the services. So we expect that a lot of growth will come here, but it will take time because there's more product development and more overall user experience, improvements and other things that will be introduced over time, and the teams are working together, and this will take time, but I think there's plenty of upside here. Now in terms of numbers, the second quarter numbers include Armenian Bank. And therefore, some of the growth numbers are basically very high so I'll talk about the group, but I'll also talk about the Georgia operations so that you can see what like-for-like comparison as well. So it's not lost in the overall big numbers. So the revenue is up by 42% year-on-year. But in terms of Georgian Financial Services, it's up by 4.8%. Now here, what's important to say is that the interest is up by 14.8% from 382 to 438. So the quarter in which interest is up but also then some of the other fee and commission income numbers, which are core numbers have grown significantly as well. So net fee and commission numbers are up by 37%. So 88 to 120. So you remember few slides ago, I discussed the acquiring business and how the volumes were growing at 35% and so forth. That's the main driver. Net FX revenue has gone from 88% to 99%. So that's about 12% growth. And the only decrease that we see is in other income, which predominantly was based on the gain on the real estate sale that we had 1 year ago in the second quarter of 2023. So if you exclude that, you would have 17% increase in the noninterest income, which is very strong. So although the noninterest income seems like 10% reduction and overall revenue number is only 4.8%. The core components of it have grown in a very healthy [indiscernible]. We are quite happy about -- in terms of consolidation, you can see the big numbers as well on the [indiscernible]. In terms of expenses as well, those are also big numbers with 88% and 53%. Here as well, although [indiscernible] numbers have grown as well with 20-plus percent here. We would still in terms of the cost-income basis would still be shy of 30%. And in combination, we are at 35% here. So costs and containment of cost growth is one of the focus areas. We basically have experienced this situation where the business has grown significantly over the last 3 years. And we've done a little bit of a catch-up of building the infrastructure as well as the people and staffing to make sure that the services are delivered to the high quality. So we have seen some staff growth, but also the staff wage inflation has been significant. Having said that, I think we are seeing the trending down as I explained in the macro section. And we should have -- we should be closed by the end of the year, we should be close to the long-term ratios, which should probably be high single digit or low double digits. So that should be in line with our business growth. In terms of the loan portfolio, growth was 64% again and 56% here. But if you look at the Georgian side was 23%, constant currency was 19.6%. So very strong growth. We are very happy with it. Quarterly growth was also good. On the Armenian side year-on-year, when we looked at it, it's -- it was 36%, but in terms of the constant currency was 26.6%, so very strong growth there as well plus Armenian dram got stronger versus lari and dollar. So that caused the lari translated number to be even higher. So on the deposit side as well, we are seeing very strong growth in both geographies. So very good growth, partly reflects, I think, strong growth in the accounts in both economies, but also leading franchises in both cases. So net interest margin 6.3%, almost flat, which in Georgian case, it was decreased slightly as a result of the Tier 1, $300 million that we raised in the beginning of the quarter, and we repaid the old one at the end of the quarter. So there was some negative carry of about 10 basis points, which should help us in the third quarter and going forward. And then in Armenian case, it was slightly more so balanced it out around 6.3%. In terms of cost of risk -- the -- we had an ECL charge, which when you do the acquisition, those of you that have spent a lot of time understanding some of the complicated IFRS rules will know that when you do the acquisition of financial institution, the fair value of the loan book is added as if you issue that loan fresh, although there are some charges of Stage 3 loans already has deducted in a fair value, and then you apply the ECL to the whole portfolio. which, in this case, is about 73 basis points for the -- all of Armenian book, although we have not seen any deterioration there at all or whatever was separate. So basically, if we didn't have the ECL charge, our cost of risk would be 0.4%, although you are seeing the numbers of 1.1% and half year would be similar as well here. The NPL cover is slightly reduced, but no major movement there either. And we disclosed separately due to -- separately because consolidation is also affected by ECL. So I think it makes more sense to look at it separately at least the next 3 quarters and then it somehow going to sit down. So profit as well. We saw that it's up by 11% year-on-year. But if you include the sales charts that I've discussed quite a bit now, it would be 418, which is comfortably higher than the run rate of 450 that I mentioned on the previous call. So 28% at the time of equity. But if you added the ECL, it would be at 31%, so 28% is a pretty good number, but 31% is reflective of more core of what we are looking at. So in both cases, both numbers are proven. So the capital ratios are strong in Georgia and in Armenia as well, especially on core Tier 1. And basically, as I mentioned on the previous quarter result during the acquisition, although Ameriabank is highly profitable. We expect that profitability to be deployed to finance high growth in Armenia and here as well because we have higher ratios and buffers for the core Tier 1. You see that this capacity to add Tier 1 or the Tier 2 instruments and further finance growth in Armenia. Georgia numbers are also very high. But given the elections and the world in the region, I think it's good to have high buffers. Liquidity is high, and we like it that way and probably at some point, close to the end of the year, when we look at slightly reducing it. All of this basically means that dividend announcement was GEL 3.38 which is 10% growth on last year and very comfortable for our numbers and buyback of GEL 73. Again, this is for half year only and then second half year, we'll do in spring of next year. You can see that the numbers over the last 3.5 years have been reducing of shares outstanding. That's a result of our buyback that we started 3 years ago, is part of the capital repatriation for the number of shares decreasing. So I will stop here and open the floor for your questions.

[Operator Instructions] And we'll have the first question from Robert Sage, Peel Hunt.

Congratulations on a great set of results. I've got 2 questions actually. The first relates to lending growth, where you've shown some really very strong lending growth in the second quarter, I think, over 8%. And I appreciate some of that is due to a very strong economy, some of it is due to currency appreciation. But I just wanted to ask 2 questions that. One is, are you comfortable with this rate of growth, just in terms from a credit perspective. The second part of this question is, to what extent do you think we should expect to see this moderate in the second half of the year, if at all? The second question I've got is looking at the segmental information, because looking at the Georgian performance, it seems as if retail banking has absolutely shot the lights out relative to the first half of last year. But the SME division slightly lower profits and Corporate and Investment banking significantly lower profits, all of which balances are to sort of a good Georgian showing obviously. But I was wondering if you could look and sort of see how you see the shape, the divisional shape of your P&L coming through over the second half of this year and into 2025 in Georgia.

So I'll start with the last one. So basically, on the -- so retail division is a net lari borrower from the -- our treasury. So -- and so as the lari gets less expensive, the profitability of retail increases. And the corporate is a net lari lender to the treasury -- treasuries like our treasury. So as the lari rates and the refinancing rate has come down significantly, as you can see, the corporate profitability decreases. So -- because that makes sense. So it all washes out at the end but I wouldn't pay too much attention to it. So we doesn't reflect the fundamental strength of the franchise, one way or the other. But when the lari rates decrease, so corporate is a lender to retail. So we use corporate lari as a net-net, I mean retail has its own fund as well. But then on balance sheet, it lends dollars to the corporate and borrows lari. So as the lari rates come down, basically, retail has some consumer lending, which is short-term fixed and its profitability increases and corporate decreases. Then -- so I hope that answers your question, and that's not a big deal if you ask me. On the SME, it's reflective of the pretty strong competitive nature of the business because all the small banks are in SME segment. So it's up and down slightly. So we experienced slightly less growth there versus the other parts of the business. Then in terms of the first question, which is growth of around 20%. We are seeing very strong growth in the economies of both countries. Plus in Armenia, I think we see more potential of growth in terms of the bank loans to GDP. Certainly there's potential there as well. So do we see it moderating. I think it will be reflective of the economy and the overall sentiment of investment. And so far, we've seen very, very strong performance there. So is it sustainable at 20%, medium to long term, no. But is it sustainable closer to 15%? Yes, with slightly more growth in Armenia, close to 20% and 10%, 12% in Georgia. So guidance of 15% that we created from the last quarter, you may remember from 10% is what we think for our business combined. In Georgia, slightly less. In Armenia, slightly more. Having said that, we are experiencing and seeing very, very good quality lendings. So with -- if anything, have tightened the on the risk underwriting in certain sectors. But -- so -- but nevertheless, we are seeing very, very strong growth. So we're happy about that.

The next question is from Stephen Barrett from Cavendish.

You've highlighted the upside that exists in sort of retail banking in Armenia as well as talk in today's release about cost efficiency been an area of focus in Armenia. I was just wondering, does Ameriabank needs significant investment for you to achieve your ambitions in retail banking. Could you talk a bit more about what we could expect from a cost efficiency perspective?

There will be investments, but it's already reflected in the numbers that you are seeing. So there will be some investment going there, but it's basically -- we're working with the management of the of Ameriabank and agreed on a number of directions where the focus will increase. We will see slight obviously, as we invest, but I think the scale of the bank allows it to be done so that it should not be a big deal. And in terms of the what we expect there, we have some numbers that you are seeing slightly higher increase in terms of the cost there that are reflective of retention bonus, which is applicable for 18 months after acquisition. So you'll see that for the next few quarters, but then it should be disappear as well as some of the investment in new capabilities that we are growing there. But it's already in the numbers, let's say.

The next question is from [ Henrietta ].

I've got three questions. The first was just on the Georgian SME NPLs. It looks like they've gone off a bit, and there's a higher cost of risk there. Could you just talk through the reasons that, please? The second is just on the Ameriabank cost structure. I mean you just explained that there are some retention bonuses. I was also just wondering if there's anything that structurally makes the cost different to Georgia and how much is a function sort of growing the scale of the bank and if there are other things that you can do to bring down the costs? And then the third was just on the credit loss charge that you took. Is there something that you expect could be written back in the future? Or could you just talk about the treatment of it and whether there might be any sort of ongoing costs related to that? Or were there something different in the provisioning between the 2 banks?

[ Henrietta ] so first one was Georgian NPL, which struck me that we have any...

Just for the SMEs.

So there's nothing specific, nothing big or problematic that's happening overall. Maybe part of SME, but it's not major in the overall numbers, so not much to comment there. Let me just see the NPL numbers. Yes. So basically, I don't have much to say [indiscernible] retail on the SME. Yes, it's a very slight increase of 30 basis points overall. Yes, it's -- we are seeing slightly higher NPL in SME, but should I say it's normal. I mean, we've seen from last year, there's 3.2 and this year, it's 3.5. So we have some issues there, but nothing major. We've not seen any major issues and not like there's a trend or any problematic situation there. In terms of Ameria costs, we think that this higher level of cost will remain for the next few quarters reflective of some of the things that I discussed but should normalize some time next year -- from mid next year. in terms of the GEL 49 million charge that you described so this will flow in over the -- as the portfolio refreshes and gets refinanced over the next 2, 3 years. Yes, this will flow into the interest income over time.

That's helpful. Could I just follow up on the second question just on the costs. Where would you expect the ratio to sort of normalize in the future? And are there any other areas that you can sort of improve efficiency of that bank.

So I think the key focus over the next year or 2 in Armenia will be building out the business, especially on the retail side. So I would expect the cost/income ratio to be somewhere between 35% and 40%. In Georgia, it's below 30%. So as the scale is probably doubled or so in Armenia, then we'll see that operating jaws will kick in, in positive operating jaws and that ratio coming down, but it will take a few years. So I think our key focus will not be chopping up the costs there, but rather increasing the -- making sure that the costs don't get out of head, but at the same time, investing in capabilities, especially on the retail side.

We have 2 questions in the chat. One from [ Brad Rubisky ]. He's asking if the operating expenses of GLE 338 million for the quarter, is that a good run rate number to think about? That's the first question.

We have a business that's growing at 15%, 20%. So I don't know what run rate means. We basically look at the year-on-year numbers, and we would like to see positive operating jaws. That obviously, does not always work. Sometimes the revenue increases significantly, like we've seen over the last 2 years and then we have to adjust the infrastructure as well as see the market reality so that the cost of labor costs are affecting that. But overall, I think whatever we are leading in terms of the cost income of 35%, is we're very comfortable with it. So it'll be lower in Georgia, higher in Armenia. But I think that's a pretty comfortable level. So we don't guide expenses separately, but we guide cost income of 35%.

The next question is from John [ Yan ] in the chat. Can you please comment on the competitive landscape of digital banking and payments in Armenia?

Probably it's best we cover it separately. But basically, there, what you see is that smaller banks are focused on retail and they are more active there than the larger ones. And I think large banks, especially Ameriabank, which enjoys fantastic brand retribution and very good standing with the corporate and premium clients, has a fantastic opportunity of capitalizing on that as well as on some of the synergies that it has vis-a-vis the retail and then basically offering such services.

The next question is online from Olga [indiscernible]...

I was just wondering if you could comment on the very low cost of risk that you charge for Georgia, how generally sustainable that is. And where do you see it for the next few quarters? And one more if you could provide some sensitivity of your net interest margin to interest rates. I appreciate the [ AT1 ] comment, but if we see further rate decline, what do we see in terms of margins.

So the rate decline, basically, it has a negative effect, but the big decline has in lari terms has already happened. And in terms of the dollar, we don't expect a major change. And when there's some change, it will be reflected, but over the next 2, 3 years. So I think we mentioned previously that the margins stabilizing somewhere between 5.5% and 6% would be something that we expect, but this could take 3 quarters. What was the first question again?

It was about sustainability of low risk charges in Georgia.

The economy is doing phenomenally well. and the cost of risk is low. We -- although we expect something between -- around 1% which is more normal through the cycle. So whenever the cycle hits, obviously, it will be higher. But right now if the economy is growing at this rate in years, 4th year in a row, it's only natural to see low cost of risk, which we are seeing.

The next question comes from John [indiscernible]. John, can you hear us? We can't hear you. So we can't hear John and he muted himself. So meanwhile, we have one question in the Q&A chat. This is John [indiscernible] asking another question on Armenia, whether will separate techs that be used in Armenia and when do you expect tech side of Armenia [indiscernible] Georgia, in 2 or 3 years...

Probably sooner than that, but it's not a tech stack per se, but it's the technologies of offering and selling in the right way and so forth, it will be seeing how to deploy and develop as well as the capabilities itself of the interval there. But it will take more than 12 months in less than 3 years, something like that. I'm sorry I cannot be more exact because I don't know. We'll see as we go. But we know and we feel what needs to be done. So let's a good start. And it's mainly coming from the management of the bank. So they will be doing it and we will be helping.

So another question in the Q&A chat. What drove the outperformance of Georgia and GDP growth in the second quarter? And is it possible that it continues to outperform forecast? Or is it lapping last year's second half very difficult. Or is lapping last year second half very difficult?

Tourists numbers are good, and service export numbers seemed to be very good. So overall sentiment, I think, is very good, regardless of the volatility that we've seen on the political side, we've seen very, very good performance in the economy. Is there a chance that this will continue. Yes, so far, so good. I mean we are seeing it to continue.

So we couldn't hear John, but tied to his question. So he has questions regarding Armenia. The first one is about loan growth. It looks like outperforming the market, notably. And can you please comment on the growth in Ameriabank? And the second question is regarding the fee growth. It was exceptionally good in the second quarter? Or are there any one-off?

In the fee growth on the organ side, we didn't have any one-offs. So it's very good growth and predominantly, as I said, is driven by the acquiring business volume growth, which was 35%. So very good growth, and we are seeing those volumes grow solidly. So I think it's a forecasted franchise that we have. On the Armenia side, also fee growth was good. There was 1 advisory mandate of around GEL 10 million that came in, but Ameriabank has a very strong advisory and a strong banking franchise in Armenia and very good at it. So I won't call it one-off that [indiscernible] it quarter after quarter deliver those kind of fees.

And other question, if you want to comment on the high loan growth at Ameriabank, but I think you already covered that growth.

[indiscernible] so it's slightly higher than what we expected of around 20 but it's coming from strong growth at the end of the year as well. So, so far, so good and quite frankly previously, I think the previous owner was dividending out some of the net earnings and the fact that we have the ability of deploying it as long as the profitability remains high. So if we deploy that earnings at high profitability of around 25%, we are very happy with it. So that's what we have seen that the management has used this capital because they can afford it now to deploy this capital and grow more than 20%, which we welcome and very happy about.

I don't see any other questions, Archil, at this point.

Well, thank you very much. It's been a pleasure. And I think we're very happy about the second quarter numbers, especially the core revenue numbers, growth and the economy is doing very well. Our core franchise is doing very well in terms of the NPS number, record number in terms of number of retail clients in both geographies growing at double digits. Digital usage is growing more than 20% in both geographies. Our payments retail franchise is doing very well. So overall, net fee and commission income is going very strongly in both geographies, net FX growing at 12%. So all in all, I think the loan growth, about 20% and higher deposit growth is similar. So overall, very good economy, very good growth. We'll be focused on the expense side, and we see downward trends there in terms of growth numbers as well as being ready for the upcoming elections in October. You've seen a lot of noise in May, but the noise has basically gone away. Everybody is focused on elections in October. We are keeping high liquidity by the end of the year, we'll probably look at normalizing the liquidity and focus on the profitability. So with -- if you normalize for ECL, you will be looking at 31% return on equity, which would be -- which we think is very decent for any universal bankers more or less the franchise strength of NPS and the retail numbers. So we look forward to continuing delivering good numbers for you, and we will back in November. Thank you very much.

Thank you all for joining, and take care. Bye.