Liberty Bank boosts net income, assets in 1Q12

Liberty Bank (BANK GG), Georgia’s #4 bank by assets, released 1Q12 financials. The lender boosted its net income 2.4x qoq and 67% yoy to USD 1.7 mln, implying annualized ROE of 15%. Net interest income declined 2% qoq (+76% yoy) as NIM narrowed to 8.3% in 1Q12 from 10.0% in 4Q11. Net fees and commission declined 4% qoq due to seasonal factors, but were still 12% higher in year-on-year terms. Liberty’s Cost/Income ratio stayed virtually unchanged qoq at 71% in 1Q12 (down 6.2 pp yoy). The bank’s assets grew an impressive 10.2% qoq in lari terms, which was in sharp contrast to a 1.2% qoq asset decline in the overall Georgian banking sector. Growth in net loans was also strong at  4.6% vs. 1.6% for the sector with the ratio of net loans to total assets declining 2.2 pp qoq to 41.5%. The bank strengthened its position in the sector considerably, with its share reaching 6.6% by assets (up 0.7 pp qoq), 4.7% by net loans (up 0.2 pp) and 10.2% by deposits (up 1.5 pp). NPLs declined marginally to 11.3% of gross loan, NPL coverage ratio improved 6pp to 116% in 1Q11.

Liberty Bank 1Q12 financials, IFRS, USD mln                                 
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                                1Q12    qoq    yoy
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Net interest income    7.2    -2%    76%
Revenue                    13.5    -5%    43%
Operating expenses    9.2    -6%    29%
Loan loss provisions   1.9   -32%   135%
Net income                1.7   241%    67%
Assets                       487    18%    30%
Net  loans                  202    12%    94%
Customer accounts     413    24%    74%
Equity                        46    11%   113%
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Source: Company data