Bank of Georgia Group PLC

LSE:BGEO

Earnings Call Transcript

[Nini Arshakuni, executive]

Hi, everyone, and welcome to Bank of Georgia Group PLC's conference call. My name is Nini Arshakuni. I'm Head of Investor Relations.

Today, we will present and discuss the group's financial results for the second quarter and the first half of 2022. Group CEO, Archil Gachechiladze, will start with an overview of the group's performance, and then we'll take your questions. Please be aware that this call is being recorded. [Operator Instructions] And now I'm turning over to Archil.

[Archil Gachechiladze, executive]

Thank you very much, Nini. Welcome to our second quarter results call. I think we -- you may have seen already that it is an extraordinary number that we have had in our second quarter, which is a record by many different lines and as well as a combined net profit of roughly $100 million in the second quarter.

So with that, let me dive in and touch on a number of things regarding the macro performance because I think a great deal of this performance and increases is also due to macroeconomic strong performance. And then after that, we'll go into discussing some of the numbers of the company. So -- on the macroeconomic side, the second quarter real economic growth has been estimated at 7.2%, which brought the first half real growth to 10.5%.

With that, we -- which is way ahead of some of the predictions early in the year. The beginning -- third quarter performance of 14.9% was due to a lower base last year because of the lockdown in 2021 first quarter, but overall, 10.5% is a very good number. It's driven by very strong remittances and tourists and immigration flows, as you know, from the neighboring countries, but also exports have performed very well as well.

So overall, very strong performance all around. So, what that has caused is that we have updated our estimate for 2022 to 9.2%. And in fact, features just published an estimate for 2022 number of 10.9%. The World Bank and other IFIs are still projecting around 5.5%, but I think that number will be updated to high single digit, if not low double-digit number for real growth for this year.

Next year, we estimate growth – real growth of 5%, which is reflected, what you see there on the chart. So overall, very strong performance versus the region and other peer countries. Georgia is experiencing high inflation, like most of the world. We are -- June number was 12.8%, and July number was 11.5%, so slightly lower, but the core inflation was 5.8% and 7.1%.

So overall, I think there still inflationary projects are high, and that's why the tight monetary policy that the National Bank is implementing right now, as you can see, that the financing rate is at 11%. We'll probably stay longer than we originally anticipated. And at the end of the year, our estimate of inflation is 9.5%, which will -- which we estimate will bring the average inflation. -- for the year of 11.7%.

So, all in all, I think this year, we are experiencing a nominal growth of above 20%, which is really an extraordinary performance for Bed Rohan. Lari has been strengthening over this period of time over the last few months from the beginning of the year, Lari has strengthened by 12%. You may recall that we have been talking about Lari being oversold last year, and that has -- that has stabilized now.

And as you can see, it's, in fact, a little bit stronger than the long-term trend. But it's only to reflect some of the shifts that have been happening in the economy as a result of geopolitical turbulence in the region. And you see that there's also some logistical and transport corridors are being rerouted towards southern axis, which will have a long-term positive impact for Georgia.

So there will be investments going into transport corridor of different types of logistical ports and logistical centers and so forth because right now, as this quarter was underutilized in fact, right now, it's grossly utilized, and we are experiencing delays on this corridor because there's so much demand for the cargo to go through this corridor, I mean, so this will have a positive impact on -- for medium-term foot because there will be investment going in that way.

Now let's discuss some of the numbers -- company-specific numbers. As you know, we -- the retail bank is composed of mass retail premium and MSME. And there, I think our leadership is strengthened, and I'll touch on different numbers as we go forward. The strategic focus is as presented here, and let me go one by one what our progress has been. The mobile bank and iBank for individuals, our number of monthly active users is up by 31% year-on-year. And it's getting close to 1 million number and as the proportion of our monthly active users, but not digital, the overall monthly active users that do business with us, which is not presented here, but it's also up by more than 10% to 1.5 million.

Our digitally active -- monthly active users to total clients -- total active clients is 64%, which is a significant growth of 8% versus last year, and that makes us quite happy that we see that trend of our customers becoming more and more digitally active. On -- though the number of transactions, the mobile and iBank and its predominantly mobile is up by 57%, which is also quite a strong growth.

And in terms of the [indiscernible] demand factor still daily advisers alterated -- that's almost 46% for any financial up, in fact, to have so much steady interaction is a very good number at 46%. And that is important for us to have a daily interaction with our banks, with our customers so that the stickiness and the franchise value is stronger than were.

The overall number of transactions was up by almost 33%. But as we described previously, our mobile and interbank users were up by 57%. So that basically means that the more and more people are doing banking with their mobile phones, and that has become 54% of total transactions. So, you see that other channels are not growing as fast as mobile, which is very good for us.

That shows that mobile is very comfortable way of doing it and people are finding it easier and easier to do more of their banking using their mobile phones. In terms of product offloading, we were at 33.8%, which is slightly short of our guidance of 36%, which was for June 2022.

In fact, in July, we were slightly above 36% that was due to the fact that we tightened the consumer loan underwriting as we were seeing high inflation, especially on the subprime segment, and that is a highly digital product. So as that was limited slightly, that reduced slightly the automation, but overall, very closely in target. The -- our business, internal bank and mobile bank has shown a significant increase in quality.

So customer satisfaction score of our internal bank for our business customers has gone from 64% it's an internal measure, but when you are doing it versus the previous time, it showed the progress and it shows the progress that we've integrated a lot of feedback that we get from our customers into the product development.

And over the last 1 year, we have seen a significant increase in the quality of our products. We are also seeing addition of monthly active users to our Internet and mobile plan for business, which is 31% and 39.5% accordingly, which is very strong numbers, as you can see. Something which is very significant, in my opinion, and really reflects the strength of our franchise is also our payments franchise, which in the volume terms, we have seen 63% increase in our POS terminals and in physical POS terminals, our market share is 52.

When you combine it with the e-commerce, it's roughly about 50%, which I think by any measure, is a very strong position. And the overall volume is growing very well. And in fact, I think we are contributing to making the economy more digital and cashless with our new products and the good coverage of our POS terminals throughout strong Georgia merchants. Our NPS was broadly stable but slightly down from 55%, 54%, 52%.

But overall, as you can see, the long-term trend is up. The slightly down was due to increased volume of flow in the branches due to the -- due to more activity of remittances and immigration from the neighboring countries. We have taken measures to make sure that the flows are smoother, and it's fine now.

So, we should see that trend. We start to grow again. Now regarding the -- some of the monetary numbers because most of what we have described now is what is the basement for some of these figures that we'll talk about. So here are some good numbers that we've been fortunate to have in the second quarter and first half of 2022. Something that I believe is noteworthy.

It's the first quarter where we have seen return in equity higher than cost income as one of the analysts have highlighted and I hope that this will not be the last quarter to see those things so, we'll see. In terms of the operating income, it's -- in the quarter, it's up year-on-year 47.7%. And on a half year basis, almost 4%. Non-interest income, which was even higher by roughly 100%. And for the first half of the year Expenses were also grew 32%.

So it's not a small number, but still way lower than the overall revenue number and a half year basis was 30%. Some of it was due to acceleration of expenses when we have done basically 2 senior directors have left as we have announced to the market. In the way IFRS has done is basically that all the unlisted shares are expensed in the quarter when that kind of change happens partly that and partly some of the other changes.

Overall, I think the expense is still pretty strong, but I think given inflationary environment, it was nothing unusual. Cost income ratio has come down to 32.5%, well below our medium-term target of 35%. And for the first half of the year, it was 33.6%. And in fact, some of you may recall that when we were discussing the yearly results last year results, we were predicting this year to have negative operating jaws given the inflationary environment. But obviously, the revenue performance has been even stronger than the cost increases.

So this is what we are seeing. And in terms of before going to balance items, in fact, something that we closely monitor and maybe we should put this in the presentation, is our performance of our pre-provision level, which for the half of the year was 46%, I think 46%, but then for -- yes, 46%. But for the quarter, the pre-provision was up by 60%. That shows a very significant growth of the business, as you can see. And this is in a large term and obviously, [indiscernible] performed better in dollar terms, it's in stronger.

Now in terms of the base item growth. So, the loan portfolio grew by 10%, but to show you the business release in a constant currency basis is probably better measure is 17.8% Q-o-Q was 4.3%, which is higher than our medium-term guidance. But given the strong nominal growth in the economy that's steel economy is deleveraging in fact, because it's still lower than the lower than the nominal growth of the economy. Deposits had a very decent growth of 16% year-on-year and 9.1% again, in constant currency terms.

In terms of net interest margin, we were flat Q-o-Q and up by 60 basis points year-over-year and happy to dive in if there are any questions there and loan yields and deposits you can see. In terms of cost of credit risk ratio for -- we registered 60 basis points for second quarter 2022 and for first half year, 0.7%, which is closer, it's getting closer to long-term guidance of roughly 1% that we have, especially on the retail side. In corporate, we are seeing some recovery, and we'll see how that goes but we may see some more or in fact in corporate.

But overall, I think we are getting closer to the normalized level as the time is progressing. We are seeing, on the NPL level, largely flat as well as coverage ratios slightly down but overall, I think similar in terms of the long-term trend, what we have. So, all in all, in a summary, the net profit was up by 36% versus last year.

Last year also, we benefited from negative cost of risk, if you remember, in the second quarter 2021 and to show the overall business on a pre-crossing level has grown by 60%. Return on equity, 32.8% and 31.8% for the first half year. Now, what's interesting is that this performance has been done with very strong capital ratios. In fact, Corten it's 14%, above 2.3% above the minimum requirement. They have similar kind of buffers on other requirements. And when we look at Basel II fully loading estimates that we have, which will happen end of next year. is not much left, let's say, it's another 30-40 basis points.

So we are still already with the fully loading ratios where we have significant buffers about that. So what's interesting also, which some of the investors may not pay attention to is that our reported National Bank standard right now is restricted at the IFRS and National Bank has announced and has taken steps to make these numbers close. And in fact, we may have one reporting very soon. And from next year, we'll start reporting both numbers. And at some point, we'll just switch to for IFRS, which NBG will accrue. And we will see roughly 2% higher core Tier 1 ratios, which MBG has guided that they will introduce additional buffers to absorb that.

So, it will not be a source of additional capital. But it will still be very positive because the investors, you will see that the bank's core Tier 1 ratio is more like 16% to 17% instead of the current 4, which by any IFRS comparison. In fact, by peer comparison is a very healthy capital position and our return on equity is even more pleasant to see that it's done on a very healthy capital position. Liquidity remains strong, and we have very strong liquidity last year, we had too much, in fact, exert much which we've normalized, but still very high liquidity overall were healthy. very healthy numbers there.

So the long-term targets that we have of delivering through the cycle above 20% return on equity, we are performing very comfortably well above that target as well as roughly 1% constant currency growth, portfolio growth contents, also delivering a bit more than that there and regarding capital distribution, as you have noted, we have announced the -- we've announced the interim capital distribution of PLN 1.85 per share as well as continuing the buyback of stock.

So it's a combination of dudes and buyback, and it's only cold the first half of the year. So, it's an interim -- and then as the year progresses or in the beginning of next year, we'll discuss the full year and dividend on top of the interim obviously. So that's about it. Thank you very much. And I don't want to take more of your time.

And in fact, I'm happy to answer questions. Nini, would you like to...

[Nini Arshakuni, executive]

First question from Robert Sage.

[Robert Sage, analyst]

Yes. Thank you, can you hear me?

[Archil Gachechiladze, executive]

Yes.

[Robert Sage, analyst]

I've got 2 questions. The first relates to your very strong foreign currency gains. And clearly, I'd guess they're not sustainable at the Q2 level given the volatility in the Lari. But I was wondering if looking do you think there's been any structural increase in your FX gains on an ongoing basis? Or should we sort of expect they're going to fall back to historic levels of, I don't know, 100 or 120 Lari or something of that order...

[Archil Gachechiladze, executive]

Yes. So that was the first question, right? So let me take that one and then second question -- so the -- yes, yes, I really an industry Robert, I apologize, there's a lot of not coming in from your side. If you can mute... I can answer, and then we can go back to the question. So the FX, yes, we have had a very strong number, which was significantly higher than our historic performance.

Some of it is due to the economic flows which have increased, which we are experiencing strong economic growth. But also, we have benefited from remittances and the immigration activities that we have seen happen in the country. That may not be sustainable, but the overall increased business will be. So roughly, our estimate is we will see what numbers will come.

But we think that medium term, let's say, roughly 30%, 35% less should be sustained level. Having said that, some of the economic activity is still continuing. I mean as we are half or through the third quarter, we still see very, very strong numbers. So it doesn't look like it's going away soon, but obviously, there's component, let's say, 1/3 roughly, very roughly, and that may not be sustainable of that FX number.

[Robert Sage, analyst]

Yes. The second question was very simply that you drew attention and sort of pulled out of the cost increase that some of that related to the termination of the service agreements with 2 of your senior directors. Could you just give some sort of idea of the quantification of how much that might have been in the second quarter, just so that we can get a feel for the underlying cost inflation number?

[Archil Gachechiladze, executive]

So there was roughly GEL 11 million, which was associated with the early termination in this quarter so there is acceleration of those costs. Then we also had a change in the senior management compensation contracts where basically, we spend more upfront in the contracts than we used to. So that's having also an additional component to it.

So when you look, let's say, at the employee and other benefits there -- if you look at employee salaries, let's say, in tech bonuses, they're growing roughly 12%, 13%, 14%. And the rest is basically due to certain changes in extraordinary types of changes.

[Nini Arshakuni, executive]

So the next question is from James Hamilton.

[James Hamilton, analyst]

If I may, please. Firstly, on capital. Clearly, you've enhanced your buyback and you raised the deed as you've also suggested that your core capital ratio will go to 16% once the IFRS transition comes in. I was just wondering, should we be expecting any further capital builds from here? Or is it your strategy that as you are able to deploy, obviously, 32.8% to equity is very difficult to deploy as you generate some excess turnover what the balance sheet needs, will you be looking to return all of that to us one way or another or will you be looking to see your CT1 ratio continue to increase?

[Archil Gachechiladze, executive]

James, so -- it's a good problem to have plenty of capital, and we have increased, in fact, 2021 last year off of that, we -- whatever we returned was twice the 2019 level. And I think of 2022 will significantly increase the -- we have started, in fact, to increase significantly versus the interim dividend of last year that we announced.

So I think overall, we are distributing. So we obviously will always make a choice between distributing the capital and deploying it effectively. And between the choice what we have indicated to the market is 35% to 50% pay-out ratio, and that's what we'll stick to.

[James Hamilton, analyst]

Second, I mean, at the beginning, you described the period as extraordinary. And clearly, it was. I was just wondering if you could give us a little bit of help looking forward. If you can comment on the performance in July, could you just sort of give us some indication of the direction of travel going through Q2? Is it getting better still? Is it -- was it -- was it brilliant beginning in rapidly, how do you -- how should we feel about the direction of travel of the core business?

[Archil Gachechiladze, executive]

So basically, if you had new months about 2, 2.5 months of extraordinary activity that has slightly decreased in fact. But overall, I think medium-term investment is picking up in the country. So we had first couple of months, which was emotional you had some activity increase, and you have a lot of new sanctions coming in. So what's going to happen and how you're going to adapt and how -- what processes you have to adapt to it now, it's all stabilize.

People have put in systems to make sure that this is controlled well and what you can do and we cannot do and so forth, plus some immigrants have also gone back to Russia and some to Ukraine because as other parts of Ukraine are more stabilized. So we are seeing slightly less, let's say, remittance growth than we had a couple of months ago, but still very strong flows overall.

So that's why when we are, let's say, estimate in the first half increase of real GDP growth of 10.5% and estimating a full year of 9.2%, we are employing, I'd say, 7.5%, 8% real growth for the second half of the year at a higher base of last year because we had very strong last 2 quarters last year. So somewhat, let's say, stabilized but still very strong numbers. I don't know if you -- I answered James, your question and if you want to have more specific questions on that, I'm happy to continue.

[James Hamilton, analyst]

No, that's fine.

[Nini Arshakuni, executive]

So we have a question in the Q&A chat. On the FX loan book did it drop due to prepayments or lack of demand? From Steven [indiscernible].

[Archil Gachechiladze, executive]

So Steven, basically, that drop happened partly due to the fact that they translated into Lari. It's a smaller proportion. So overall, I think digitalization of the banking sector is going very fast given the fact that National Bank has built in different type of price incentives for a bigger proportion of Lari as well as bigger proportion of deposits.

So every marginal vitalization percentage is beneficial for us and for any bank basically. So that has driven for the system that basically meant that we are down to 48% dollar loans in the total book. And to put things in perspective, a few years ago, basically, National Bank said that they would target roughly 40% dollarization or they would be happy to see 40% dollarization over the medium term and it's roughly going from high 60s to down to 48% pretty fast. So, it's partly due to the fact that the more the Lari issuance than dollar plus, so that proportion is happening, plus you see that you had large strengthening is impacting, having a technical impact as well.

[Nini Arshakuni, executive]

There is another question also. Do you think you'll be able to meet your mid-term cost-to-income ratio of 35% this year from MW compounders?

[Archil Gachechiladze, executive]

It's a bit early to say, but it seems probable.

[Nini Arshakuni, executive]

We have a raise hand from Simon Nellis from Citi.

[Simon Nellis, analyst]

Just hoping you could elaborate a bit more on the margin outlook. I think it's been stabilized. Is that -- do you expect it to stay at that level? Or do you see any upside downside risks? And then just on loan growth as well, if you could walk us through how you see the outlook, what the pipeline looks like, maybe even a bit further along like into next year and even afterwards.

[Archil Gachechiladze, executive]

So first on the margins, we see it broadly stable. So, we basically are doing is that we are doing a lot of treasury operations, which basically has a very small margin, and that proportionately has grown significantly over the last 1 year. Had that not grown as a proportion of the overall portfolio and captive constant, we will probably be looking at 30 basis points higher probably than what we have.

But -- so it's apples-to-apples, let's say, when you look at the market, that's probably -- it would be more indicative. But it's difficult to separate that out because it's interest-bearing assets, and it's on both sides. So, it basically is pushing the margin down. But overall, I think flattish, I would say, slightly increased as it would be if you didn't have that kind of technical impact. So that's the outlook on the margin. Regarding the loan growth, as we basically said, as the economy performs stronger, and we are expecting a nominal growth of roughly 20% this year. We are looking at slightly below that loan growth.

As you can see, we have done on constant currency of 17.8%. Having said that, what we are seeing is relatively soft demand on corporate and mortgage loans, but there is strong demand on MSME.

On corporate, though, I believe that as corporates are, let's say, experiencing very strong profitability this year, they will prepare for large investments to come -- and as the geopolitical risks subside, let's say, over next few quarters, then we may see a significant growth there because they are in a very good shape, corporates are and we are seeing MSME growth continue given the strong economic growth.

So I think in line probably with nominal growth of the economy is more or less what to expect. And as the economy is doing roughly 10% or so, normal growth, that's what we should expect. That's what our medium-term guidance is, but it could be slightly more...

[Simon Nellis, analyst]

And just on the margin, to what extent has higher rates been supporting that? And I guess if you do see a bit of a slowdown rates come down, does that present some risk to the margin outlook?...

[Archil Gachechiladze, executive]

Well, there may be some of that, but then in dollar terms, the rates are going up. So, we will probably compensate one for the other -- so it will -- there's always place and to be significant.

[Nini Arshakuni, executive]

We have a question from [ Ashar Kaba ].

[Unknown Analyst]

My question was about your exposure to Belarus. You had some write-downs in first quarter. In general, if you could share high-level thoughts or plans, how do you see this business going forward? And in the extremely worst-case scenario, theoretically, if you need to close the doors tomorrow, what are the -- what is the exposure that we are looking at? Is it the equity or it's a bit closer to assets, net of cash, maybe just a thought would be helpful on this. And on a similar note, I remember years ago, you had exposure to Ukraine as well if you could confirm if there is anything left on your balance sheet.

[Archil Gachechiladze, executive]

Thank you, [ Ashar, ] for the question. I will confirm that there's nothing has not been for a very long time on Ukraine on our balance sheet and should would be reported, obviously, in our statements. On the pillars, we have last quarter, booked a significant provision under IFRS rules to anticipate the economic downturn that may be coming from the regional political turbulence that could have a wide economic impact on billers.

Having said that, we have not seen so far any significant impact and in fact, price versus increased flows in our bank has resulted in very decent results. Having said that, obviously, we understand that given the assumptions and limitations, we will react to whatever comes our way. And we are always ready to adapt what needs to be done, including provisioning or closing doors, as you described, if need be.

Having said that, we are in compliance with all the sanctions as a U.K. company, and we have been able to implement all of this and increase the back-office operations significantly to make sure that the compliance stays in check. So that's what we are. In terms of anticipating any write-down above the equity you need to be, yes, I don't expect any other expenses associated, but it's a highly imagine scenario, let's say, at this point and -- but we would not expect any additional exposure. So, there's no other credit lines or other things other than the equity from the group level at that point or any guarantees or anything of that nature?

[Unknown Analyst]

That's very helpful. And if I can have a second question. On a more positive note, you have quite strong liquidity. You had some -- you continue the share buyback. You just announced the dividend, you continue to post strong loan growth. You did some debt buybacks as well this year, if I recall correctly. So just wondering what do you see as a source of this high liquidity? Is it somehow related to the immigrant or it's all organic? Or as you mentioned, exports are rising, if there are any ties between those.

[Archil Gachechiladze, executive]

Well, it's mainly the overall economic flow. The migrant deposits are there, but they're not significant because the national bank requirement on liquidity is such that if you take deposits from non-residents, you get additional marginal liquidity requirement is such that it doesn't go into extra liquidity basically above a certain level.

So it's mainly the overall economic activity is resulting in higher liquidity. Plus, we have plenty of lines from our creditors, which are not utilized and we've been in a good fortunate position to be in a place where we have a very strong capital and very strongly quite plus unutilized lines which are not included in those liquidity issues.

[Nini Arshakuni, executive]

I don't see any questions at this stage.

[Archil Gachechiladze, executive]

Well, I want to take you away from -- at least for some of you on Acacia or take more of your time. I think results speak for themselves. In fact, we have been experiencing record revenue and lowest cost income ever in terms of Banco Degerhistory. But what makes me very happy is that our core numbers, which are part of the strategic targets that we have regarding the -- our digital offering, especially our Datum detail interaction, let's say, 46%.

Our monthly active users getting closer to 1 million, which a few years ago, it was just a couple of years ago, it was $300,000 as well as something which was not in the presentation, but it is in our results on the seventh page, the number of active individual clients year-on-year going from 1.3 million to 1.5 million. And we are talking about a country where the [ beta ] calculation is slightly above EUR 2 million. So 14.6% growth in a number of active individual clients.

So I think all in all, very strong numbers, not just in terms of monetary results that we have reported, but also on a number of strategic directions. And I forgot to say also on payments. where we have based strong growth in our acquiring business, and that business is increasing different types of innovation and products that we are rolling up -- so on that side, we will be increasing our offering as well. So all in all, thank you for your support and for your interest in our call. And with this, we will...

[Nini Arshakuni, executive]

I have one question, one raised hand from Firebird management.

[Harvey Sawikin, analyst]

Just a quick question. I mean there is some political concern about -- Georgia is walking a thin line between on the one hand, maintaining relationships with trading relations with Russia not joining sanctions. On the other hand, the people support Ukraine very strongly, and you can't check into a hotel and we say, as you know, without a statement of support for was in for new pain. So do you worry at all about any political setup, people understand that there were economic growth is so powerful in the other hand, feelings about Russia and Ukraine. Do you see any possibility of the effect...

[Archil Gachechiladze, executive]

So I think what we are saying is that although [indiscernible] has not grown this actions, the financial system has. And in fact, the U.S. government has published a detailed report appraising the National Bank as well as the local banking system for following those sanctions very well. So, this -- in terms of the sanction compliance on the financial flow side, it's all good. Now in terms of Georgia joining sanctions that is there.

Obviously, Georgia and population widely has -- is supporting Ukraine and you see Ukraine flags almost everywhere on the balcony people in the hotels in our branches and so forth. And if there are any, let's say, flare-ups, as you described it, we see some of it on the Facebook, et cetera. It's risky Georgia is trying to have a neutral now. Is there a risk there could be, but I don't see it as significant. I mean we have had our largest demonstration for many years, a couple of months ago in support of the EU direction of the country. But it was very peaceful.

More than 100,000 people came out, and it was a message to the government saying that Georgian population widely supports European aspiration. But that was about it. It was very, very peaceful and I don't see it growing into something valences loans, we've done nothing in history. So at least we don't feel it right now. Yes. Well -- and also, I would also add that on international, say, resolutions, et cetera, et cetera. Georgia’s for support of Ukraine whatever those kinds of decisions have been.

So that's also some quarter. Let me see this one more question in the chat. I guess. Do you see risk a Russian immigrants might seek to bypass sanctions from Georgia as the brand rescoping used as facility in resections, et cetera. We basically are aware of any of these risks. So, we have pumped up our back office to make sure that the screening of such transactions, if there can be any is done at a very increased level, let's say, because Russia is very country right now. So, any kind taxes too from or any kind of third countries is screened a lot.

So is there a risk? There's always a risk, but we have taken measures in maturing. In terms of the immigrants from Russia, most of them are, let's say, out of estimated 50,000. Let's say, the estimate right now is roughly half is IT specialists and then you have -- so it's really educated mostly educated -- highly educated, let's say, younger population.

And they are opening some as and restaurants and some companies, but it's not specifically not large businesses relocating to Georgia if that's what you mean. So, I don't see the significant risk, but we are aware of such risks, and we've taken later. Well, with that, thank you very much for your attention. I thought it would be even a shorter call, but it's taken almost an hour. So, I don't want to take more of your time. Thank you very much, and bye-bye.

[Nini Arshakuni, executive]

Thank you.