Lion Finance Group Plc, a Georgian banking group that controls Bank of Georgia, is planning to expand into the Central Asian market. According to CEO Archil Gachechiladze, the group plans to acquire large banks in Kazakhstan and Uzbekistan, as well as in the Baltics and the Balkans.
Interestingly, Lion Finance Group intends to acquire only major financial institutions — those ranking among the top three or top five in their respective markets. The company wants to scale up its digital ecosystem in larger markets and has no interest in small banks.
The strategy is expected to build on the group’s 2024 acquisition of Armenia’s Ameriabank. Ameriabank currently accounts for almost a third of the group’s total assets. The bank plans to increase its share of the Armenian lending and deposit markets from the current 23% and 20% to 30%, respectively.
Bank of Georgia was once a relatively obscure player but has transformed into a blue-chip company over the past few years. Currently, its shares are among the most profitable banking stocks in Europe. The bank’s parent company has joined the FTSE 100 index, with a market capitalization of $7.9 billion. Since 2021, the company’s shares have soared 740%, while the Stoxx Europe 600 Banks index has gained only 210%.
This growth has been primarily fueled by three factors: Georgia’s rapid economic growth, capital inflows since 2022, and a focus on digitalization. In a country with a population of 4 million, the bank’s mobile app is used by 1 million people daily and is updated every two weeks. In the second quarter, the group’s return on average equity (ROAE) was 27%, and its loan portfolio grew 23% year-on-year in constant currency.
According to Sheel Shah, a JPMorgan research analyst who recommends buying the company’s shares, the stock trades at approximately 7 times projected 2028 earnings. JPMorgan expects the group to expand its presence from two banks to five by the end of the decade.
Which banks might Lion Finance Group acquire in Kazakhstan?
Since Gachechiladze said Lion Finance Group is interested in banks that rank among the country’s top five, we can immediately outline the scope of potential deals.
Here are the top five Kazakhstani banks by asset size as of Aug. 1:
- Halyk Bank has $46.6 billion in assets and a $29.3 billion loan portfolio. The holding company Almex controls 62% of the bank’s shares.
- Kaspi Bank has $22.7 billion in assets and a $17.5 billion loan portfolio. The bank is controlled by businessmen Vyacheslav Kim (23.04%), the richest person in Kazakhstan according to Forbes, with a net worth of $7.8 billion; Mikheil Lomtadze (20.06%); and funds of the Baring Group, founded by American investor Michael Calvey (19.01%).
- Bank CenterCredit has $19.5 billion in assets and a $10.8 billion loan portfolio. It is controlled by Kazakh millionaire Bakhytbek Baiseitov (51.76%), ranked 13th among Kazakhstan’s richest people with a net worth of $858 million. Another 11.92% is owned by Vladislav Lee, whose net worth is estimated at $197 million.
- Otbasy Bank has $13.2 billion in assets and a $9.9 billion loan portfolio, equivalent to 4.6 trillion tenge. The government owns the bank through Baiterek Holding.
- ForteBank has $11.9 billion in assets and $6.5 billion in loans. The bank’s majority shareholder is Bulat Utemuratov (91.43%). The businessman is the third-richest person in the country, with a fortune of $5.4 billion.
Last year, some media outlets reported that ForteBank could have been sold to OTP, a financial group from Hungary.
