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Nini Arshakuni: [indiscernible] joining Lion Finance Group PLC's results call. Today, we are presenting our results for the fourth quarter and the full year of 2025. My name is Nini Arshakuni. I'm Head of IR, and I'll be moderating today's call. I'm joined, as always, by the Group CEO, Archil Gachechiladze. We also have on the line the CFO of Ameriabank, our banking subsidiary in Armenia, Hovhannes Toroyan; and our Group Economist, Akaki Liqokeli. First, we'll start with the presentations. And in the second session of this call, you will be able to ask your questions. And with that, I will hand over to Archil first for opening remarks, and then we'll dive into our performance and the operating environment. Archil, you can go ahead.
Archil Gachechiladze: Thank you, Nini. Hello, everyone. Thank you for joining the call. I will just have opening remarks followed by the macro review by Akaki. So as you can see, we have delivered a record quarter and a record year, in fact, with our net income growing by 20.9%, just shy of GEL 2.2 billion, delivering 28.4% return on equity. And in the quarter, that was just above 30% return on equity with 35.5% cost-to-income ratio and cost of risk, which is about half of what we usually expect through the cycle. So for the quarter, it was 0.3%, but then for the full year, it was 0.4%. Both of the strong franchises have delivered very good increase in the quality of the franchise, which we measure by the satisfaction of the customers as well as the pickup of the monthly active users on the retail front. And also, both of the franchises delivered above average or above expected or above guidance growth in our portfolio, especially on the credit side, but also on the deposit side. So we are quite happy with the results, and I would like to thank our Armenian and Georgian colleagues who have done a very good job in 2025. And as a kind reminder, Ameriabank full year -- in 2025 was the first year when Ameriabank was the -- for the full year part of the Lion Finance Group, hence, the renaming, as you know. And as you can see, it has delivered substantial good growth, not only on the balance sheet side, but also on the retail coverage side. With this bright note, I would like Akaki to cover our macro. As you know, both of the countries have enjoyed a record-breaking macro performance over the last few years, which is continuing year-by-year. So Akaki, would you tell us what to expect?
Akaki Liqokeli: Thank you, Archil. Hello, everyone. I will be presenting the macroeconomic update for our core markets, Georgia and Armenia. Starting with growth performance, 2025 was another strong year for both countries. The Georgian economy expanded by 7.5%, fully in line with our expectations and supported by strong consumption spending and resilient external inflows. Meanwhile, Armenia surprised on the upside, delivering 7.2% real GDP growth. For 2026, we expect this strong growth momentum to persist, supported by ongoing strength of services and public capital expenditure. Real GDP growth in Georgia is expected at 6% and within the range of 5.5% to 6% in Armenia. Due to this strong growth in recent years, as you can see on the right-hand side, per capita income levels in both economies have been steadily growing and converging towards Central and Eastern European peers. While the baseline outlook remains positive, uncertainty is still elevated. Geopolitical tensions in the region creates downside risks. However, both economies are well positioned to withstand potential shocks, supported by solid macroeconomic buffers and prudent policy frameworks. Upside opportunities could also emerge, especially from the ongoing implementation of the historic peace agreement between Armenia and Azerbaijan. Solid external inflows have also supported local currency strength. Georgian Lari and Armenian Dram have been relatively stable in recent years, recording modest but consistent gains against the U.S. dollar. Notably, real effective exchange rates for both currencies have stabilized, reinforcing our assessment of that currency valuations are broadly in line with fundamentals and supporting stable medium-term outlook. Currency strength is also important for low and stable inflation, which the 2 countries have enjoyed in recent years. The recent headline inflation uptick in Georgia is mostly related to food price pressures and core inflation remains low, reflecting well-anchored inflation expectations. Over 2026, we expect inflation to stay close to the Central Bank's 3% targets in both countries, underpinned by prudent monetary policies. In the second half of this year, we see a room for around 50 basis points cuts by National Bank of Georgia, while the policy rate of the Central Bank of Armenia is expected to remain unchanged as the current policy stance is assessed as broadly neutral. Both central banks have been very active in accumulating foreign currency reserves due to strong foreign currency inflows and stable exchange rates. By the end of 2025, current exchange -- foreign currency reserves reached record high levels of USD 6.2 billion in Georgia and USD 5.1 billion in Armenia. Importantly, the current reserve levels are above the minimum adequacy thresholds, and they continue to increase. Another key pillar for macroeconomic stability is prudent management of public finances. Georgia and Armenia have demonstrated fiscal discipline over the years. The Georgian government remains on a consolidation path with tight management of fiscal deficits at 2.5% of GDP and declining debt-to-GDP ratio. Meanwhile, the Armenian authorities have been successful in balancing ongoing spending needs with fiscal sustainability objectives. Despite elevated fiscal deficits in recent years, they managed to keep debt-to-GDP ratio broadly unchanged. This year, we expect fiscal policies in both countries to remain sound and supportive to growth, particularly through sustained public capital expenditure. And lastly, financial sectors in both countries have benefited from favorable macroeconomic environment and continue to support growth. We observed solid and strong expansion of lending, lower levels of loan dollarization and solid capital buffers. So this concludes my part. Back to you, Nini.
Nini Arshakuni: Thank you, Akaki, for the overview. Now we're back to Archil, who will discuss our performance first in Georgia.
Archil Gachechiladze: Just one second, let me share the presentation. So in Georgia, the numbers were, as we said, ahead of our expectations. So our net profit for the quarter was just shy of GEL 460 million, which was 17% growth on year-on-year and return on equity of 32.7%. And in terms of loan book growth, we were at 16.1%. As you may remember, we guide 10-plus percent. So 16% was a strong showing. And our digital monthly active users continued to grow by 15% year-on-year, reaching 1.8 million. We have our retail app and the business mobile app, both quite capable applications that do a lot of different things, and we have a list here. But what's interesting is that second year in a row, we won the World's Best Digital Bank by Global Finance. And there were very big names in the run-up at the end, big mobile digital banks basically, the biggest in Europe. So in terms of the monthly active users, you can say that we are up by 15%, but also on a daily active, it's up by more than that, which was 24%, achieving just shy of 1 million customers, which gives you an idea that the engagement is increasing. Customer engagement is ever increasing number, which is very good showing. Also on the legal side, so on the company side, we had increase of 14% year-on-year, achieving 133,000 companies that use our mobile application. And obviously, Internet then is used there as well. We are increasing our sales with digital and there, we have achieved new highs of 71% in the fourth quarter, achieving 71% of all products are being sold digitally. And you can see that in loans as well in deposits, we are increasing the share of sales which are done digitally. And that is based on small differences or small improvements that we do through to each product. On the Net Promoter Score, which is part of our DNA, no customer satisfaction and the focus on that is part of the DNA. And this NPS is more like a quick measure of how we are doing overall. We have achieved new highs of 76 showing at the end of December and it just shows you that our franchise is enjoying a high moment or the highest quality it has ever been, in fact. In terms of our payments acquiring volumes, we are up by 22.6% and market share of 55.8%, 0.1% down year-on-year. But basically, it's the strongest showing. As you can see, what makes me also very happy is number of people using our Visa, Mastercard or, let's say, the cards, not just Visa, Mastercard -- Visa, Mastercard and AmEx, because AmEx debit is something that we do as well. It's up by 13% year-on-year to 1.64 million people in Georgia, which is -- it keeps us -- it makes us happy to see that although we are a leading retail franchise in the country and in the region, we can say -- is also we can say that it's still increasing double-digit number of people using our cards on a monthly active user basis, which is something that makes us happy and lays a strong ground for further growth going forward. Our loan portfolio, as we discussed, grew by 15.9% or 16.1% in constant currency basis. On a quarterly basis, that was 4.5%. Deposits continued to grow 13.6%. Having said that, and we'll discuss it later that high liquidity is weighting on our NIM. So we would like to go below 40% market share. We are at 41% and we would like to do it so that we don't hurt the franchise so that people still have Bank of Georgia as the top choice for keeping their money. On the capital position side, as you can see, there are very strong buffers there on the liquidity side, slightly higher than we usually keep. On this note, I would like to ask Hovhannes to cover the Armenian side, which has delivered fantastic results, please.
Hovhannes Toroyan: Thank you, Archil, and greetings, everyone. I'll be showing the presentation. Yes. So as Archil mentioned, this quarter was another breaking record quarter for us in terms of performance. Our net profit for the quarter grew 38% and annualized stand-alone net profit grew about like 24%. Our return on equity was 26.8%. And the loan portfolio growth was also astonishing 28% in constant currency basis, and this was very diversified between both retail and corporate portfolios. Our time deposits grew 33% year-over-year, showing the very strong trust of our customers towards our franchise. Total attractions from customers grew 22% on a constant currency basis. And again, we are very happy with this. All these are well above the benchmarks and guidelines that we have shared earlier. We are very happy also to mark that our MAU and DAU ratios are growing at astonishing over 25% per annum. In terms of digital infrastructure, we do continue to heavily invest into improving our digital infrastructure, both internally as well as customer-facing part. And our mobile app has already incorporated most of the beyond banking services. So it has become a very good ecosystem for our customers to meet a number of their needs, including investments in terms of brokerage, my home, my car and so on and so forth. We have enhanced the digital payments in our ecosystem and mobile application. And technically, the number of transactions through our online banking have more than doubled within 1 year's span. We have launched our loyalty program in Q4 of 2025, and we are very happy and enthusiastic about it. We hear a lot of compliments from customers already. So we do believe that it's going to be another very strong pillar for us to bond our long-term relationship with our customers. And again, we do continue to invest heavily into financial education, both for the kids as well as for the adults. And MyAmeria Star is the application targeting kids and mostly educational part of that. And we are very happy to see the uptake on that as well. We do have very positive dynamics in terms of coverage of retail sector. Here, you can see more than 45% of growth for MAUs and DAUs. And we are currently serving 1/3 of the adult population of Armenia, and this gives us much bigger opportunities for growth in the local market, and we are very happy with it. At the same time, I cannot fail mentioning about very positive dynamics of digital uptake and engagement ratios that show that whatever improvements we are doing into our systems are actually to the benefit of our customer base. In terms of portfolios, the very strong macroeconomic situation in the country leads to very healthy and positive demand for loans. And you can see that we were able to increase our loan portfolio by 28% in Q4 of 2025 year-over-year. And we do expect to see very positive dynamics going into 2026 as well. As I mentioned, the growth has been very balanced between retail and corporate. But within retail portfolio, we see that the share of consumer loans is growing a bit faster than mortgages that constitute about half of the portfolio of the retail banking in Armenia. Deposits and attractions from customers are also growing very, very fast. And we can see that 22% roughly growth of total attraction from customers comes to prove it. It's very important also to note that 60% of our deposits already constitute deposits in AMD. And this is a result of a rapid increase of the number of customers. Over the last year only, we have increased the number of customers by 33%. At the same time, it is also a result of the very stable macroeconomic situation and very stable currency of Armenian Dram. Ameriabank has been continuing to improve its market share. We are at 21.7% in terms of loans and 19.5% in terms of deposits. And as we have announced earlier, this really shows the additional growth opportunities that we see in the local market. In Q4 alone, 96% of all the loans disbursed by Ameriabank retail sector were loans that were underwritten through our online channels, technically AI and machine learning based underwriting algorithms that cover it. That gives us opportunity to reach out to technically any Armenian citizen across the country with very low costs. In terms of liquidity, just like the Georgian peer, we have been over liquid towards end of the year. You can see from the ratios. And at the same time, in terms of capital position, I want to mention that while technically, the capital position was tight by the end of the year, we did enhance our capital position already in December. It just came into factor in January when Central Bank of Armenia approved it as part of our regulatory equity. We're talking about EUR 30 million. And effectively, by end of January, our capital position was only 17.5%. And later in early February, we were able to do the first inaugural USD 50 million AT1 notes that will elevate our capital position by another 86 basis points further. So we are very confident on both in terms of our capital position and liquidity position. This is very short. I'm going to hand it over back to Archil. Thank you.
Archil Gachechiladze: Thank you, Hovhannes. Those are very impressive results from Armenia and Armenia is continuing to deliver very strong results also on the macro side. And as Hovhannes mentioned, it's very good that we are increasing the number of customers that we are serving. And having said that, we only serve about 1/3 of the adult population in Armenia. So there's plenty of growth that can happen there. So now I will summarize what it means for the group results. So overall, the operating income up by 16.4% in the quarter and by 20.8% for the year, as you can see here, the net interest income was very strong showing of 19.9% for the quarter and 25.9% for the year. The reason why we don't show Armenia here for the year is that in the base year of 2024, 1 quarter is omitted. So it will not be a right comparison. As you remember, we acquired the bank end of March in 2024. So net noninterest income was up by 10% for the quarter and by 10.8% for the year. And I'll discuss a little bit there because there was some details there that we should discuss. And we did disclose it in the results. But I'll just mention that in the fourth quarter, net fee and commission income was up by 33.8%, but that was partly due to the fact that we got a new deal from the system providers for the card payment system providers, which was starting from the 1st of April. So it covered the last 3 quarters. In fact, it was booked in 2020 in the fourth quarter. So we got a few questions earlier today that what should you think going forward? And on the net fee and commission income side, I think going forward, we should expect growth to be somewhere between 15% and 20%, so on the high teens side because it -- not only we benefited for the last 3 quarters, but we benefit for the next 5 years with improved terms with the system providers. On the net FX side, we have seen a decrease in both markets. On an annual basis, it's up by 5.1%. So there, I think it's important to note that both of the currencies have been very stable. So we make more money at better margins when the volatility is there. volatility has been down. The competition has increased as well in Georgia specifically. But especially when you have a one-sided bet when the currency is getting stronger and the National Bank provided a backstop to about GEL 2.7, GEL 2.68 per dollar. That basically is a one-sided bet. It's hard to make money there. So that's what we have been experiencing, similar kind of trends in Armenia as well. But if there is volatility, we'll make more money. If there's no volatility, we will be flattish to slightly increasing going forward. So I think it's already reflected that low volatility is already reflected in the numbers. And going forward, we expect positive dynamics. Operating expenses were up by 14% for the group on the Georgian side, slightly higher than the revenue. But going forward, as we said, that overall as a group, we are expecting to have neutral or positive operating leverage. As you can see, in the fourth quarter, the group was 35.2% cost income, but notably, Armenian side was 40.5%. That kind of drop is partly for the cost control and partly due to the fact that third quarter was the last one where we amortized the retention bonus arrangement that we had with the key managers of the bank. So going forward, as I said, we expect neutral to slightly positive operating leverage going forward. Loan portfolio growth was well ahead of our guidance, close to 20%, 19.7% and the last quarter was 5.8% where Georgia, as we said, contributed 4%, 4.5% and quarter-over-quarter growth in Armenia was 8.5%, which was very significant. Overall, I think Hovhannes did mention that 28% was ahead of our expectation in Armenia in terms of growth. But what's interesting also is that last quarter -- fourth quarter of 2024 was a very big jump in loan growth. So with that high base to grow at 28%, especially on a Q-over-Q basis, you get the idea that the activity was very strong. Armenia overall is -- there's a lot of positive dynamic happening there and a lot of businesses are expecting to grow. So on the deposit side, we grew 17.3%, as you can see the breakdown there as well. Both of the franchises are enjoying very high liquidity, which shows strength on one side, but it also is a weight on our cost of interest. Net interest margin was slightly reduced in fourth quarter, as I said, partly due to the fact that it was increased cost in Lari and AMD. So local currency is becoming both markets, in fact, higher proportion and the costs there have been a bit higher. That will be a big focus going forward over the next couple of quarters. Cost of risk, we were down at 0.3%. So for the annual costs came 40 basis points. Our NPL ratio remained 2.1%. And although we had a slight increase in Armenia, but slight decrease in Georgia. So overall, as a group, we are at 2.1% NPL ratio, which is just fine. In terms of NPL coverage, mainly the decrease there is automatic. We didn't change any rules. In fact, the main reason why that change happens is because the proportion of the NPL ratio is increasingly towards the unsecured. So there, basically that's what it's resulting. Profit before one-offs, as you can see, we had 22.7% growth in the quarter. So it was a very strong quarter, in fact, a record quarter. And for the annual growth was also by 20.9%, which is very strong and Armenia played a very good role there. With return on equity for the quarter at 30.1%. Nowadays, every time return on equity starts with 3%, I'm relatively happy. And for the full year, I was less happy because it was 28.4% and not starting with 3%, but who knows. Return on average assets, as you can see, was up slightly from the previous quarter and for the full year, it was 4%. All in all, I think it's something to note that leverage ratios in Georgia and Armenia are very low. So we have almost twice as much capital as our peers in Eastern Europe. As a result of this, we have declared a dividend, which is an increase for the full year of 16.7%. Having said that, we are laying significant buffers in both banks for strong growth because we have been -- over the last 3 years, in fact, we have been growing more than we indicated as our medium-term guidance, and we want to be able to have that flexibility of deploying capital where the growth opportunities are. For example, in Armenia, we did indicate at the acquisition that we were going to deploy the retained earnings, which are quite strong, to fund the growth. And that is very important to have that flexibility and ability as a group, which is well funded, on one side, to pay dividends, which is growing year-by-year and a CAGR of 28.8%. But just last year was 16.7%. And going forward, we expect positive dynamics there as well as ability to deploy our capital in growth opportunities, be it organic or inorganic if it comes along. That's basically that. And as a reminder, our strategy is to be the main bank for our customers and be excellent in customer experience and with our eyes on profitability with annual book growth of about 15% and profitability of 20-plus percent, over the last few years has been closer to 28% to 30% and dividend payout ratio between 30% and 50%. And there, we have, as indicated, in fact, a couple of years ago, we've been on the lower side, which reflects our higher than guided growth over the last 3 years. That about that. And let's open up for questions because I think questions -- Q&A is usually the most interesting part, not only for our audience, but also for us.
Nini Arshakuni: Yes. So we can open the floor for questions, and we have a few raised hands from the analysts. So the first will be Sheel Shah from JPMorgan.
Sheel Shah: Great. I've got two questions, please, if you can help me. First, can I ask about the NIM outlook for the business going forward in the context of rate cuts coming in Georgia or expected some of the funding pressures you've seen in the fourth quarter. And then you've also said the local currency deposits, you're going to be focusing on those, I presume on the cost of those going forward. So I'd be interested to hear, firstly, on the NIM outlook of the business going forward. And then secondly, I'd like to know a bit more about the tech infrastructure of the bank because we can clearly see the output of the tech in terms of the NPS score, the growth in the number of mobile active customers, the number of sales on the digital channel. But I'd be interested in how many of your applications are on the cloud? What sort of platforms are you using? How many core banking systems are you using? What are you doing in terms of AI, which I noticed is newly on the slide. So a bit more information on the tech stack would be interesting, please.
Archil Gachechiladze: So on the NIM side, you did mention all the negatives, and you didn't mention the positive, which is deploying this extra liquidity. I mean, we are drowning in extra liquidity, which we either will deploy or push out of the bank. So that's -- so on balance, we'll either be flat to slightly positive on the NIM side, and that's in both markets. On tech side, we are either the largest or second largest technology company in the whole region. We employ 1,000-plus tech specialists either or digital specialists, in fact, be it on the programming side or just digital workers. We have translated that into the good numbers as well on the customer acquisition side as well as the balance sheet growth. A few years ago, we basically -- first of all, our core banking in Bank of Georgia is homemade. So it's fully homemade as well as the main applications, the retail app and the -- on the mobile app on retail as well as business. In Armenia, I'll ask Hovhannes to cover it in a couple of minutes, but mostly homegrown there as well. But basically, we have a few years ago, said that we want to be on cloud or cloud ready. So about 3, 4 years ago, we started to integrate that thinking in the design and everyday development, and we have been chopping up our core system into smaller pieces connected with APIs, which allows for the scale up not to be too expensive in different parts of the business. So it's -- many parts of our data is on cloud and the rest can be on cloud any minute, but it's a cost-benefit exercise on which case because -- yes, that's because it's not cheap. But otherwise, in terms of technical capability of putting everything on cloud and having it in smaller pieces, 90% is done. I mean there are small pieces that we are rewriting and changing. But otherwise, it's very well developed. Also on the AI side, we are experimenting in many different directions. Chatbot is the most obvious one, but we have done a lot of different testing of different capability now in the processing, payments processing, AML and other types of applications as well as on the risk and underwriting. So there's -- while we focus on AI, a lot of times, we understood that there's more to be done on the automation side. So there's a lot of work going there. But not much more to report there. Only thing I can say is that it's a big focus and going forward, it will deliver efficiency, but also more importantly, the speed of execution and quality, which will benefit our customers. Hovhannes?
Hovhannes Toroyan: Yes. In the Armenian operations, we are using the 2 major software from third parties. The core banking is from the leading provider in the country. And at the same time, CRM is one of the leading international solutions that we use. Other than that, the other major parts, namely mobile banking, online banking are internally developed. At the same time, we are also technically one of the largest technological companies in the country despite tech being one of the strategically important sectors for the country with a number of employees engaged into tech development that we have. And we also have this agile framework. So product teams are working through this agile mechanism. And we do deploy machine learning and AI in certain areas, namely in a number of areas to improve internal efficiency as well as to improve the customer experience. For example, one of the latest beta types of the AI applications we've seen internally was analyzing the needs or potential needs of the customers to be able to come up with the best next offer for the customers. As I mentioned, 96% of all the retail loans that we've disbursed in fourth quarter were through our online and automated models, machine learning and AI models. So technically, for us, that means, a, underwriting process is 38x cheaper than it would have been through conventional lending technique; and b, it also means outreach to technically anybody on the territory of Armenia. And obviously, I mean, that's another perspective that we look at it. And clearly, we are also at the doorsteps on unleashing all the opportunities that these new technologies in hand for our sector. So we are very optimistic that we're going to be using AI in general wider with better benefits.
Sheel Shah: That's very helpful. If I can have just one quick follow-up. When you say that you have the potential for outreach to all of Armenia or all of Georgia, is this a direct-to-consumer method? Or are you using sort of online tools -- online aggregators? What's your method of distribution of these loans?
Hovhannes Toroyan: In case of Armenia, it's technically mostly direct. We are rarely using other platforms as an aggregator to outreach our customer base. But technologically, and we do have a number of customers today that can become a customer of Ameriabank remotely sitting on their couch. They can apply for a loan remotely sitting at their home or office. So this actually -- with the pretty significant penetration ratio of mobile and Internet usage across population, we see our digital platforms, our own digital platforms gaining very good and positive traction over the last few years. And that's actually also being represented by more than 45% growth of our MAUs and DAUS. As I said, our transactions more than doubled, 96% of retail loans through online platforms. So all these are kind of early indicators that whatever we have been doing for the last 4 or 5 years are actually kind of giving their results already.
Archil Gachechiladze: I'll cover the Georgian side. So we have 1 million users daily in the country of 3.7 million people. So short answer is, yes, we do it directly. And the long answer is that we are the biggest brand, not only in the financial intermediation where the top of mind is 57%. But we are the biggest brand in the country, period. I mean, it's bigger than any other brand. So when we say, do we do it directly or not, yes, we do it directly. We still have a very significant branch network, very significant ATM network. And we are the biggest brand in the country overall and plus in finance. So that basically gives you an idea that we are not the back office or some kind of intermediary, but we are the main intermediary in the country.
Nini Arshakuni: So the next question is from Alex Kantarovich from Roemer.
Alexander Kantarovich: Yes. Can we please differentiate between outlook for loans between Georgia and Armenia. Clearly, the dynamics are somewhat different. This is my first question. Yes, and I'll follow up with the second one.
Archil Gachechiladze: [indiscernible] I'll do it. So 10-plus in Georgia, 20-plus in Armenia.
Alexander Kantarovich: That's very short and sweet. And if I can address the elephant in the room, inclusion in FTSE 100, do you expect it to happen imminently?
Archil Gachechiladze: As economists like to say, all else being equal, yes.
Alexander Kantarovich: Yes, that's great. That's great. And finally, I appreciate that you deploy your capital very, very efficiently. But is there a scope for increasing the levels of distribution from 30%.
Archil Gachechiladze: Absolutely. But as long as we grow at 20% instead of 15%, as long as we are open to the M&A opportunities being major banks and smaller economies, and such opportunities may come along, we would like to keep a little bit of buffers there. If either one or the other don't play out for a longer period of time and we grow at, I don't know, 12%, 13% instead of 20%, like we have been growing over the last 3 years, then of course, we will return more capital and our distribution is between 30% and 50%. So I think it's a mirror image. So either we grow more and we deploy capital. And I think we have been very disciplined and showed to our investors that we don't throw around the money. So we either deploy it in businesses which are generating 25% to 30% return on equity or we are looking at acquisitions of similar kind of returns. So if this doesn't happen, then of course, we will return more. But I hope it will happen. So until those things are happening, we will be on the lower side of the distribution guidance of 30% to 50%. And if it happens less, then we'll grow capital returns.
Nini Arshakuni: The next question is from Jens Ehrenberg.
Jens Ehrenberg: A couple of questions from my side. Firstly, just on Armenia, I suppose it's very good to see more sort of digital uptake there. It feels like with sort of 11% of penetration, the growth headroom there is still really enormous. Is that the right way to think about it, given you're sort of roughly 47% in Georgia. Is the opportunity really that big. Secondly, on Armenia, I think we've had quite a material improvement in the cost-to-income ratio in the fourth quarter. And I appreciate you touched on that earlier. But just going forward, is sort of the low 40s level, do you reckon that is sustainable for Armenia going forward? And then lastly, I suppose, on the Georgian side, I believe we had -- one of your key competitors talk about their strategy yesterday and the intention to try and grow more on the retail side in Georgia. Just curious to see how you see the competitive situation on the ground at the moment and really what you expect going forward there?
Archil Gachechiladze: Hovhannes, do you want to take the opportunities of growth on the Armenia side?
Hovhannes Toroyan: Sure. We have indicated earlier that currently for midterm, we do envisage to grow our market share to 30%. So this is our midterm strategic objective as of today. Obviously, I mean, that's going to be a moving target as we go forward. And you have seen that over the last few years, we have improved our market share significantly. And we do anticipate to be outperforming the market in the year 2026 and next 2 years as well. So in that case, theoretically, maybe in a bit longer term, we could get closer to the market share where our Georgian peers are, but current target is at 30%. So that's kind of where we want to be first, and then we'll see how it goes. In terms of cost-to-income ratio, we do believe that the ratio that we have reported in fourth quarter is more than sustainable. Moreover, as I mentioned, a number of initiatives that we've done within the bank have significantly improved our cost base. So we do expect to continue in that direction further. So I would say I would not be very surprised to see the higher 30s in terms of our cost-to-income ratio in the coming years.
Archil Gachechiladze: Yes. Regarding the competition, I think, first of all, I cannot comment on competitors' statements. The only thing I can say is that competition on the ground in each and every direction is nothing new. So as you can see, over the last 20 years, there has been a pretty strong competition between the 2. Having said that, I think both players have been cognizant of the fact that they don't want to destroy the profitability. So I think we are seeing a significant push and effort on the side of the quality, in terms of user experience, in terms of easiness of use, et cetera, et cetera. And all of that, I think, will continue. Having said that, we believe that we are very well placed to continue delivering the strong numbers well ahead of the whole banking system.
Nini Arshakuni: So we have the next question from Ben Maher from KBW.
Benjamin Maher: Yes. Just got a couple of questions. The first one is on market shares. Obviously, you mentioned you've been growing it in Armenia. I noticed there was a small decrease in the quarter in Georgia. I was just wondering if there's a particular reason for this? And also, could you just please clarify your -- I think there was a point on liquidity where you said you wanted to keep the deposit market share below 40% in Georgia. And my second question is just on consumer lending. It has been very strong through the year. Is this just household releveraging? Or do you think that's potentially early signs of some financial strain. I will say asset quality has been doing very well. So just interested in your thoughts. And then on the share of time deposits in Armenia, that's risen year-on-year, although it was down slightly in the quarter. How do you expect the share of these deposits to evolve in 2026?
Archil Gachechiladze: I think, Ben, I would not read too much into the quarterly changes of market shares. They are rather volatile. So let me show you the -- what you're referring to. So you're referring to this change here, the last quarter. And I would say, look at the longer term, look at 10 years or more. For this particular year, you can see that 37.6% has become 37.8% for the full year. So it's flat to slightly increasing and competitors' numbers are different. So that's that. And in terms of the retail deposit market share also is very strong. Here, on the total deposits, we're trying to decrease it below 40% without losing the preferred status in people's mind in terms of keeping their money. So we feel very strong on the local market, in fact. So when you look at the -- I think the key characteristics when you look at the quality of the franchise is the NPS score, which kind of is like a body temperature measuring the health of the service. But inside, there are a lot of different subsegments. Top of mind, most trusted, those are some of the things that we are watching at, and all of those are basically at record highs. So we are in a very, very strong position. I can say that probably the strongest position that the franchise has ever been in terms of the quality of the franchise. And that's on the back of a very strong macro performance over the last few years and double-digit growth of average incomes as the unemployment rate comes down. So overall, very strong macro and a very strong franchise. So that's the combination that we have and very similar in Armenia. Hovhannes?
Hovhannes Toroyan: Yes. It's very similar technically in Armenia, but we do expect to grow, obviously, our market share in the coming years, as I already mentioned. In terms of the structure of deposits, I think it would be fair to anticipate similar changes in coming years because we do anticipate very stable macroeconomic performance and FX exchange rate in the country. At the same time, the more we cover retail segment, the more AMD-denominated deposits share is going to grow over years. So I'm not sure about the same dynamics in terms of the speed of change, but it would be fair to expect that in the coming years, share of AMD deposits and current accounts will be slightly growing.
Jens Ehrenberg: Great. Sorry, on the consumer lending, strong growth. Is there any obvious reasons behind that you see in both markets?
Archil Gachechiladze: So consumer growth in both markets has been very strong. In Ameriabank, I think it's partly due to the fact that our offering has become much higher quality in terms of the user experience and the reach in terms of offering has been much wider as well. In Georgia, we are in a leading position, and we have seen Georgian consumer, their incomes growing double digit 5 years in a row and first 2 years was high teens as well. So I think it's a very strong base. We are not seeing any signs of any credit quality deterioration. We watch it very carefully in different subsegments of credit. So yes, so no signs whatsoever at this point. And in fact, if anything, there are very, very strong signs on the credit quality side on all around. The only part where we saw a little bit of issues were smaller hotels in the regions, which is like 1% of portfolio or less. And there, we have tightened the underwriting 2 years ago, and we described it in different qualities. But in terms of the large corporate, in terms of real estate, in fact, there was a big focus, and we have seen a much stronger performance than anticipated. In terms of all different types of consumption, investment, there has been a very, very strong performance all around. And in fact, people underestimate the amount of investment portfolio that is geared up to invest in a lot of different segments in Georgia, especially on the energy side, especially on the logistics side and other things. And Armenia is slightly different sectors, but same. Please, Hovhannes?
Hovhannes Toroyan: Yes. I mean, I'm totally in the same line. So technically, the disposable income of the households over the last 5, 6 years have grown immensely. And as Archil mentioned, our digital propositions have improved. But also, please keep into consideration that during the last 2 years, we have doubled the number of customers that we're serving. So technically, in our case, we have also this very significant growth of the customer base. And clearly, this also is additional market for us to go out there and present our different propositions, including consumer finance opportunities.
Nini Arshakuni: So we have another question from [ Dmitry Vlasov ].
Unknown Analyst: Congrats on a very strong set of results. So my first question is about cost of risk. You have a guidance of around 100 basis points over the cycle. And my question is, do you have a view for 2026? And how will it be different for Armenia and Georgia? The second question is about the potential M&A. Is my logic correct that it's mostly about the right opportunity, right timing and the right price rather than you waiting to maybe scale Ameria first and then sort of deploy capital elsewhere. Yes, those are the two questions.
Archil Gachechiladze: On the cost of risk side, you rightly said that between 80 to 100 basis points is through the cycle guidance that we provide. Having said that, we've been well below those numbers when the macro growth has been bigger and the performance has been much stronger than average in the history for both countries. And I think you can apply that rule. In terms of the M&A, you're absolutely right. I mean, we are opportunistic. So we scan different markets, and we look for the right opportunity and right price, and we are quite disciplined about it. So we don't have to do any M&A. But if the right opportunity comes up, we would like to be in a position to do that. So that's our approach. So it may be that we do something and maybe we don't do anything. And in terms of what we are looking for, we are looking for major players and that by -- just by our scale, that means that we're looking at smaller markets, unfortunately. But we do prefer to look at well-established players. And in fact, if we can add value in terms of applying our approach to customer care and technology, usually, we do, we like those kind of stories where it's a well-established player, and we can add value by putting some of the approaches that we have to customer care and technology in place. And that, I think, can be very beneficial for the franchise, for the country where we may be going as well as for our shareholders. Also, we look at -- we don't like turnaround stories. So banking is a leveraged business. So we are very careful there. And we like good teams. We are very lucky with the team in Armenia. It's a fantastic team, and we have done everything possible to retain the whole team, and we are very happy to see them stay and deliver fantastic results. We may not get as lucky every time, but that would be the idea.
Unknown Analyst: That's very clear. Maybe one small additional question, if I may, about how 2026 started for you so far? Is it in line or maybe even a bit above your expectations?
Archil Gachechiladze: 2026 started very well. So a strong start.
Nini Arshakuni: We have one more question from Simon Nellis.
Simon Nellis: Apologies if this question has already been asked because I had to drop off just for a little bit. It's around your capital return strategy going forward because I think you've been at the lower end of your guidance range as you reinvest into the Armenia business. Is that still the case? Or are you going to up the payout over time?
Archil Gachechiladze: Until we are able to grow at the rates which we have been growing, which is blended 20%, probably we will be on the lower side of the capital returns. Also, I think our buffers allow for us to be a bit more opportunistic if nonorganic comes along. If one or the other of those do not happen, then obviously, we would be increasing to the higher side of that guidance, which is between 30% and 50%. So we've been on the 30% side. But obviously, as things mature, then we will be increasing that significantly. But Short term, I think we are luckily in a situation where we're growing well above our midterm guidance.
Simon Nellis: And are you still reinvesting the dividends into -- I mean, you're not paying dividends out of Armenia and you don't intend to.
Archil Gachechiladze: We have not, but we will be looking at slight upstreaming, especially because we have had ability to put the Tier 1 instrument in place, which provides significant buffers there. But we'll be watching the growth opportunities there. Quite frankly, I believe that Armenia has been doing very well. In fact, as a macro story and geopolitically, they are huge positive moves. And when big investments happen, I mean, there have been just a couple of big investments, so honestly, you want to mention that have been announced.
Hovhannes Toroyan: Yes. Very recently, the Vice President of the U.S. was in Armenia and around this whole peace treaty and TRIPP corridor, there have been mentioned several very significant investments into AI, data center, technology institutions, nuclear power plant and a number of other infrastructure projects like railway, roads and so on. So we are talking about USD 4 billion to USD 9 billion of potential investments into the country. And for our economy, it's really huge and the potential positive impact of that on the economy and subsequently on the financial sector could be really very decisive in the coming years.
Archil Gachechiladze: So Simon, all of these positive things, they need banking, and we want to be able to bank them properly without much limitations. And I think our capital position and liquidity position allows us to be flexible. And if we find that we are growing at, I don't know, 12% instead of 25%, then we return more capital. I mean we are quite cost conscious and quite disciplined on capital side, and we act as shareholders, in fact. So yes, I mean, so far, we have been growing more than we guided medium term, and that's true for the last 3 years in a row, almost 20% growth of balance sheet. And going forward, if that continues, we'll be returning capital, but on the lower side. And if we grow less, then we'll return more capital.
Nini Arshakuni: So I don't see raised hands. There is just -- maybe two questions that I'll read. One is on Armenia. Can you please confirm the growth in Armenia is self-funded? And also if there are any inorganic growth opportunities in Armenia. So there is two questions.
Archil Gachechiladze: Yes and no.
Hovhannes Toroyan: In Armenia, we are self-funded in terms of not receiving any funds from within the group. So there are not any intra-group funding allocations or capital allocation as of today. But at the same time, we are also very actively working with a number of development financial institutions. And in 2025 alone, we were able to attract USD 400 million equivalent funding from the DFIs that also improved our liquidity position in foreign currencies. It's kind of long-term financing for us to be able to serve the needs of our customers. So technically, as a fully independent entity, yes, we are funded by the funds of our customer base as well as our partner DFIs, if that's the question.
Nini Arshakuni: And then this question is for Archil on MBS. So it says a couple of years ago, you said you won't push on MBS as hard given the costs associated with it, but yet it keeps improving. How did you do it?
Archil Gachechiladze: Just can't help it. It's part of DNA now. I think customer satisfaction and the focus on that is key to long-term success of any franchise, especially when you are touching lives of millions of people. So I would keep that focus.
Nini Arshakuni: We don't have any more questions.
Archil Gachechiladze: Excellent. On this bright note, I would like to thank you for your interest and for your support that we have felt not just today, but over the long period of time, for your trust. And I would like to thank the Armenian and Georgian team and the whole Lion Finance Group team for really doing your best and delivering consistently very good results. As long as we make our customers' lives better, I think we'll be in business and going well. So thank you for your support, and let's look forward to a very strong start of the year, and I hope some good news very soon as well. So thank you.
Nini Arshakuni: Thank you, everyone, and see you next time. Thank you. Take care.