Hello everyone, welcome to Bank of Georgia Group PLC's conference call with investors and analysts. My name is Nini Arshakuni, I'm head of investor relations, and I'm joined today on this call by the Group CEO Archil Gachechiladze. We are holding this call in relation to the proposed acquisition of Ameriabank that we announced earlier today, and I'll hand over to Archil who will start with his opening remarks and afterwards you will be able to ask questions. Thank you, and I'm handing over to Archil.
Thank you, Nini. We have very good news this morning. As you saw in the RNS announcement, we have signed an acquisition, signed SPA for the acquisition of Ameriabank, which is the leading bank in Armenia, which is next door to Georgia, obviously, and it's a very strong franchise that we've agreed to acquire at 0.65x book and more importantly 2.6x fee. Let me open the presentation and walk you through the main terms of the transaction and the rationale as well as the indicated timeline. As I said, this is an acquisition of 90%. 10% will be acquired by EBRD where we have a put and call option agreement after three years' time at a pre-agreed yield.
So the acquisition is at 0.65x, which we believe is a very attractive price, 2.6x P/E, based on the end of October NAV, so we are benefiting from the few months after that as well. It's 100% cash transaction and no dilution to BOG shareholders. That is an important note which I hope was evident from the announcement. What we really like is that Armenia is an attractive market and more about it a little bit later on in terms of the prudently managed macro environment, good growth trajectory, as well as the expectation by IMF and other players of the market to grow at mid-single digit. Financial impact is going to be very positive.
So it's accretive because we are doing it with our own equity and it adds about 22% net income to our historically, especially if you look at nine months, which is what we are disclosing, audited of 2023. It's about 22% additional net income. What's very important also is that given our strong capital position, we are not changing any of our dividend or capital distribution policy. So we have historically done dividend as well as share buybacks and have indicated so and we are not changing the policy. We are planning to close it in March of this year, so next month, 14th of March will be the AGM date. I see Robert Sage has a hand raised. Robert, if you don't mind, I'll go through the presentation and then we'll have Q&A.
So in terms of what the bank is, it has 20% market share in terms of loans, it's number one. In terms of the deposits, it's number two, but very closely followed. It's basically the same size alongside the other competitor. 1,800 employees, 420,000 customers, about $3.5 billion of assets and about $500 million of shareholder equity. Net income reported, so these are management numbers, obviously, not yet audited, but they're management numbers. Last year net income was $117 million. This is a highly profitable bank with almost 25% return on equity. It's top-of-mind bank in Armenia. Many of you may have heard already about Ameriabank and it's a very good institution that we are honored to have a chance to unite and we look forward to more development and growth.
In terms of the rationale, as I mentioned, Armenia is very similar to Georgia in many ways and we'll see it on the next page where we'll have a side-by-side comparison with slightly less banking asset penetration than Georgia has, so that means attractive growth opportunity. We really like the fact that Ameriabank is a top franchise in the country, very well recognized and well known with a very good management and we are retaining the management there, which is another positive of this transaction. Acquisition allows us to increase the scale, but more importantly, it allows us to tap the growth opportunity in the Armenian market where the market share there is 20%. Here where we are, we're just shy of 40%, so it's not possible to grow much more than that in terms of the market share in Georgia, but more can be done with Armenia.
Obviously, the fact that we are doing this with our internal capital without any dilution and adding 22% to our net income, historically speaking, that is a significant attractive opportunity, especially the attractive valuation. So a few words about Armenia and Georgia side by side. So 3 million, 3.7 million. In terms of the nominal GDP per capita, it's exactly the same, so $6,600, $6,800, and that's historic. This year we're probably looking at $8,000, both countries. Exports and imports are similar. FDI has been less in Armenia historically, although 2022, this is an average of five years, but 2022 was about 5% and 2023 three-quarters is about 3%, so FDI is easily increasing. What's very good is that inflation targeting and the local currency has been very good. So local currency has been broadly stable. Inflation targeting works very well and there's very good fiscal discipline in the country.
So very similar to Georgia in many ways and slightly better managed in terms of the inflation targeting, in fact. So when you look at the historic growth numbers over the last 10 years, Georgia and Armenia have been one of the top growing countries in the wider region. And when you look at the IMF expectation of growth for Armenia, it's 7% for this year, but then going forward it's 4.5%-5%, which is exactly the same for Georgia. So in many ways similar to Georgia. Banking assets have grown by about 19.3%, so about 20% in constant currency. As you can see, loans to GDP is slightly less than Georgia's, 61%, which is 49%. So one could grow that little by little over time. So that means our expectation would be there would be higher growth in Armenia.
Also, you can see on the next slides where we have the list of banks, the top three banks only have 43% there. Obviously, we believe that for the size of the country, it makes more sense to have more consolidation there. So there's more growth opportunity there. So as you can see in loans, it's a strong leadership position. And in deposits, there are two very similar players there. So these are historic numbers that are giving you an idea of what the growth has been. They are not, so the right numbers here are based on the preliminary IFRS results by the company, while the left side has been restated according to our policy. And there's slight changes to the policy there, so that's why we're not comparing it directly.
Although if we took their management numbers, you can see that the loans have grown by 30% last year. Deposits have grown by about 12%. In terms of the net interest income has also grown about 48% year-on-year in 2023. And net fee and commission income, there's a slight difference where they account some of the fee expense differently from ours. They put it in other expenses instead of fee expense, so that's why it's not directly comparable. But if you compare with two management numbers, you would look at 54% growth in net fee and commission income. So very strong growth. There's an FX decrease of 36%. That's due to the fact that they had very good margins of 22%, very similar to Georgia. So you can see that this is in local terms.
As I said, $117 million in terms of return on equity is about 25% as we covered. We see plenty of opportunity, although it's a very strong brand and very good management. Just a few words about the management. This is the management that has taken this company from under 1% market share 15 years ago, so from 2008, to leadership position over these 15 years. I have to announce that we feel that the fit is very good, the chemistry is very good, and the management has agreed to stay on. We believe that this is the management that will carry on good growth and we can always strengthen it with our experience. What we see here is that the number of individual customers is about 400,000, while we have 1.7 million. We have 47% of the population as our customers. They have 15%.
So there's plenty of organic growth there. In terms of digital monthly active users, as a percentage of customers, we have 73%. Ameriabank has 34%. So there's more that can be done there in terms of strengthening the digital capabilities and delivery of different products and the channel and so forth. So you can see as well that in terms of number of digital transactions, 48%, in our case, 63%. So there's plenty to be done in terms of retail, especially on the digital front as well as on the SME side. In corporate, I think they are doing an excellent job. In retail and SME as well, they're doing very well, but there's more that can be done. So you can see if you put for nine months of 2023, you can see that in terms of loans, assets, and deposits, this is how it would look.
So it adds about 30% there. In terms of net income, it adds about 22%, given the fact that our return on equity is higher, it's roughly 30%. So to summarize, this is immediately EPS accretive. It's 20+% of net income. There's no dilution to the shareholders. There's no change to the capital distribution policy, the dividend or the share buyback. In terms of the capital ratios, it only has an effect of 1.1% on our buffers. The reason being is that we had some extra capital sitting on the multiple level that we deployed in this transaction or will be deploying in this transaction if the AGM is supportive. So looking forward, we see 10+% growth. In Armenia, probably higher, but overall we see 10+% and a highly profitable group with 20+% return on equity.
We also see that there will be a one-off gain of roughly $200 million from the transaction, given the difference between the fair value and the transaction value. There will be a one-off as well. This is a Class 1 Transaction, conditional, among other things, on your approval, on shareholders' vote. The board unanimously recommends the vote in favor. We expect completion to happen in next month. I think we covered most of this already, but just to summarize, very strong rationale because we think that it's a next door very similar to Georgia, strong management, it's highly value accretive in terms of earnings per share, no dilution, no change to the capital distribution policy, very limited impact on capital ratios, and we think very good growth prospects going forward. On this, I will stop and open for the questions. Please, Nini.
Yeah.
For that, we have either the raise hand feature in Zoom or the Q&A chat if you want to type your questions. I'll let Robert Sage ask his first question.
Yes. Thank you very much. I've got three questions if I can. The first question is, this looks a very good deal to me and I'm very positive about it. I guess my question is, why did the owners of Ameriabank agree to terms that look to be very advantageous to you? My second question is that looking at your commentary around earnings accretion, I was wondering if you could give an indication of what earnings you're currently making on the surplus capital that you're going to be using to actually finance the acquisition. Is it the refinancing rate or is there some other maybe lower sort of interest you're getting there at the moment? And thirdly, just briefly, it looks as if this business is fully scaled up and running, highly profitable.
Will there be anything by way of restructuring charges or maybe enhanced investment spend going into that business in the future?
Well, thank you, Robert. So first on the price. So we started this negotiation in early summer of last year. And I have to say that this is the largest transaction in terms of a single equity check that has been written in Armenia, as far as I'm aware. It's not easy to have a liquidity of $300+ million in Armenia. So it's not easy to do that. So I think given our strengths and the scale, I think we were in a very good position to negotiate, so hence the price. In terms of the earnings, so we have plenty of liquidity, as you know. So you can say that something that we'll be missing out will be the refinancing rate that we used to make on this capital. This is a pretty good estimate in terms of what we expect going forward.
Regarding the restructuring charges, no, we have done a thorough due diligence and we don't expect any major charges going forward. So we like what we see. It's disclosed in detail in the documents that you either got or will be getting very soon in terms of circular and so forth. So it looks good. We liked what we saw. We liked the management. We liked the franchise. We liked the service orientation of the team there. So I think it will be uniting together for the better future, so to say. So all good what you've said. Thank you.
Thank you.
Thank you, Robert. The next question is from Steven [Paparrette].
Hi. Thank you for the presentation and congratulations on the deal. I had a couple of questions. I was wondering, have you been looking at Armenia as an opportunity for some time now? And I mean, you articulated really well that you're essentially buying what is a very profitable business today. But could you talk to the know-how that you could bring to that business from Georgia and from Bank of Georgia, particularly with regard to your strategy and how that could enhance the profitability of Ameriabank in the medium term?
Yes. So we believe that it's a top franchise. It's not just we believe. It has been confirmed by third-party marketing agencies that they are the top-of-mind bank. It is very well known that in terms of the quality of service and so forth, they really stand out. I think although it's the leader in mortgages as well as in corporate, there's more to be done in terms of providing other services and other digital products to the retail customers to increase the daily usage of Ameriabank application as well as other digital payment methods and so forth. And this is what we have done over the years in Georgia and have done it very successfully. But having said that, it's not copiable just directly. I think the approaches are copiable. So the management there will do it.
It will not be done in three months, but in a couple of years, I think, very easily. How does that translate into the numbers? It's difficult to say. I'm in no position to provide guidance there. All I can say is that in the longer-term future, the banks that are the daily usage banks are the ones that will be in a very good position to be the intermediaries of the future. I think we're very well positioned for that. Ameriabank is very well positioned and will increase its services going forward.
Thank you.
Thank you, Steven. The next question is from Henrietta Seligman.
Hi there. Thank you very much for the call. It looks like a great acquisition. I had a few different questions. The first is just about competition in the market and the industry. Could you just talk a little bit about the industry profitability? Then secondly, although the market share of Ameriabank is not as high as Bank of Georgia in some of those key areas you've identified, it is still quite high for a market with 18 banks. I'm just wondering if there are any constraints on the market share going forward from some kind of competition authority in Armenia. Then the second main line of questioning is just on the capital ratios of Ameriabank and how much growth they will allow in the future. I also note that the loan-to-deposit ratio is above 100%.
Will you have to inject any capital into the bank going forward? And then could you also just comment on some of the, I guess, Russia risks because Armenia is closer to Russia than Georgia and Georgia has made statements about being compliant with sanctions and so on? Thank you. And I note there is something related to one of the shareholders on that as well. Thank you.
In terms of the competition and the profitability of the industry, it's more fragmented. So it's slightly lower than Georgia, historically speaking. I mean, last couple of years, obviously, they've benefited from a lot of capital goods and other things that are avoiding the Russian corridor, transportation, all of Central Asian stuff coming in as well as investment and so forth. So last couple of years, profitability has been above the average historically, which is the case for Georgia as well. In terms of the growth, given the fact that they are leaders on the market, we don't know if we will be allowed to acquire smaller banks there in the future. We hope so, but we cannot count on it. But in terms of the organic growth, we don't believe there's any limitations there and none has been indicated to us.
So we would love to see more growth than the overall market there and to see the market share grow from the current, let's call it, 17%-20% to roughly 25%-35%, depending on how things go. We would like to grow profitably, obviously. In terms of capital ratios, yes. I mean, they don't have as big of a buffer as we do. Having said that, it's a highly profitable bank generating about 25% return on equity. So that can be deployed there. So that we can self-finance. We don't expect to be injecting any equity unless we really see this even more profitable growth opportunity that needed, but no plans right now, at least.
And going forward, we also see that there's some subnet capacity there that can enhance the capital structure and provide more growth opportunities above the 20%-25% that can be sustained by the organic growth itself. So that's in short on the capital side. On the Russia risk, so it's clear that Armenia has been more pro-Russian historically. Having said that, the last few years, as you are well aware of, the current government has opened the door for more Western participation. We've seen some Western companies, NVIDIA, Adobe, and some others establishing back offices there, hiring thousands of people, IT specialists. By the way, Armenia has a very well-vibrant, let's say, well-developed, vibrant IT young population that is IT educated, so good programmers and so forth. And it's a very attractive place for those offices.
We also see some investment going, Western companies going into the mining sector as well. If this transaction goes through, this will be the largest Western investment in Armenia, which is also a sign of some of the things that are developing there. I think, yes, you have seen it more pro-Russian, but it's definitely opening up the options right now. This is what we are seeing. Geographically speaking, obviously, we're closer to Russia than Armenia. Having said that, politically, it has been different. In terms of the sanctions, we have done a thorough due diligence on that side as well. We are completely comfortable that the sector and more specifically, the bank itself has followed all the Western sanctions. We're comfortable that the policies and procedures that are in place there have been pretty good. It's no different in many ways there.
We got comfortable with all of this. We believe that it's a very good transaction. Regarding the big minority shareholder, almost half, slightly less than half, he went to politics two years ago. Since then, he's been looking for liquidity opportunities for the bank. We've done also thorough due diligence on that side, including a number of advisors. I got quite comfortable with this transaction. That's why we are recommending it.
Thank you very much.
Thank you, Henrietta.
Thank you.
Archil, we have a couple of questions in the Q&A chat as well as a few raised hands. So to balance that, maybe we can read.
So I'll start with what we see in the Q&A chat. So what measures will be taken to ensure compliance with anti-money laundering and know your customer regulations? We are already comfortable with what is there. And if it needs strengthening to our standards, it will happen. So it will be the same standard, basically. How does Bank of Georgia intend to uphold corporate governance standards throughout the acquisition process and subsequent integration? I don't know. What specifically do you mean by upholding the corporate governance standards throughout the acquisition process? But all I can say is that Ameriabank has been an outstanding example of good corporate governance in Armenia. They've always prided themselves with it. They've had EBRD and ADB present on the board as well, not only shareholder, but on the board for years now. So we are comfortable that this will be a good process there.
So the next one is Victor Erch. Could you elaborate a bit? Oops. Could you elaborate a bit on negative goodwill coming out of this transaction, given you are buying well below the book nominally? There's a large positive one-off record in P&L and capital. That is exactly right. My understanding is that it's the difference between the fair value and the transaction price that will be registered as other income, one-off other income in the first quarter, assuming this transaction goes through. Fair value exercise is being done by PwC. The final number will be available shortly. But if we assume that this will be around book, and it could be slightly more, then we are looking roughly at $200 million one-off income. This will appear in the first quarter. It'll go directly to capital, obviously, with the tax-free because there's no taxation on negative goodwill. Anonymous attendee.
Can you share some insights on branding for Ameriabank post-acquisition? Will it operate as a standalone entity with its own brand? Absolutely. Ameriabank is a very strong brand locally. It's very well respected and loved by many customers. So we have no intention whatsoever of changing the brand name. In fact, one of the good things about this acquisition is the strength of their brand name. So definitely, we'll keep the name. It will remain as a separate entity with the board and management and so forth. And in terms of some of the group controls, this will be developed over the 2024, namely regarding liquidity, capital, risk, and legal. Hello. What is your view in the probability of this acquisition approved by Armenian regulator, the CBA? Thank you. This is Alexander Fando.
So Armenian regulator, obviously, is well aware of the transaction, of the structure, our intentions, and so forth. We have had, in principle, we have felt very good support. And no reason to expect any negative coming from that side. In fact, vice versa. So we hope this will be a smooth process. But it's not done until it's done. But expectations are good. Luca Franza, apologies for already asked. I joined later. Why are they selling so cheap and currently yield on the access capital used for the acquisition? Yes, Luca, that has been asked. In fact, the reason for that is that it's a large ticket for the Armenian market. So $300+ million in a single ticket is not easy to digest. Plus, it's a leading bank. So obviously, for the regulator, it was important to see that there's either a strategic interest or a knowledgeable investor.
Given the number of limitations, I think we're in a very good position. That resulted in an attractive price. Steven Gorelik, is there a difference between the tech stack between two banks? Are you planning to merge the two systems together to keep them separately? Hi, Steve. So yes, there are differences. Given some of the coverage of retail population that we showed in the side-by-side, you can see we have had very good progress there over the last few years. We believe those are some of the benefits that we can bring into this transaction. The tech stack will remain separate.
But having said that, I think the approach is in terms of how we measure and how we manage the customer satisfaction by product and by channel and how that is then translated into the priorities of the number of changes that are being rolled out, as well as some of the technical things that we have developed in our app, those will be shared. But it's not going to be merged because these are two separately regulated entities, two separate banks, and so forth. So they will be separate. But there will be a lot of sharing and advancement going forward. Another question from Steve is, what is Ameriabank's cost-income ratio? And how does it compare to BOG's? Is there significant room for improvement there? So it's about 40%, if I'm not mistaken. And do we believe there's room for improvement? I think through scaling up. Scaling up.
Other than that, this is not a transaction where we believe that there will be any cost synergies or anything like this. In fact, going forward, we intend to develop the franchise further. But as I said, the scale there will allow for better economics going forward. But this will take time.
Archil, we've got a couple of raised hands from our analysts. So maybe I'll let them and they've been waiting.
Because there are too many anonymous attendees that are asking questions.
No, we've heard. James Hamilton has had his hand up for quite a while.
Yes James.
So why don't he ask a question?
I was just wondering if you are,
yes? James, you are on mute now. Could you unmute? Yes.
Okay. Sorry. All this new stuff of Zoom only just landed, hasn't it? I would like to ask about growth, please. Could you chat a little bit about your growth ambitions in Armenia? Is it the growth of the overall marketplace? Do you anticipate taking market share? Do you have products that you use successfully in Georgia that you can be transported across to Armenia? And just general sort of ask questions for growth and also related to growth. I mean, clearly, you mentioned the market is very fragmented. And I know you've already been asked about consolidation. But my interest there is not so much if the regulator can do it, allows you to do it. But it's more in terms of the financial metrics. I mean, clearly, the price you paid for Ameriabank is very low.
I was just sort of wondering, does that sort of set a very high hurdle for any further M&A deals? Or would you be happy with just anything that brought you your target returns of in excess of 20%?
So we are happy with the leadership position that Ameriabank has on the local market. We believe that we can grow organically. There's sufficient profitability in the company that they can finance that grows as well as more capital structure enhancement that can follow. So it's a bank that can sustain 20%-25% growth per year, which would be fine. So we don't need to grow much higher than that. It's a larger bank locally there. So we'll see. In terms of the small acquisitions, we'll remain opportunistic, but we're not counting on it. And in terms of what products we'll be rolling out, it's not the products themselves that are lacking there. I think the way of delivery can be better in terms of the digital delivery. So that, I think, together with the Ameriabank management, we can enhance.
That's where we definitely think that we can bring value.
Thank you.
Thank you, James. Nini, is there?
Yeah. Thank you, James. Yeah, there isn't.
Could you just count on those raised hands? And then we'll go with the Q&A box.
Yes. So we have the next question from Can Demir from Wood & Company.
Yes. Good morning. Hi, Archil. Hi, Nini.
Good morning, James. Hi.
Congratulations on this deal.
I'm glad to hear that, especially after your comments that you wrote a few days ago.
Okay.
Being neutral until you knew the price. So now you do. So I hope that you like.
Yes. Exactly. Exactly. There you go. I think it's a good price. So congratulations on that. And maybe approaching the bank from the profitability perspective, I mean, where do you see the run rate ROE of this bank? I know the ROE went up quite a bit in the past couple of years. But I mean, in your mind, where do you see the run rate when maybe the rates in the U.S. normalize a bit and maybe the cycle worsens? How do you see it?
A lot depends on many other things. So in terms of what we would like to see, I can say that we would like to see the daily banking intermediation, leadership in that. So whatever we have rolled out as a strategy a few years ago in Georgia, applying the same logic there. I think if it's done properly and successfully, then this could be 20-plus sustainable. But for that, you need slightly more scale and better digital delivery. But given those, then I think you can sustain it. But I think scale advantage means a lot in these markets. And as I said, this is the management that has taken this bank from 1% to 20% in 15 years. So you don't need to do it overnight. But I think this is the management that can take it further without our support, obviously, wherever we can.
It's a top franchise. With a little bit of tweaks and development, I think sky's the limit.
Okay. Okay. And maybe following up on Victor's question. So there's this $200 million one-off gain. But I guess the bulk of it falls into the PLC's P&L. And I'm not sure how it works for the bank in Georgia, though. I mean.
Because it wasn't reflective.
Okay. Okay. The capital hit comes from what exactly? I mean, I know this is a very basic question. But just to understand the math behind it.
We invested some money from the whole course, some money from Bank of Georgia. Wherever we invested from Bank of Georgia, that's the capital hit.
But it also takes an asset on its balance sheet, right? I mean, it won't consolidate it, probably, locally.
You mean Bank of Georgia? No, it will not consolidate.
Okay. So it will spend roughly $90 million.
About 60% is invested from the HoldCo and 30% not in terms of cash. But in terms of the shareholding, it's 60/30. But it all washes out in terms of consolidation. It doesn't really matter.
Okay. No, no. I was just wondering where the capital hit comes from to the Georgian bank?
Because we dividended out some money to the whole court. So there was enough cash to invest from there. And then we invested the rest from the bottom here, from the bank. So that's the same.
Okay. And the stake probably has a higher risk weight, that kind of thing, probably.
There's much higher risk weighting on such investments, several times higher than the loans, obviously. And then dividend is dividend, so.
Yep. Okay. Understood. Thanks very much. Thank you, Archil.
You're welcome. Thank you.
Thank you, John. We have one raised hand from the phone number, which I'll let them speak. Hello? If you can hear us, please introduce yourself as well.
Hi. Sorry. It's Joseph Dickerson from Jefferies. You've answered most of my questions. I guess to follow up on one of the prior questions, how long have you been following this bank closely? And what prompted the timing? I think you've alluded to it. But any color there would be great. And everything else has been answered besides that.
We have been following Ameriabank for a decade and a half because they have been one of the active participants in Armenia and have been always attending our investor meetings, annual meetings. So we have had good relationships with them. But in terms of this transaction, the discussions and negotiations started early last year's summer, so more than 8 months now. What prompted it? It was opportunistic. So basically, we've scanned a lot of different countries. And we thought this was a good opportunity. And most of the investors are agreeing now, which I'm glad to hear. But I definitely put a lot of value on the leadership position and the franchise of a bank as well as the scale in the market. So it's one thing to buy number 15 player. And it's another thing to buy number 1 player.
Also, when you feel that you're comfortable with the corporate governance, when you feel comfortable about the risk structures and so forth in the bank, those are all very positive. So we liked it. And here you go. Hello?
Joseph, can you hear us?
Yes, I can hear you. That's great. Thank you.
Thank you.
Thank you. Nini, maybe we can do a few questions.
So a participant is asking, "Can $200 million one-off income be distributed as dividends? Are they distributable profits?" That's a very interesting question. It's a one-off, non-cash one-off. It's not cash profit. It's a difference between what we've paid and the value according to the IFRS approach. So it's difficult to answer this question directly. But I would probably say no. But there's plenty of other profits to be distributed if we wanted to distribute more. So there's no limitation there. So I hope that answers the question. Canara Gillian, "Are there any circumstances which your group might consider divesting Armenia or part of its business in the future?" That's a very good question. We believe that owning the number 1 bank there is a big step. Are there circumstances? There could be circumstances, but not that I can foresee right now.
Anonymous attendee: "Are there any limitations posed by the regulator on dividends that you can take from Ameriabank? And what are the plans for dividends?" There are no limitations on the dividends whatsoever. So there's a pretty open on that front. Having said that, I think the growth opportunities in Armenia are very good. So we will deploy capital where we see the most value-accretive. And as I said, I think Armenia presents itself as a very good growth opportunity. Anonymous attendee: "Do you have a long-term exit strategy, IPO, for example?" This is anonymous again. No, we don't. In fact, we think that we are in this business. This is strategic. So we're number one in Georgia, number one in Armenia now. We don't intend to IPO this separately. We are already present on one of the stock exchanges.
So we don't intend to divest it or exit it. Luca Franza, sorry, quick follow-up. So all consider what sort of EPS accretion do you expect from the acquisition, for instance, taking 2023 as reference? So in the denominator, if you took end of oh, I see. So 2023, so all in all, this will probably result in about 20+% of additional net income, probably, roughly speaking. Having said that, I think the denominator will be beefed up by the extra $200 million, the one-off gain. So that's why I think it will then be leveled out. But all in all, I think without issuing any new shares, without changing our capital distribution, this should add more than 20% of income to our bottom line. Nini, could you continue with the raised hands?
Stephen and Joseph have had raised hands after they asked the questions. So I'm not sure they have another question. But we can just try.
Let's try. Stephen.
Stephen, do you have any other questions?
No other questions now. Thank you.
Thank you. I'll ask Joseph. Joseph, do you have any additional questions for us?
No.
No.
I don't think so. Well, I can summarize that this is a transaction where we're stepping into a neighboring country which has very good fiscal discipline, which has very good monetary discipline, and a historic demonstration of good inflation management. It has inflation targeting. And the national bank there has been doing a very good job keeping inflation low. The country has demonstrated very good growth, average of 4.2% over the last 10 years, including some of the bumps on the way. And there, we're looking at acquiring a local leader, a bank that is very well known locally there and is well known to some of the investors as well, some of you. This is a bank with good corporate governance, with excellent management, management with proven track record of taking this company from zero to a leadership position over the last 15 years.
I think this is a very good opportunity that we've been presented with. Going forward, we see more growth opportunities on retail, digital, and some SME as well. In all of this, we believe this is an excellent opportunity. The board unanimously recommends the approval. The AGM will be on the 14th of March. Assuming this goes through, then we'll be closing a couple of days after that. With that, thank you very much for your interest. Oh, by the way, anonymous attendee is saying, "Who led the transaction? Was there any major investment bank involved?" Yes, J.P. Morgan was the advisor. Baker McKenzie was the law firm. Cavendish was the sponsor. Am I forgetting anybody? Auditors, EY and PwC. And Luca Franza says, "Congrats. Well done. Your stock is too cheap." Well, it's an opportunity for you then. So thank you very much.
We look forward, by the way, next week I will be in London visiting some of the shareholders if you would like to listen to in-person presentations. There will be CEO of Ameriabank and myself together, not CEO, sorry, the chairman, Andrew Mkrtchyan, and myself visiting and presenting the rationale of this deal. If you are interested to listen in, attend the in-person meetings, please be in touch with our IR. We'll do our best to accommodate the schedule. This will be Wednesday, Thursday of next week. So the dates will be 28th and 29th. With that, thank you very much.
Thank you. See you next time. Bye.