Lion Finance Group: A leader in digital banking and fintech across Georgia and Armenia

Lion Finance has built and maintained market-dominant positions in both Georgia and Armenia, supported by a deeply customer-centric value proposition. Its digital and branch networks cater to retail and SME clients, providing high-quality, accessible services that foster customer loyalty and engagement. Georgia and Armenia are among the fastest-growing economies in South-Eastern Europe and Central Asia, offering a supportive macroeconomic backdrop. In Armenia, significant market penetration opportunities remain, particularly in underserved regions and sectors. This combination of strong brand recognition, extensive digital adoption (with Digital MAU rising 13.6% in Georgia and 47.8% in Armenia as at Q1 2026) and untapped market potential underpins sustainable franchise growth, providing a robust foundation for long-term revenue expansion as the Group continues to add customers at scale.

The Group has consistently delivered robust financial results, achieving an average return on equity (ROAE) of 26% over the last five years and delivering 27.4% ROAE in 1Q26. This reflects disciplined risk management, prudent lending practices, and a well-diversified portfolio of loans, deposits, and other financial assets. Strong capitalization and liquidity buffers allow Lion Finance to absorb economic volatility while continuing to generate consistent shareholder returns. The Group's disciplined approach to managing credit risk and operational efficiency ensures sustainable profitability, supported by 23.1% loan book growth and 17.5% deposit growth (cc) in 1Q26, making it a resilient and attractive investment in emerging markets.

Lion Finance has significant potential to diversify and enhance its revenue streams through strategic expansion of financial services. The Group can develop retail brokerage, asset management, and bancassurance offerings to complement its core banking products. By leveraging its large and loyal customer base, cross-selling opportunities are substantial, enabling deeper relationships and higher lifetime value per customer. This expansion is supported by strong digital platforms, brand recognition, and regional market leadership, underpinned by rising digital engagement and accelerating customer activity in both markets. This allows the Group to capture additional revenue and strengthen its competitive position in both Georgia and Armenia as loan and deposit momentum continues to outpace the market.

• Digital Adoption: Continued increase in monthly active users and digital transactions will drive further top-line growth.

• Ameriabank Synergies: Integration of Ameriabank is expected to enhance the Group's position in the Armenian market, contributing to both loan growth and fee income

• Sustained Economic Growth: The resilient economic environments in both Georgia and Armenia, driven by robust GDP growth, will continue to support loan demand and banking services.

• Cost Control Initiatives: Streamlining operations and renegotiating contracts to manage rising costs can help the Group maintain healthy margins.

• Market Expansion: As Lion Finance expands its digital offerings and market presence, especially in Armenia, it is poised to capture new customer segments, particularly in the digital retail and SME markets.

• Technological Leadership: Ongoing investments in innovative technologies, such as AI-driven banking models, will enable the Group to maintain a competitive edge in the fast-evolving banking landscape.

Lion Finance’s performance is exposed to macroeconomic fluctuations in its core markets. Any slowdown in economic growth in Georgia or Armenia, coupled with regional geopolitical tensions, could negatively impact loan demand, deposit growth, and overall profitability. The Group’s expansion in Armenia, while promising, also introduces exposure to external risks such as regional instability or trade disruptions. Investors should recognize that even with strong market positions, external economic and geopolitical shocks may materially affect the Group’s operating environment, loan performance, and growth trajectory.

Rapid loan portfolio growth, particularly in retail and SME segments, may increase exposure to potential defaults during an economic downturn. While Lion Finance maintains disciplined credit underwriting, prudent collateral management, and risk monitoring practices, significant macroeconomic or sector-specific shocks could challenge asset quality. This risk is heightened by expansion into emerging market segments with limited historical credit data. Maintaining portfolio quality through rigorous risk assessment and proactive monitoring will be essential to sustaining profitability and protecting shareholder value.

Liquidity remains a structural risk for the banking sector. Shifts in market sentiment, depositor behavior, or sudden political developments could create funding stress or constrain access to capital markets. While Lion Finance maintains strong liquidity buffers and prudent treasury management, unexpected shocks could require rapid adjustments to asset deployment, funding strategies, or lending growth. Investors should be aware that these liquidity pressures could impact the Group’s ability to support loan expansion, execute strategic initiatives, or sustain dividends during periods of market stress.