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Lion Finance Group (LSE:BGEO) is one of the FTSE 250’s top performers. The stock has surged since the pandemic and following a dip that took place after Russia invaded Ukraine.
So, what is Lion Finance Group? Well, the company was known as Bank of Georgia until February. It recently decided to change its name to reflect its geographical presence following its acquisition of Armenia’s largest bank, Ameriabank, in 2024.
More broadly, its growth story has been incredibly impressive. The stock has benefitted from the growth of Georgia’s economy — the fastest in Europe following the pandemic. And despite concerns about the government’s priorities, it has delivered a degree of stability amid the war in Ukraine.
Still incredibly cheap
One of the most amazing things about this stock is the fact that it still looks cheap despite surging 490% over five years. But that’s because earnings have also improved by around 500% versus 2019 levels. Currently, the stock is trading at 4 times forward earnings for 2025 and 3.6 times projected earnings for 2026. This represents a phenomenal discount versus the FTSE 250 average and versus UK-listed banking stocks.
What’s more, the dividend yield remains elevated. The current yield is 5.4% and this is expected to rise to 6.3% in 2026.
And here’s an important lesson for investors based on my own experiences. I bought what was then Bank of Georgia stock for around 900p a share in 2022. However, I sold in 2024 amid concerns about the election that was held in the autumn — it was always due to be a heated one. Nonetheless, that share sale could have been a mistake as the price has continued to rise. More interestingly however, my initial investment would have been yielding around 25%-30% in dividends annually! That’s because the dividend payments have surged relative to my entry price.
Political concerns remain
Since October 2024, Georgia has been engulfed in widespread political protests following disputed parliamentary elections and the ruling Georgian Dream party’s decision to suspend EU accession talks until 2028. Demonstrators, demanding new elections and the release of unlawfully detained individuals, have faced police repression, yet protests persist, now entering their fourth month. The political turmoil has led to international isolation, strained relations with the EU and US, and the introduction of laws targeting dissent and civil society.
This instability has significantly impacted Georgia’s financial markets. Fitch Ratings downgraded Georgia’s outlook from Stable to Negative, reflecting growing investor anxiety. Given the ongoing unrest, political uncertainty, and potential for further sanctions, the investment climate remains highly volatile. What’s more, banks typically reflect the health of the economy. This is why I am not investing in Georgia at this time. The combination of political instability and market unpredictability makes it a risky proposition. Nonetheless, I believe it’s a stock worth watching closely.
