Lion Finance Group (LSE:BGEO) is a stealthy FTSE 250 bank stock in more ways than one.
Firstly, it was called Bank of Georgia until February 2025, so has probably flown under the radar of some investors since then. And second, after surging 95% in 2025, it now has a £4bn market cap, which puts it close to reaching the FTSE 100.
Zooming out further, the share price is up nearly 700% in five years!
But is this FTSE 250 bank stock still decent value after such massive outperformance?
Unstable political environment
As the old name indicated, the bank operates in Georgia, a fast-growing economy located at the intersection of Europe and Asia. The name change reflected its “focus on multiple geographies” following its acquisition of Ameriabank (a leading bank in Armenia).
Now, given its blistering performance this year, I’m somewhat disappointed that I sold this stock back in 2024. This was in the build-up to the Georgian parliamentary election in October 2024, which turned toxic amid widespread accusations of vote-rigging.
Indeed, I was planning to visit the capital Tbilisi last year. But when country-wide protests erupted after the election result, I opted to go somewhere a bit less volatile.
Given this unstable political backdrop, I feared other tourists might be put off. Tourism has been a contributor to the nation’s strong economic performance. More importantly, I worried that external investment would dry up, slowing the bank’s rapid rate of growth.
Emerging markets winner
Looking at the lender’s performance since then though, it’s as if none of that ever happened. In Q3, operating income was up 15.6%, and net interest income jumped 21.1%, boosted by “robust loan book growth and supported by a stable net interest margin at the group level“.
Meanwhile, the Georgian economy grew strongly in Q3, with real gross domestic product (GDP) expanding by 6.5%. For the full year, real GDP growth is forecast at 7.5%, with broad-based positive economic activity.
The bank’s digital monthly active users in Georgia grew by 14.7%, surpassing 1.7m individuals. Armenia remains very strong too.
While downside risks persist — including global trade tensions, regional geopolitical instability, and domestic political challenges — the structural resilience of the Georgian economy and sound macroeconomic policies are expected to continue underpinning growth going forward. Lion Finance, Q3 2025.
Political risk remains
Of course, a deterioration in the political situation in Georgia remains a risk here. There are still regular demonstrations in Tbilisi.
On the other hand, a ceasefire in Ukraine would reduce the likelihood of the conflict spreading across the region, potentially giving the stock a boost. Georgia shares a roughly 550-mile border with Russia.
These geopolitical risks likely explain the stock’s ultra-cheap multiple of just six times forward earnings. This despite the lender boasting strong capital generation and high profitability (a return on equity of almost 30%).
Based on this, it’s easy to see why JP Morgan Cazenove recently reiterated its 10,700p share price target — around 16.5% above the current level. And even after the significant share price appreciation, there’s still a forward dividend yield of 3.9%.
For investors interested in a fast-growing bank trading cheaply with a decent yield, Lion Finance is worth checking out. But I’m looking at other FTSE 250 opportunities for my portfolio at the moment.
