Lion Finance Group (LSE:BGEO) shares are up 405% over the past three years. This FTSE 250 banking stock, formerly known as the Bank of Georgia, may even be on course to enter the FTSE 100. Time will tell, but the trajectory is very positive.
So why did I sell?
I sold shares in Lion Finance in 2024 primarily due to concerns about the political climate surrounding the election in Georgia. In the lead-up to and following the October 2024 parliamentary elections, Georgia experienced widespread political protests, international isolation, and a suspension of EU accession talks.
This period was marked by significant political instability, with ongoing demonstrations, police repression, and the introduction of laws targeting dissent and civil society. These events created a highly volatile investment environment and led to downgrades in Georgia’s financial outlook, as seen with Fitch Ratings moving the country’s outlook from ‘stable’ to ‘negative’.
This instability directly impacted Georgia’s financial markets and increased the perceived risk for investors in Georgian companies. Even though Lion Finance reported strong financial results and growth in both Georgia and Armenia, the uncertainty about the political landscape and its potential impact on the banking sector contributed to my decision to reduce exposure.
The company itself even acknowledged in its earnings call that it maintained higher liquidity than usual due to the elections and unrest.
As such, and with capital preservation in mind, I elected to lock in my gains and sell up. However, the stock has continued to go from strength to strength. My original £5,000 investment would now be worth £25,000.
Is there still an opportunity?
I continue to be a bit wary about investing in Georgian companies. However, guessing what’s going to happen next in the country is a fool’s game. It’s a risk investors are either happy to live with, or they’re not.
However, from a metrics-based perspective, the stock is clearly cheaper than its peers. Lion Finance’s forward price-to-earnings ratio sits at 5.3 times for 2025, improving to 4.86 times in 2026 and 4.04 times by 2027, based on earnings projections.
The dividend yield is projected at 4.23% for 2025, rising to 4.88% in 2026 and 5.75% in 2027. In turn, this indicates a steady commitment to shareholder returns. Dividend coverage, meanwhile, remains strong, with the payout ratio expected to stay below 25% through these years, ensuring distributions are well-covered by earnings and supporting sustainability of future dividends.
This combination of low multiples and healthy yield coverage underpins Lion Finance’s investment appeal.
Personally, I’m going to hold off. While some investors may find the stock worth considering, I think I’m going to sit out the risk. Eager investors may also want to check out its peer, TBC Group.
And those with an interest in banking stocks from less developed economies may wish to follow the fortunes of Guaranty Trust Holding Company. The Nigerian bank listed on the London exchange on 9 July. An initial glance suggested it was trading at 2.3 times earnings.
