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Lloyds stock has made investors considerably richer over the last five years. Not only is the share price up 146%, the dividend has been growing at a double-digit rate.
However, that’s totally eclipsed by the red-hot performance of Lion Finance Group (LSE:BGEO). Over the same period, this bank stock is up by a mind-boggling 787%, alongside double-digit dividend growth.
The total annualised five-year return? 57.5%! That compares to Lloyds’ 22.9%.
What’s behind this roaring performance? And is it too late to consider investing today?
The company used to be called Bank of Georgia, but changed its name following the 2024 acquisition of Ameriabank (the largest commercial bank in Armenia). Its scintillating share price performance earned it a promotion to the FTSE 100 in March this year.
It’s kicked on since then, rising another 52%. But Lion Finance’s £6.1bn market cap is still only a fraction of Lloyds’ £62.5bn. So it still has plenty of room to get bigger over time as the economies of Georgia and Armenia expand.
That said, the bank carries far higher risk than Lloyds, as it operates in a region where the sudden outbreak of war isn’t unheard of. Border tensions in 2008 led to the brief Russo-Georgian War, while Ukraine is just across the Black Sea.
So, while Lloyds shareholders might worry about a sluggish UK economy, they’re not exposed to currency swings and regional geopolitical turmoil. They don’t have to keep an eye on what Russia is doing next door.
Therefore, I’m not surprised many investors would favour the Black Horse over the Black Sea!
Impressive growth
On the other hand, Lion Finance faces less overall competition in its home market, where it and the FTSE 250’s TBC Bank control around 75% of the Georgian banking system.
The lender is incredibly profitable, achieving a high return on average equity of 27.2% in the first half of 2026. Net profit jumped 17.3% to £347m.
The group’s loan book grew 23%, reaching the equivalent of roughly £12.8bn. A drop in the ocean compared to Lloyds, of course, but still growly nicely.
Over 1m customers in Georgia now open Lion’s app every day and engagement is deepening. As CEO Archil Gachechiladze points out: “When customers are this close to us, the relationship compounds: we know them better, we lend more confidently, and we earn their deposits.”
Summing up
Despite the 52% rise in six months, the stock still looks great value. The forward price-to-earnings ratio is just 8.1 compared to Lloyds’ 9.3, though the forecast yield is lower at 3.1% versus 4.7% for the UK bank.
Is Lion Finance still worth considering? I think so, assuming you’re willing to take on the added risks. The stock get can get choppy around the Georgian parliamentary election (the next one is due in 2028).
Yet JP Morgan expects the firm’s earnings per share to rise roughly 12% annually between 2025 and 2028. And the high-growth economies of Georgia and Armenia are, respectively, forecast to grow 7.5% and 5.5% in 2026.
All in all, I think the stock is a FTSE 100 buying opportunity worth thinking about. Both the income and growth prospects look very attractive.
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Ben McPoland has no position in any of the companies mentioned.
This story originally appeared on Motley Fool
