Bank of Georgia Group (BGEO) announced in a press release on July 3 that it intended to demerge into two London-listed firms. Specifically, BGEO is to demerge into a banking business, Bank of Georgia, and an investment business, BGEO Investments.

The group, which includes the second largest bank in Georgia, decided to demerge in order to improve its growth prospects, flexibility, capital structure, and investor clarity, according to its management.

Furthermore, according to the press release, the banking arm of the business would continue with its present strategy of deepening its retail banking arm, deconcentrating the risk profile of its corporate loan book, increasing corporate lending and improving cost efficiency. This part of the business accounts for over 80% of turnover at the moment

However, the investment arm of the business, which would incorporate the already-listed Georgia Healthcare Group (GHG), as well as Georgia Global Utilities, a real estate company, m2 Real Estate, and a stake in wine and beverage business Teliani Valle, would "use its superior access to capital [...] to take advantage of the significant opportunities in the fast-developing Georgian corporate sector". BGEO Investments would seek to grow businesses and then divest in a five to 10 year timeframe.

The demerger is expected to take place in the first half of 2018, the press release concluded.