1Q 2024 Results Report

TBC Bank Group PLC

10 May 2024

 

TBC BANK GROUP PLC ("TBC Bank")

1Q 2024 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

Forward-looking statements

This document contains forward-looking statements; such forward-looking statements contain known and unknown risks, uncertainties and other important factors, which may cause the actual results, performance or achievements of TBC Bank Group PLC ("the Bank" or "the Group") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on numerous assumptions regarding the Bank's present and future business strategies and the environment in which the Bank will operate in the future. Important factors that, in the view of the Bank, could cause actual results to differ materially from those discussed in the forward-looking statements include, among others: the achievement of anticipated levels of profitability; growth, cost and recent acquisitions; the impact of competitive pricing; the ability to obtain the necessary regulatory approvals and licenses; the impact of developments in the Georgian and Uzbek economies; the impact of COVID-19; the political and legal environment; financial risk management; and the impact of general business and global economic conditions.

None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises, nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects are based are accurate or exhaustive or, in the case of the assumptions, entirely covered in the document. These forward-looking statements speak only as of the date they are made, and, subject to compliance with applicable law and regulations, the Bank expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in the document to reflect actual results, changes in assumptions or changes in factors affecting those statements.

Certain financial information contained in this presentation, which is prepared on the basis of the Group's accounting policies applied consistently from year to year, has been extracted from the Group's unaudited management accounts and financial statements. The areas in which the management accounts might differ from the International Financial Reporting Standards and/or generally accepted U.S. accounting principles could be significant; you should consult your own professional advisors and/or conduct your own due diligence for a complete and detailed understanding of such differences and any implications they might have on the relevant financial information contained in this presentation. Some numerical figures included in this report have been subjected to rounding adjustments. Accordingly, the numerical figures shown as totals in certain tables might not be an arithmetic aggregation of the figures that preceded them.

1Q 2024 consolidated financial results conference call details

TBC Bank Group PLC ("TBC PLC") will publish its preliminary unaudited consolidated financial results for the first quarter 2024 on Friday, 10 May 2024 at 7.00 AM BST. On the same day, the management team will host a conference call at 2.00 PM BST.

To participate in the conference call live video webinar, please register using the following link:

https://www.netroadshow.com/events/login?show=4bb3e869&confId=64445

You will receive access details via email.

Contacts

 

Andrew Keeley Director of Investor Relations E-mail:  [e-mail] Tel:  [phone] Web: www.tbcbankgroup.com

Anna Romelashvili                                              Head of Investor Relations E-mail:  [e-mail]  Tel:  +(995) 577 205 290 Web: www.tbcbankgroup.com

Investor Relations Department E-mail:  [e-mail]  Tel:  +(995 32) 227 27 27 Web: www.tbcbankgroup.com

Table of contents

1Q 2024 unaudited consolidated financial results announcement

Interim management report

Financial highlights

Operational highlights

Letter from the Chief Executive Officer

Economic overview

Unaudited consolidated financial results overview for 1Q 2024

Additional information

1)          Financial disclosures by business lines

2)          Glossary

3)          Ratio definitions and exchange rates

1Q 2024 unaudited consolidated financial results

1Q 2024 profit of GEL 296 million, up by 16% YoY, with ROE at 25.1%.

European Union Market Abuse Regulation EU 596/2014 requires TBC Bank Group PLC to disclose that this announcement contains Inside Information, as defined in that Regulation.

Financial highlights

Income statement

In thousands of GEL	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Net interest income	442,844	441,735	366,791	20.7%	0.3%
Net fee and commission income	104,303	110,099	92,438	12.8%	-5.3%
Other non-interest income	70,834	87,443	73,010	-3.0%	-19.0%
Total operating income	617,981	639,277	532,239	16.1%	-3.3%
Total credit loss allowance	(45,133)	(47,480)	(53,168)	-15.1%	-4.9%
Operating expenses	(229,670)	(254,499)	(182,779)	25.7%	-9.8%
Profit before tax	343,178	337,298	296,292	15.8%	1.7%
Income tax expense	(46,707)	(45,856)	(41,331)	13.0%	1.9%
Profit for the period	296,471	291,442	254,961	16.3%	1.7%

Balance sheet

In thousands of GEL	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Total assets	33,261,535	32,964,827	27,138,983	22.6%	0.9%
Gross loans	22,545,189	22,073,679	18,321,341	23.1%	2.1%
Customer deposits	20,838,768	20,375,498	17,297,630	20.5%	2.3%
Total equity	4,853,916	4,820,182	4,238,958	14.5%	0.7%
Number of shares	55,393,664	55,393,664	54,991,419	0.7%	0.0%

Key ratios

	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
ROE	25.1%	25.2%	25.2%	-0.1 pp	-0.1 pp
ROA	3.6%	3.7%	3.6%	0.0 pp	-0.1 pp
NIM	6.5%	6.7%	6.4%	0.1 pp	-0.2 pp
Cost to income	37.2%	39.8%	34.3%	2.9 pp	-2.6 pp
Cost of risk	0.8%	0.8%	1.1%	-0.3 pp	0.0 pp
NPL to gross loans	2.2%	2.0%	2.2%	0.0 pp	0.2 pp
NPL provision coverage ratio	74.4%	79.8%	92.9%	-18.5 pp	-5.4 pp
Total NPL coverage ratio	140.3%	146.3%	154.8%	-14.5 pp	-6.0 pp
Leverage (x)	6.9x	6.8x	6.4x	0.5x	0.1x
EPS (GEL)	5.39	5.31	4.57	17.9%	1.5%
Diluted EPS (GEL)	5.36	5.26	4.50	19.1%	1.9%
BVPS (GEL)	86.11	86.32	75.91	13.4%	-0.2%
Georgia
CET 1 CAR	16.6%	17.4%	17.7%	-1.1 pp	-0.8 pp
Tier 1 CAR	18.8%	19.6%	20.1%	-1.3 pp	-0.8 pp
Total CAR	21.5%	22.1%	22.2%	-0.7 pp	-0.6 pp
Uzbekistan
CET 1 CAR	12.7%	15.4%	23.1%	-10.4 pp	-2.7 pp
Tier 1 CAR	12.7%	15.4%	23.1%	-10.4 pp	-2.7 pp
Total CAR	16.2%	16.3%	23.6%	-7.4 pp	-0.1 pp

Operational highlights

Customer base

In thousands	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Total number of unique registered users	17,884	16,490	13,272	35%	8%
Georgia	3,317	3,275	3,100	7%	1%
Uzbekistan	14,567	13,215	10,172	43%	10%
Total monthly active customers	6,331	5,890	5,123	24%	7%
Georgia	1,615	1,604	1,519	6%	1%
Uzbekistan	4,716	4,286	3,604	31%	10%
Total digital monthly active users (digital MAU)	5,646	5,207	4,433	27%	8%
Georgia	930	921	829	12%	1%
Uzbekistan	4,716	4,286	3,604	31%	10%
Total digital daily active users (digital DAU)	1,760	1,718	1,358	30%	2%
Georgia	413	421	368	12%	-2%
Uzbekistan	1,347	1,297	990	36%	4%
Digital DAU/MAU	31%	33%	31%	0 pp	-2 pp
Georgia	44%	46%	44%	0 pp	-2 pp
Uzbekistan	29%	30%	27%	2 pp	-1 pp

Uzbekistan - key highlights

	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Loans and advances to customers (GEL, thousands)	928,553	796,930	407,993	127.6%	16.5%
Customer accounts (GEL, thousands)	657,190	581,483	374,429	75.5%	13.0%
Payme's payments volume (GEL, billion)	2.5	2.6	2.2	13.6%	-3.8%

	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Profit for the period (GEL, thousands)	18,436	20,433	12,708	45.1%	-9.8%
ROE	23.7%	29.7%	28.1%	-4.4 pp	-6.0 pp

TNET - digital lifestyle platform in Georgia

In millions	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Gross merchandise value (GMV, GEL)	36.2	36.4	30.4	19.1%	-0.5%
Number of transactions	4.1	4.1	3.4	20.6%	0.0%

Letter from the Chief Executive Officer[1]

I am pleased to report that we started 2024 strongly, with net income increasing 16% year-on-year to GEL 296 million, and our ROE remaining above 25%. Operating income was also up by 16% to GEL 618 million.

Before discussing our 1Q 2024 results in more detail, I would like to highlight that in April we successfully issued USD 300 million AT1 bonds, with strong investor demand from the EU, UK, and US and which prices c. 50 bps below our outstanding AT1 bonds that are callable in October this year. This AT1 offering will reinforce our capital structure and help to provide an excellent foundation for pursuing growth opportunities over the next few years.

Turning back to our financials, our high profitability was driven by strong net interest income, which grew by 21% year-on-year, underpinned by dynamic loan book growth and resilient margins, while our net fee and commission income rose 13%. Our solid revenue streams continue to be supported by sound asset quality, which translated into 0.8% cost of risk. At the same time, our operating expenses increased by 26% due to the expansion of our business, with our Uzbek operations accounting for almost 40% of the growth. Consequently, our cost to income ratio stood at 37.2% in 1Q 2024.

Credit growth remained robust in 1Q 2024 with the Group's gross loan book increasing by 21% year-on-year on a constant currency basis. In parallel, the Group's total deposits grew by 18% year-on-year on a constant currency basis, highlighting strong funding support.

Our active customer base also continues to increase, in particular in Uzbekistan. Our digital MAU reached 5.6 million at the Group level by end of March 2024, up 27% year-on-year, while almost one third of our users are active across our digital platforms on a daily basis.

I would like to highlight the performance of our digital financial services businesses in Uzbekistan, which continue to go from strength to strength as they become a significant contributor to the overall Group's balance sheet and profitability. In 1Q 2024 alone, Uzbekistan generated GEL 74 million in total operating income and GEL 18 million in net profit, constituting 12% and 6% of the Group totals, respectively. Over the same period, the ROE of our Uzbek operations amounted to a very healthy 23.7%.

In addition, TBC UZ is delivering remarkable growth in its balance sheet. As of the end of 1Q 2024, TBC UZ's retail loans amounted to GEL 929 million, up by 128% year-on-year and accounting for 42% of the Group's consumer loans with a micro loan market share[2] of 15.3%. At the same time, TBC UZ retail deposits reached GEL 657 million, up by 76% year-on-year, representing 8% of the Group's retail deposits and capturing 3.4% retail deposit market share². Our focus in Uzbekistan this year is on new product development, in particular rolling out credit cards, daily and MSME banking as well as scaling up our business as we continue to build greater synergies and integration within our digital banking and payments businesses.

I believe that the Group is well positioned to build further on this strong start to the year and deliver excellent results for our shareholders in 2024, as well as ensuring we are on track to meet our strategic targets for next year. We continue to feel the benefits of strong economic growth within our two major operating countries, with our outlook for Georgian economic growth this year raised to 6.4%, while we expect very solid and consistent 5.6% growth in Uzbekistan.

Finally, I am pleased to report that the Board has approved a buyback programme of up to GEL75 million, of which GEL 50 million will be for share cancellation and GEL 25 million for the Employee Benefit Trust.

Vakhtang Butskhrikidze

CEO, TBC Bank Group PLC

Economic overview

Georgia

Economic growth remains robust

Economic activity eased slightly but still remained very strong in 1Q 2024, with real GDP increasing by 7.8%, following 7.5% growth in 2023. External sector activity in 1Q 2024 continued to be negatively affected by lower international commodity prices, with domestic exports particularly hard hit despite a mild recovery in ferro-alloy exports. Exports and imports denominated in US dollars decreased by 9.3% and 5.3% YoY in 1Q 2024, respectively.

On a more positive note, tourism revenues excluding Russia, Ukraine and Belarus increased by 30.8% YoY in 1Q 2024, while overall tourism including migration impact grew by 1.5%, given that migrants are gradually being counted as residents by the NBG and hence excluded from the tourism sector. Meanwhile, remittances fell 20.7%[3] YoY in 1Q 2024, driven by a high base effect in money transfers from Russia. Total FDI in 2023 decreased by 24.0% YoY, due to very large liability repayments, however, reinvested earnings and equity investments reached an all time high of USD 2.5 billion. Combined with a high contribution from investment in GDP growth, this points to continued positive momentum in both actual and potential economic output.

Fiscal consolidation continues in 1Q

The government remains focused on fiscal consolidation by reducing the budget deficit relative to GDP. A sizable surplus was recorded in 1Q 2024, with the budget balance[4] standing at 1.3% of GDP, while the government targets 2.5% deficit for the full year, compared to 2.8% in 2023 and 3.0% in 2022.

Credit growth remains strong

Following 17.0% growth in 2023, bank credit growth accelerated slightly to 17.2% YoY as of March 2024 at constant exchange rates[5]. At the same time, as low and stable inflation persisted, YoY growth in real credit also remained high at 16.6%. Credit growth remains stronger for legal entities, increasing by 20.6% YoY, while lending to individuals was up by 14.4% in 1Q 2024. The dedollarization of bank lending continues, wth the share of FX loans slightly decreasing to 45.0% at the end of 1Q 2024 (down from 45.2% YTD).

Low inflation enables monetary policy easing

Despite substantial easing and volatile market sentiment, the GEL, with support from still high net currency inflows, remained almost unchanged against the USD during 1Q 2024, standing at 2.69 at the end of March. Notably, leveraging strong inflows, the NBG switched back to reserve accumulation, purchasing USD 88 million in the first three months of 2024.

CPI inflation stabilised well below the NBG's target of 3%, standing at 0.5% YoY in March. However, domestic and service inflation measures showed gradual acceleration. Nevertheless, low overall inflation led the NBG to deliver two rate cuts in the first quarter, reducing the monetary policy rate (MPR) to 8.25%.

Uzbekistan

Continued strong economic performance

Uzbekistan also continues to show strong economic activity with 6.2%[6] real GDP growth in 1Q 2024. However, the annual growth rates of external trade decreased compared to the 4Q 2023 and amounted to 10.5%[7] for exports of goods and 1.8% for imports, with the latter being affected by high base effect related to a one-off. Retail credit growth remains robust at 40%⁶ YoY at end March, with mortgage credit expanding by 24% and non-mortgage credit by 53%.

Annual inflation decreased slightly from 8.8% in December to 8.0%⁶ in March, with a more pronounced deceleration evident when compared to 11.7% in March 2023. The CBU kept its monetary policy rate unchanged at 14.0% in the first quarter. The UZS stood at 12,620⁶ relative to the USD at the end of March 2024, depreciating by 2.3% in 1Q 2024, while the REER (real effective exchange rate) remained broadly stable.

Upgrading Georgian economic growth forecast

Given the strong start to 2024, we recently upgraded our forecast for real GDP growth in Georgia to 6.4% (from 5.6%), while our projection for Uzbekistan stands at 5.6%.

More information on the Georgian economy and financial sector can be found at www.tbccapital.ge.

Unaudited consolidated financial results overview for 1Q 2024

This statement provides a summary of the business and financial trends for 1Q 2024 for TBC Bank Group plc and its subsidiaries. The financial information and trends are unaudited.

Please note that there might be slight differences in previous periods' figures due to rounding.

Consolidated income statement and other comprehensive income

In thousands of GEL	1Q'24	4Q'23	1Q'23
Interest income	840,354	810,428	672,150
Interest expense	(397,510)	(368,693)	(305,359)
Net interest income	442,844	441,735	366,791
Fee and commission income	179,488	192,341	151,801
Fee and commission expense	(75,185)	(82,242)	(59,363)
Net fee and commission income	104,303	110,099	92,438
Insurance contract revenue	36,448	33,665	29,524
Reinsurance service result	1,172	1,161	(2,870)
Insurance service claims and expenses incurred	(29,817)	(25,736)	(20,436)
Net insurance income	7,803	9,090	6,218
Net gains from currency derivatives, foreign currency operations and translation	61,469	68,228	60,601
Net gains from disposal of investment securities measured at fair value through other comprehensive income	233	8	2,012
Other operating income	1,369	10,372	3,905
Share of (loss)/profit of associates	(41)	(256)	274
Other operating non-interest income	63,030	78,352	66,792
Credit loss allowance for loans to customers	(43,900)	(40,640)	(50,040)
Credit loss (allowance)/recovery for finance lease receivable	(2,046)	1,129	(1,073)
Credit loss (allowance)/recovery for performance guarantees and credit related commitments	(394)	(612)	337
Credit loss recovery/(allowance) for other financial assets	1,590	(4,890)	(1,954)
Credit loss allowance for financial assets measured at fair value through other comprehensive income	(335)	(407)	(296)
Net impairment of non-financial assets	(46)	(2,059)	(142)
Operating income after expected credit and non-financial asset impairment losses	572,849	591,797	479,071
Staff costs	(126,563)	(139,766)	(103,426)
Depreciation and amortisation	(34,108)	(28,741)	(28,361)
Allowance of provision for liabilities and charges	78	-	(71)
Administrative and other operating expenses	(69,078)	(85,993)	(50,922)
Operating expenses	(229,671)	(254,500)	(182,780)
Profit before tax	343,178	337,297	296,291
Income tax expense	(46,707)	(45,856)	(41,331)
Profit for the period	296,471	291,441	254,960
Other comprehensive income, net of tax:
Items that may be reclassified subsequently to profit or loss:
Movement in fair value reserve, net of tax	21,351	1,491	8,036
Exchange differences on translation to presentation currency	(13,733)	(2,065)	(5,166)
Net other movements	58	(33)	-
Other comprehensive expense for the period, net of tax	7,676	(607)	2,870
Total comprehensive income for the period	304,147	290,834	257,830
Profit attributable to:
- Shareholders of TBCG	292,805	287,699	248,668
- Non-controlling interest	3,666	3,742	6,292
Profit for the period	296,471	291,441	254,960
Total comprehensive income is attributable to:
- Shareholders of TBCG	300,481	287,092	251,538
- Non-controlling interest	3,666	3,742	6,292
Total comprehensive income for the period	304,147	290,834	257,830

Consolidated balance sheet

In thousands of GEL	Mar'24	Dec'23	Mar'23
ASSETS
Cash and cash equivalents	3,147,389	3,764,087	2,188,553
Due from other banks	24,296	47,941	38,738
Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan	1,557,221	1,577,074	1,817,145
Loans and advances to customers	22,183,529	21,722,107	17,953,053
Investment securities measured at fair value through other comprehensive income	3,875,799	3,475,461	3,047,598
Bonds carried at amortised cost	73,098	73,963	30,967
Finance lease receivables	411,386	400,411	316,247
Investment properties	15,921	15,235	21,080
Investments in associates	3,493	4,204	4,095
Current income tax prepayment	5,446	435	856
Deferred income tax asset	4,371	7,400	13,867
Other financial assets	311,427	280,268	258,135
Other assets	454,171	431,477	426,341
Premises and equipment	517,699	513,340	448,041
Right of use assets	126,880	120,077	112,977
Intangible assets	489,445	471,383	401,326
Goodwill	59,964	59,964	59,964
TOTAL ASSETS	33,261,535	32,964,827	27,138,983
LIABILITIES
Due to credit institutions	3,702,517	4,395,182	2,596,880
Customer accounts	20,838,768	20,375,498	17,297,630
Other financial liabilities	636,939	358,522	345,017
Current income tax liability	11,946	67,945	6,659
Deferred income tax liability	53,315	50,957	114,300
Debt Securities in issue	1,501,651	1,426,174	1,324,815
Provision for liabilities and charges	21,118	21,060	19,228
Other liabilities	116,323	123,218	67,024
Lease liabilities	99,501	91,879	79,989
Subordinated debt	1,050,191	868,730	583,678
Redemption liability	375,350	365,480	464,805
TOTAL LIABILITIES	28,407,619	28,144,645	22,900,025
EQUITY
Share capital	1,690	1,690	1,676
Shares held by trust	(45,675)	(75,609)	(37,239)
Share premium	295,605	295,605	261,719
Retained earnings	4,470,376	4,433,496	3,993,387
Merger reserve	402,862	402,862	402,862
Share based payment reserve	(14,689)	23,677	(2,815)
Fair value reserve for investment securities measured at fair value through other comprehensive income	33,696	12,345	13,503
Cumulative currency translation reserve	(54,737)	(44,824)	(41,024)
Other reserve	(375,320)	(365,513)	(464,805)
Equity attributable to owners of the parent	4,713,808	4,683,729	4,127,264
Non-controlling interest	140,108	136,453	111,694
TOTAL EQUITY	4,853,916	4,820,182	4,238,958
TOTAL LIABILITIES AND EQUITY	33,261,535	32,964,827	27,138,983

Ratios

Ratios (based on monthly averages, where applicable)	1Q'24	4Q'23	1Q'23
Profitability ratios:
ROE1	25.1%	25.2%	25.2%
ROA2	3.6%	3.7%	3.6%
Cost to income3	37.2%	39.8%	34.3%
NIM4	6.5%	6.7%	6.4%
Loan yields5	12.7%	12.7%	12.4%
Deposit rates6	5.4%	5.1%	4.9%
Cost of funding7	6.0%	5.7%	5.4%
Asset quality & portfolio concentration:
Cost of risk9	0.8%	0.8%	1.1%
PAR 90 to gross loans9	1.2%	1.1%	1.3%
NPLs to gross loans10	2.2%	2.0%	2.2%
NPL provision coverage11	74.4%	79.8%	92.9%
Total NPL coverage12	140.3%	146.3%	154.8%
Credit loss level to gross loans13	1.6%	1.6%	2.0%
Related party loans to gross loans14	0.1%	0.1%	0.1%
Top 10 borrowers to total portfolio15	5.9%	6.2%	6.0%
Top 20 borrowers to total portfolio16	8.8%	9.1%	9.0%
Capital & liquidity positions:
Net loans to deposits plus IFI funding17	96.7%	96.1%	92.9%
Leverage (x)18	6.9x	6.8x	6.4x
Georgia
Net stable funding ratio19	114.8%	119.9%	131.3%
Liquidity coverage ratio20	114.6%	115.3%	135.7%
CET 1 CAR21	16.6%	17.4%	17.7%
Tier 1 CAR22	18.8%	19.6%	20.1%
Total 1 CAR23	21.5%	22.1%	22.2%
Uzbekistan
CET 1 CAR24	12.7%	15.4%	23.1%
Tier 1 CAR25	12.7%	15.4%	23.1%
Total 1 CAR26	16.2%	16.3%	23.6%

Funding and liquidity in Georgia

	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Minimum net stable funding ratio, as defined by the NBG	100.0%	100.0%	100.0%	0.0 pp	0.0 pp
Net stable funding ratio as defined by the NBG	114.8%	119.9%	131.3%	-16.5 pp	-5.1 pp
Minimum total liquidity coverage ratio, as defined by the NBG	100.0%	100.0%	100.0%	0.0 pp	0.0 pp
Minimum LCR in GEL, as defined by the NBG	75%	75.0%	75.0%	0.0 pp	0.0 pp
Minimum LCR in FC, as defined by the NBG	100.0%	100.0%	100.0%	0.0 pp	0.0 pp
Total liquidity coverage ratio, as defined by the NBG	114.6%	115.3%	135.7%	-21.1 pp	-0.7 pp
LCR in GEL, as defined by the NBG	114.8%	109.8%	164.2%	-49.4 pp	5.0 pp
LCR in FC, as defined by the NBG	114.4%	120.1%	116.5%	-2.1 pp	-5.7 pp

Regulatory capital

Georgia

The capital ratios as of 31 March 2024 already account for the pending dividend payment effect.

In thousands of GEL	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
CET 1 capital	4,096,919	4,235,033	3,667,479	11.7%	-3.3%
Tier 1 capital	4,635,979	4,772,913	4,179,559	10.9%	-2.9%
Total capital	5,290,327	5,374,301	4,601,884	15.0%	-1.6%
Total risk-weighted assets	24,607,358	24,336,690	20,767,052	18.5%	1.1%
Minimum CET 1 ratio	14.5%	14.3%	14.3%	0.2 pp	0.2 pp
CET 1 capital adequacy ratio	16.6%	17.4%	17.7%	-1.1 pp	-0.8 pp
Minimum Tier 1 ratio	16.8%	16.6%	16.7%	0.1 pp	0.2 pp
Tier 1 capital adequacy ratio	18.8%	19.6%	20.1%	-1.3 pp	-0.8 pp
Minimum total capital adequacy ratio	19.9%	19.8%	19.7%	0.2 pp	0.1 pp
Total capital adequacy ratio	21.5%	22.1%	22.2%	-0.7 pp	-0.6 pp

Uzbekistan

As of 31 March 2024, our capital ratios for Uzbek bank decreased due to rapid growth in the loan book.

	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Minimum CET 1 ratio	8.0%	8.0%	8.0%	0.0 pp	0.0 pp
CET 1 capital adequacy ratio	12.7%	15.4%	23.1%	-10.4 pp	-2.7 pp
Minimum Tier 1 ratio	10.0%	10.0%	10.0%	0.0 pp	0.0 pp
Tier 1 capital adequacy ratio	12.7%	15.4%	23.1%	-10.4 pp	-2.7 pp
Minimum total capital adequacy ratio	13.0%	13.0%	13.0%	0.0 pp	0.0 pp
Total capital adequacy ratio	16.2%	16.3%	23.6%	-7.4 pp	-0.1 pp

Loan portfolio

As of 31 March 2024, the gross loan portfolio reached GEL 22,545.2 million, up by 23.1% YoY and 2.1% QoQ, or up by 20.6% YoY and 2.6% QoQ on a constant currency basis.

In 1Q 2024, our Georgian financial services loan portfolio increased by 20.7% on a YoY and 1.6% on a QoQ basis and reached GEL 21,594.0 million, with 17.9% YoY and 2.0% QoQ growth on a constant currency basis. Over the same period, our Uzbek portfolio increased more than doubled YoY and by 16.5% QoQ. Quarterly growth translated into growth of 18.8% on a constant currency basis.

In thousands of GEL Gross loans and advances to customers	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Georgian financial services (Georgia FS)*	21,594,026	21,257,692	17,896,929	20.7%	1.6%
Retail Georgia	7,682,858	7,513,229	6,739,925	14.0%	2.3%
CIB Georgia	8,419,450	8,283,723	6,512,092	29.3%	1.6%
MSME Georgia	5,506,736	5,480,822	4,663,394	18.1%	0.5%
Uzbekistan	928,553	796,930	407,993	127.6%	16.5%
Total gross loans and advances to customers**	22,545,189	22,073,679	18,321,341	23.1%	2.1%

* Georgian FS includes sub-segment eliminations
** Total gross loans and advances to customers include Azerbaijan loan portfolio

	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Loan yields	12.7%	12.7%	12.4%	0.3 pp	0.0 pp
GEL	14.1%	14.6%	14.9%	-0.8 pp	-0.5 pp
FC	8.6%	8.7%	8.2%	0.4 pp	-0.1 pp
UZS	43.2%	41.7%	43.6%	-0.4 pp	1.5 pp
Georgia FS	11.4%	11.7%	11.7%	-0.3 pp	-0.3 pp
GEL	14.1%	14.6%	14.9%	-0.8 pp	-0.5 pp
FC	8.6%	8.7%	8.2%	0.4 pp	-0.1 pp
Uzbekistan	43.2%	41.7%	43.6%	-0.4 pp	1.5 pp
UZS	43.2%	41.7%	43.6%	-0.4 pp	1.5 pp
Total loan yields*	12.7%	12.7%	12.4%	0.3 pp	0.0 pp

* Total loans yields include Azerbaijan

Loan portfolio quality

PAR 90	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Georgia FS*	1.2%	1.1%	1.2%	0.0 pp	0.1 pp
Retail Georgia	0.8%	0.8%	1.1%	-0.3 pp	0.0 pp
CIB Georgia	0.7%	0.7%	0.8%	-0.1 pp	0.0 pp
MSME Georgia	2.5%	2.2%	2.2%	0.3 pp	0.3 pp
Uzbekistan	2.1%	1.9%	2.0%	0.1 pp	0.2 pp
Total PAR 90**	1.2%	1.1%	1.3%	-0.1 pp	0.1 pp

* Georgian FS includes sub-segment eliminations
** Total PAR 90 includes Azerbaijan

In thousands of GEL Non-performing Loans (NPL)	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Georgia FS*	466,110	425,061	386,474	20.6%	9.7%
Retail Georgia	125,625	127,102	138,234	-9.1%	-1.2%
CIB Georgia	137,849	114,130	88,830	55.2%	20.8%
MSME Georgia	202,636	183,829	159,410	27.1%	10.2%
Uzbekistan	19,222	15,006	8,176	135.1%	28.1%
Total non-performing loans**	486,058	440,750	396,433	22.6%	10.3%

* Georgian FS includes sub-segment eliminations
** Total non-performing loans include Azerbaijan NPLs

NPL to gross loans	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Georgia FS*	2.2%	2.0%	2.2%	0.0 pp	0.2 pp
Retail Georgia	1.6%	1.7%	2.1%	-0.5 pp	-0.1 pp
CIB Georgia	1.6%	1.4%	1.4%	0.2 pp	0.2 pp
MSME Georgia	3.7%	3.4%	3.4%	0.3 pp	0.3 pp
Uzbekistan	2.1%	1.9%	2.0%	0.1 pp	0.2 pp
Total NPL to gross loans**	2.2%	2.0%	2.2%	0.0 pp	0.2 pp

* Georgian FS includes sub-segment eliminations
** Total NPL to gross loans include Azerbaijan NPLs

	Mar'24		Dec'23		Mar'23
NPL Coverage	Provision Coverage	Total Coverage***	Provision Coverage	Total Coverage***	Provision Coverage	Total Coverage***
Georgia FS*	68.1%	136.6%	73.4%	142.2%	89.7%	152.1%
Retail Georgia	121.3%	183.6%	120.4%	179.5%	143.3%	188.1%
CIB Georgia	44.0%	105.2%	46.9%	110.6%	51.5%	114.6%
MSME Georgia	51.5%	128.8%	57.5%	136.0%	64.6%	140.9%
Uzbekistan	220.8%	220.8%	222.3%	222.3%	189.7%	189.7%
Total NPL coverage**	74.4%	140.3%	79.8%	146.3%	92.9%	154.8%

* Georgian FS includes sub-segment eliminations
** Total NPL coverage include Azerbaijan loans coverage
** Total NPL coverage ratio includes provision and collateral coverage

Cost of risk (CoR)	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Georgia FS*	0.7%	0.6%	1.0%	-0.3 pp	0.1 pp
Retail Georgia	1.1%	0.1%	1.4%	-0.3 pp	1.0 pp
CIB Georgia	0.4%	0.3%	-0.1%	0.5 pp	0.1 pp
MSME Georgia	0.7%	1.8%	2.1%	-1.4 pp	-1.1 pp
Uzbekistan	5.5%	4.9%	5.6%	-0.1 pp	0.6 pp
Total cost of risk**	0.8%	0.8%	1.1%	-0.3 pp	0.0 pp

* Georgian FS includes sub-segment eliminations
** Total cost of risk includes Azerbaijan CoR

Deposit portfolio

As of 31 March 2024, deposit portfolio reached GEL 20,838.8 million, up by 20.5% YoY and 2.3% QoQ, or up by 17.9% YoY and 2.5% QoQ on a constant currency basis.

In 1Q 2024, our Georgian financial services deposit portfolio increased by 19.2% on a YoY and 1.6% on a QoQ basis and reached GEL 20,219.9 million, with 16.4% YoY and 1.7% QoQ growth on a constant currency basis. Over the same period, our Uzbek portfolio almost doubled YoY and by 13.0% QoQ. The quarterly increase was translated into growth of 15.2% on a constant currency basis.

In thousands of GEL Customer accounts	Mar'24	Dec'23	Mar'23	Change YoY	Change QoQ
Georgia FS*	20,219,932	19,900,342	16,958,444	19.2%	1.6%
Retail Georgia	7,498,419	7,469,587	6,455,890	16.1%	0.4%
CIB Georgia	9,833,975	10,200,321	8,431,537	16.6%	-3.6%
MSME Georgia	1,869,140	1,900,459	1,593,375	17.3%	-1.6%
MOF	1,110,024	515,079	609,283	82.2%	115.5%
Uzbekistan	657,190	581,483	374,429	75.5%	13.0%
Total customer accounts**	20,838,768	20,375,498	17,297,630	20.5%	2.3%

* Georgian FS includes sub-segment eliminations
** Total customer accounts are adjusted for eliminations

	1Q'24	4Q'23	1Q'23	Change YoY	Change QoQ
Deposit rates	5.4%	5.1%	4.9%	0.5 pp	0.3 pp
GEL	8.0%	8.1%	8.8%	-0.8 pp	-0.1 pp
FC	1.3%	1.1%	0.7%	0.6 pp	0.2 pp
UZS	25.5%	25.0%	25.4%	0.1 pp	0.5 pp
Georgian financial services	4.8%	4.5%	4.5%	0.3 pp	0.3 pp
GEL	8.0%	8.1%	8.8%	-0.8 pp	-0.1 pp
FC	1.3%	1.1%	0.7%	0.6 pp	0.2 pp
Uzbek business	25.4%	24.9%	25.3%	0.1 pp	0.5 pp
FC	3.7%	3.8%	4.9%	-1.2 pp	-0.1 pp
UZS	25.5%	25.0%	25.4%	0.1 pp	0.5 pp
Total deposit rates*	5.4%	5.1%	4.9%	0.5 pp	0.3 pp

* Total deposits rates include MOF deposits

Additional information

1)   Financial disclosures by business lines

Business line definitions

According to the updated segment definition starting from 1 January 2023, the operating segments are defined as follows:

·      Georgian financial services (GFS) - include JSC TBC Bank with its Georgian subsidiaries and JSC TBC Insurance with its subsidiary. The Georgia financial service segment consists of three major business sub-segments, while the treasury, leasing and insurance businesses are combined into the corporate and other sub-segments:

o  Corporate and investment banking (CIB) - a legal entity/group of affiliated entities with an annual revenue exceeding GEL 20 million or which has been granted facilities of more than GEL 7.5 million. Some other business customers may also be assigned to the CIB segment or transferred to the micro, small and medium enterprises segment on a discretionary basis. In addition, CIB includes Wealth Management private banking services to high-net-worth individuals with a threshold of USD 250,000 on assets under management (AUM), as well as on discretionary basis;

o  Retail - non-business individual customers;

o  Micro, small and medium enterprises (MSME) - business customers who are not included in the CIB sub-segment.

·      Uzbekistan - TBC Bank Uzbekistan with respective subsidiaries and Payme (Inspired LLC).

·      Other - includes non-material or non-financial subsidiaries of the group and intra-group eliminations.

Income statement and other comprehensive income by business lines as of 1Q 2024

In thousands of GEL	Georgia FS	Uzbekistan	Other**	Group
Interest income	736,833	101,324	2,197	840,354
Interest expense*	(351,165)	(47,028)	683	(397,510)
Net interest income	385,668	54,296	2,880	442,844
Fee and commission income	148,492	28,073	2,923	179,488
Fee and commission expense	(67,249)	(7,899)	(37)	(75,185)
Net fee and commission income	81,243	20,174	2,886	104,303
Net insurance income	7,976	-	(173)	7,803
Net gains/(losses) from currency derivatives, foreign currency operations and translation	64,629	(426)	(2,734)	61,469
Net gains from disposal of investment securities measured at fair value through other comprehensive income	233	-	-	233
Other operating income	1,319	1	49	1,369
Share of loss of associates	(41)	-	-	(41)
Other operating non-interest income	74,116	(425)	(2,858)	70,833
Credit loss (allowance)/recovery for loans to customers	(36,825)	(11,753)	4,678	(43,900)
Credit loss allowance for finance lease receivable	(1,548)	(403)	(95)	(2,046)
Credit loss allowance for performance guarantees and credit related commitments	(394)	-	-	(394)
Credit loss recovery/(allowance) for other financial assets	1,710	(120)	-	1,590
Credit loss allowance for financial assets measured at fair value through other comprehensive income	(335)	-	-	(335)
Net impairment of non-financial assets	(23)	-	(23)	(46)
Operating income after expected credit and non-financial asset impairment losses	503,612	61,769	7,468	572,849
Staff costs	(101,240)	(12,974)	(12,349)	(126,563)
Depreciation and amortisation	(29,265)	(2,759)	(2,084)	(34,108)
Allowance of provision for liabilities and charges	78	-	-	78
Administrative and other operating expenses	(44,842)	(24,635)	399	(69,078)
Operating expenses	(175,269)	(40,368)	(14,034)	(229,671)
Profit before tax	328,343	21,401	(6,566)	343,178
Income tax expense	(43,704)	(2,964)	(39)	(46,707)
Profit for the period	284,639	18,437	(6,605)	296,471
Profit attributable to:
- Shareholders of TBCG	284,634	18,437	(10,266)	292,805
- Non-controlling interest	5	-	3,661	3,666
Profit for the period	284,639	18,437	(6,605)	296,471

* Interest expense includes net interest gains from currency swaps

** Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations

Balance sheet by business lines as of 31 March 2024

In thousands of GEL	Georgia FS	Uzbekistan	Other*	Group
ASSETS
Cash and cash equivalents	2,969,683	185,828	(8,122)	3,147,389
Due from other banks	24,268	-	28	24,296
Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan	1,552,123	5,098	-	1,557,221
Loans and advances to customers	21,276,764	886,119	20,646	22,183,529
Investment securities measured at fair value through other comprehensive income	3,875,799	-	-	3,875,799
Bonds carried at amortised cost	13,969	59,129	-	73,098
Finance lease receivables	364,757	39,142	7,487	411,386
Investment properties	15,921	-	-	15,921
Investments in associates	18,106	-	(14,613)	3,493
Current income tax prepayment	5,201	-	245	5,446
Deferred income tax asset	-	3,966	405	4,371
Other financial assets	292,776	42,004	(23,353)	311,427
Other assets	428,817	20,645	4,709	454,171
Premises and equipment	495,328	16,070	6,301	517,699
Right of use assets	118,386	4,663	3,831	126,880
Intangible assets	367,873	32,078	89,494	489,445
Goodwill	28,197	1,912	29,855	59,964
TOTAL ASSETS	31,847,968	1,296,654	116,913	33,261,535
LIABILITIES
Due to credit institutions	3,601,828	183,940	(83,251)	3,702,517
Customer accounts	20,219,932	657,190	(38,354)	20,838,768
Other financial liabilities	725,674	42,185	(130,920)	636,939
Current income tax liability	11,774	-	172	11,946
Deferred income tax liability	53,315	-	-	53,315
Debt Securities in issue	1,286,535	-	215,116	1,501,651
Provision for liabilities and charges	21,118	-	-	21,118
Other liabilities	70,858	43,336	2,129	116,323
Lease liabilities	90,136	5,950	3,415	99,501
Subordinated debt	1,050,650	43,151	(43,610)	1,050,191
Redemption liability	-	-	375,350	375,350
TOTAL LIABILITIES	27,131,820	975,752	300,047	28,407,619
EQUITY
Share capital	29,148	331,684	(359,142)	1,690
Shares held by trust	-	-	(45,675)	(45,675)
Share premium	521,190	35,723	(261,308)	295,605
Retained earnings	4,217,188	(4,828)	258,016	4,470,376
Merger reserve	-	67	402,795	402,862
Share based payment reserve	(85,276)	-	70,587	(14,689)
Fair value reserve for investment securities measured at fair value through other comprehensive income	33,696	-	-	33,696
Cumulative currency translation reserve	-	(41,746)	(12,991)	(54,737)
Other reserves	-	2	(375,322)	(375,320)
Equity attributable to owners of the parent	4,715,946	320,902	(323,040)	4,713,808
Non-controlling interest	202	-	139,906	140,108
TOTAL EQUITY	4,716,148	320,902	(183,134)	4,853,916
TOTAL LIABILITIES AND EQUITY	31,847,968	1,296,654	116,913	33,261,535

* Includes Azerbaijan, TNET, other subsidiaries and intra-group eliminations

Key ratios by business lines

1Q'24	Georgia FS	Uzbekistan	Group
Profitability ratios:
ROE1	24.0%	23.7%	25.1%
ROA2	3.6%	6.5%	3.6%
Cost to income3	32.4%	54.5%	37.2%
NIM4	5.9%	23.6%	6.5%
Loan yields5	11.4%	43.2%	12.7%
Deposit rates6	4.8%	25.4%	5.4%
Cost of funding7	5.4%	24.1%	6.0%
Asset quality & portfolio concentration:
Cost of risk8	0.7%	5.5%	0.8%
PAR 90 to gross loans9	1.2%	2.1%	1.2%
NPLs to gross loans10	2.2%	2.1%	2.2%
NPL provision coverage11	68.1%	220.8%	74.4%
Total NPL coverage12	136.6%	220.8%	140.3%

For the ratio definitions and exchange rates, please refer to appendix 3.

2)   Glossary

Terminology	Definition
BVPS	Book value per share
CBU	Central Bank of Uzbekistan
Consumer loans	Unsecured loans to individuals
Digital daily active users (Digital DAU)	The number of retail digital users, who logged into our digital channels at least once per day
Digital monthly active users (Digital MAU)	The number of retail digital users, who logged into our digital channels at least once a month
EPS	Earnings per share
Gross merchandise value (GMV)	GMV equals the total value of sales over the given period, including auctions through housing and auto platforms, as well as listing fees
Monthly active customers	For Georgian business, an individual user who has at least one active product as of the reporting date or performed at least one transaction during the past month. For Uzbek business, an individual user who logged into the digital application at least once during the month
NBG	National Bank of Georgia

3)   Ratio definitions and exchange rates

Ratio definitions

1. Return on average total equity (ROE) equals profit attributable to owners divided by the monthly average of total shareholders' equity attributable to the PLC's equity holders for the same period; annualised where applicable.

2. Return on average total assets (ROA) equals profit of the period divided by monthly average total assets for the same period; annualised where applicable.

3. Cost to income ratio equals total operating expenses for the period divided by the total revenue for the same period. (Revenue represents the sum of net interest income, net fee and commission income and other non-interest income).

4. Net interest margin (NIM) is net interest income divided by monthly average interest-earning assets; annualised where applicable. Interest-earning assets include investment securities (excluding CIB shares), net investment in finance lease, net loans, and amounts due from credit institutions.

5. Loan yields equal interest income on loans and advances to customers divided by monthly average gross loans and advances to customers; annualised where applicable.

6. Deposit rates equal interest expense on customer accounts divided by monthly average total customer deposits; annualised where applicable.

7. Cost of funding equals sum of the total interest expense and net interest gains on currency swaps (entered for funding management purposes), divided by monthly average interest-bearing liabilities; annualised where applicable.

8. Cost of risk equals credit loss allowance for loans to customers divided by monthly average gross loans and advances to customers; annualised where applicable.

9. PAR 90 to gross loans ratio equals loans for which principal or interest repayment is overdue for more than 90 days divided by the gross loan portfolio for the same period.

10. NPLs to gross loans equals loans with 90 days past due on principal or interest payments, and loans with a well-defined weakness, regardless of the existence of any past-due amount or of the number of days past due divided by the gross loan portfolio for the same period.

11. NPL provision coverage equals total credit loss allowance for loans to customers divided by the NPL loans.

12. Total NPL coverage equals total credit loss allowance plus the minimum of collateral amount of the respective NPL loan (after applying haircuts in the range of 0%-50% for cash, gold, real estate and PPE) and its gross loan exposure divided by the gross exposure of total NPL loans.

13. Credit loss level to gross loans equals credit loss allowance for loans to customers divided by the gross loan portfolio for the same period.

14. Related party loans to total loans equals related party loans divided by the gross loan portfolio.

15. Top 10 borrowers to total portfolio equals the total loan amount of the top 10 borrowers divided by the gross loan portfolio.

16. Top 20 borrowers to total portfolio equals the total loan amount of the top 20 borrowers divided by the gross loan portfolio.

17. Net loans to deposits plus IFI funding ratio equals net loans divided by total deposits plus borrowings received from international financial institutions.

18. Leverage equals total assets to total equity.

19. Net stable funding ratio equals the available amount of stable funding divided by the required amount of stable funding as defined by NBG in line with Basel III guidelines. Calculations are made for TBC Bank standalone.

20. Liquidity coverage ratio equals high-quality liquid assets divided by the total net cash outflow amount as defined by the NBG. Calculations are made for TBC Bank standalone.

21. CET 1 CAR equals CET 1 capital divided by total risk weighted assets, both calculated in accordance with requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone.

22. Tier 1 CAR equals tier I capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone.

23. Total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of the NBG Basel III standards. Calculations are made for TBC Bank standalone.

24. CET 1 CAR equals CET 1 capital divided by total risk weighted assets, both calculated in accordance with requirements of the CBU in national accounting standards. Calculations are made for TBC UZ Bank standalone.

25. Tier 1 CAR equals tier I capital divided by total risk weighted assets, both calculated in accordance with the requirements of the CBU in national accounting standards. Calculations are made for TBC UZ Bank standalone.

26. Total CAR equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of the CBU in national accounting standards. Calculations are made for TBC UZ Bank standalone.

Exchange rates

To calculate the QoQ growth of the balance sheet items without the currency exchange rate effect, we used the USD/GEL exchange rate of 2.6894 as of 31 December 2023. To calculate the YoY growth without the currency exchange rate effect, we used the USD/GEL exchange rate of 2.5604 as of 31 March 2023. As of 31 March 2024, the USD/GEL exchange rate equalled 2.6953. For P&L items growth calculations without the currency effect, we used the average USD/GEL exchange rate for the following periods: 4Q 2023 of 26943 and 1Q 2023 of 2.6372. As of 1Q 2024, the USD/GEL exchange rate equalled 2.6713.

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[1] Note: For better presentation purposes, certain financial numbers are rounded to the nearest whole number.

[2] Based on data published by the CBU, as of 1 April 2024.

[3] Remittances from Russia are adjusted for double counting with tourism inflows and other similar effects, based on TBC Capital estimates.

[4] Per IMF program definition.

[5] Based on data published by NBG and FX-adjusted by TBC, based on Dec-2023 end of period exchange rate.

^[6] Based on data published by CBU.

[7]Based on data published by the Uzstat

 

END