Source - LSE Regulatory
RNS Number : 4185D
TBC Bank Group PLC
16 February 2024
 

 

TBC BANK GROUP PLC ("TBC Bank")

4Q AND FY 2023 PRELIMINARY 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.

 

 

 

4Q and FY 2023 Consolidated Financial Results Conference Call Details

 

TBC Bank Group PLC ("TBC PLC") will publish its preliminary unaudited consolidated financial results for the fourth quarter and full year 2023 on Friday, 16 February 2024 at 7.00 AM GMT. On the same day, the management team will host a conference call at 2.00 PM GMT.

 

 

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

https://www.netroadshow.com/events/login?show=cbfcd3a8&confId=60444

You will receive access details via email.

 

 

 

 

Contacts

 



 

 


Andrew Keeley

Director of Investor Relations

 

 

E-mail:  AKeeley@tbcbank.com.ge

Tel:  +44 (0) 7791 569834

Web: www.tbcbankgroup.com

 

 

 

Anna Romelashvili                                             

Head of Investor Relations

 

 

E-mail:  IR@tbcbank.com.ge 

Tel:  +(995 32) 227 27 27

Web: www.tbcbankgroup.com

 

Investor Relations Department

 

 

 

E-mail:  IR@tbcbank.com.ge 

Tel:  +(995 32) 227 27 27

Web: www.tbcbankgroup.com

 

 

Table of Contents

 

4Q and FY 2023 Preliminary 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 4Q 2023

Preliminary Unaudited Consolidated Financial Results Overview for FY 2023

 

Additional Disclosures

1)          TBC Bank - Background

2)          Consolidated Financial Statements and Key Ratios 4Q 2023

3)          Consolidated Financial Statements and Key Ratios FY 2023

4)          Business Line Definition

5)          Financial Disclosures by Business Lines

6)          Market shares in Georgia

7)          Subsidiaries of TBC Bank Group PLC

8)          Replacement of IFRS 4 with IFRS 17

9)          Legal and regulatory matters

10)Loan Book Breakdown by Stages According IFRS 9

11)Glossary

12)Ratio Definitions and Exchange Rates

 



 

 

4Q and FY 2023 Preliminary Unaudited Consolidated Financial Results

4Q 2023 profit of GEL 291 million, up by 30% YoY, with ROE at 25.2%.

FY 2023 profit of GEL 1,140 million, up by 14% YoY, with ROE at 26.5%.

 

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.

The financial information contained in this document does not constitute statutory accounts for the years ended 31 December 2023 and 31 December 2022 within the meaning of section 435 of the Companies Act 2006 (the Act), but is derived from those accounts. The statutory accounts for the year ended 31 December 2023 will be published on the Group's website and will be delivered to the Registrar of Companies in accordance with section 441 of the Act. The auditor's report on those accounts is expected to be unqualified. The statutory accounts for the year ended 31 December 2022 have been filed with the Registrar of Companies, and the auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not include a statement under sections 498(2) or 498(3) of the Act.

Financial Highlights

Income statement

in thousands of GEL

4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

FY'23

FY'22

Change YoY

Net interest income

441,735

427,934

357,446

23.6%

3.2%

1,635,798

1,290,052

26.8%

Net fee and commission income

110,099

104,152

95,332

15.5%

5.7%

412,325

322,666

27.8%

Other non-interest income

87,442

83,133

151,454

-42.3%

5.2%

325,377

458,046

-29.0%

Total operating income

639,276

615,219

604,232

5.8%

3.9%

2,373,500

2,070,764

14.6%

Total credit loss allowance

(47,479)

(46,159)

(33,054)

43.6%

2.9%

(180,740)

(132,900)

36.0%

Operating expenses

(254,500)

(218,087)

(200,495)

26.9%

16.7%

(858,927)

(691,320)

24.2%

Profit before tax

337,297

350,973

370,683

-9.0%

-3.9%

1,333,833

1,246,544

7.0%

Income tax expense

(45,856)

(50,485)

(146,909)

-68.8%

-9.2%

(193,858)

(243,205)

-20.3%

Profit for the period

291,441

300,488

223,774

30.2%

-3.0%

1,139,975

1,003,339

13.6%

 

Balance sheet

in thousands of GEL

Dec'23

Sep'23

Dec'22

Change YoY

Change QoQ

Total Assets

32,964,827

29,956,393

28,988,141

13.7%

10.0%

Gross Loans

22,073,679

20,365,135

18,204,971

21.3%

8.4%

Customer Deposits

20,375,498

18,722,415

18,036,533

13.0%

8.8%

Total Equity

4,820,182

4,473,400

3,966,414

21.5%

7.8%

CET 1 Capital (Basel III)

4,235,033

3,966,901

n/a

n/a

6.8%

Tier 1 Capital (Basel III)

4,772,913

4,502,561

n/a

n/a

6.0%

Total Capital (Basel III)

5,374,301

5,058,696

n/a

n/a

6.2%

Risk Weighted Assets (Basel III)

24,336,690

22,668,335

n/a

n/a

7.4%

Number of shares

55,393,664

55,140,216

55,102,766

0.5%

0.5%

 

Key Ratios

 

4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

FY'23

FY'22

Change YoY

ROE

25.2%

27.6%

22.3%

2.9 pp

-2.4 pp

26.5%

27.0%

-0.5 pp

ROE - Georgia FS

24.7%

26.4%

21.0%

3.7 pp

-1.7 pp

25.5%

26.0%

-0.5 pp

ROA

3.7%

4.1%

3.1%

0.6 pp

-0.4 pp

3.9%

3.8%

0.1 pp

ROA - Georgia FS

3.8%

4.2%

3.3%

0.5 pp

-0.4 pp

4.0%

4.1%

-0.1 pp

NIM

6.7%

6.9%

6.3%

0.4 pp

-0.2 pp

6.7%

6.0%

0.7 pp

Cost to income

39.8%

35.4%

33.2%

6.6 pp

4.4 pp

36.2%

33.4%

2.8 pp

Cost to income - Georgia FS

35.4%

31.5%

29.7%

5.7 pp

3.9 pp

31.9%

28.9%

3.0 pp

Cost of risk

0.8%

0.9%

0.6%

0.2 pp

-0.1 pp

0.8%

0.7%

0.1 pp

NPL to gross loans

2.0%

2.0%

2.2%

-0.2 pp

0.0 pp

2.0%

2.2%

-0.2 pp

NPL provision coverage ratio

79.8%

87.6%

93.7%

-13.9 pp

-7.8 pp

79.8%

93.7%

-13.9 pp

Total NPL coverage ratio

146.3%

151.6%

155.6%

-9.3 pp

-5.3 pp

146.3%

155.6%

-9.3 pp

CET 1 CAR (Basel III)

17.4%

17.5%

n/a

n/a

-0.1 pp

17.4%

n/a

n/a

Tier 1 CAR (Basel III)

19.6%

19.9%

n/a

n/a

-0.3 pp

19.6%

n/a

n/a

Total CAR (Basel III)

22.1%

22.3%

n/a

n/a

-0.2 pp

22.1%

n/a

n/a

Leverage (Times)

6.8x

6.7x

7.3x

-0.5x

0.1x

6.8x

7.3x

-0.5x

EPS (GEL)

5.31

5.54

3.98

33.4%

-4.2%

20.74

15.44

34.3%

Diluted EPS (GEL)

5.26

5.45

3.91

34.5%

-3.5%

20.58

15.22

35.2%

BVPS (GEL)

86.32

80.81

71.27

21.1%

6.8%

86.32

71.27

21.1%

Georgia FS refers to Georgian financial services.

For the ratio definitions please refer to appendix 12.

 

Operational Highlights

Customer base

In millions 

Dec'23

Sep'23

Dec'22

Change YoY

Change QoQ

Total number of registered users

19.0

17.3

13.6

40%

10%

  Georgia

3.3

3.2

3.0

10%

3%

  Uzbekistan

15.7

14.1

10.6

48%

11%

Total monthly active customers

5.9

5.3

4.4

34%

11%

   Georgia

1.6

1.6

1.5

7%

0%

   Uzbekistan

4.3

3.7

2.9

48%

16%

 

Digital customers

 In thousands

Dec'23

Sep'23

Dec'22

Change YoY

Change QoQ

Digital DAU Georgia

421

384

384

10%

10%

Digital MAU Georgia

921

874

801

15%

5%

Digital DAU/MAU Georgia

46%

44%

48%

-2 pp

2 pp

Digital DAU Group

1,718

1,436

1,389

24%

20%

Digital MAU Group

5,207

4,519

3,776

38%

15%

Digital DAU/MAU Group

33%

32%

37%

 -4 pp

 1 pp

 

Uzbekistan - key highlights

In thousands of GEL

Dec'23

Sep'23

Dec'22

Change YoY

Change QoQ

Gross loans

796,930

632,013

347,695

129.2%

26.1%

Customer accounts

581,483

515,586

330,976

75.7%

12.8%

 

 

4Q'23

3Q'23

Change QoQ

FY'23

Profit for the period (GEL, thousands)

20,433

13,684

49.3%

59,329

ROE

29.7%

23.4%

6.3 pp

26.0%

 

 

TNET - digital lifestyle platform in Georgia

In millions

4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

FY'23

FY'22

Change YoY

Gross merchandise value (GMV, GEL)

36.4

44.8

31.8

14.5%

-18.8%

164.4

103.2

59.3%

Number of transactions

4.1

3.7

3.0

36.7%

10.8%

15.4

11.8

30.5%

 



 

Letter from the Chief Executive Officer[1]

I am delighted to report that the fourth quarter of 2023 marked another successful quarter for TBC, rounding off what has been an excellent full-year performance. In 4Q, our profit of GEL 291 million was up 30% year-on-year, with 25.2% ROE (or down by 14% year-on-year adjusted for the one-off tax charge in 4Q 2022). For FY 2023, our profit reached a record GEL 1,140 million, a 14% year-on-year increase (or 2% year-on-year on an adjusted basis), with a corresponding ROE of 26.5%.

As a result, I am very pleased to report that the Board has recommended a final dividend per share of GEL 4.67, which brings the full year dividend per share to GEL 7.22, an increase of 32% year-on-year. This represents a dividend payout ratio for 2023 of 35%, up from 30% in 2022. This dividend reflects that as a business we strive to invest in new value accretive growth opportunities whilst also returning capital to our shareholders.

While the geopolitical backdrop has remained difficult, the final quarter brought some very positive news for Georgia, with the EU's decision in mid-December to grant candidate status. Much work remains to be done, but this represents a massive step for Georgia in its long-term aim of closer integration with the EU. All Georgians can be rightly proud to have achieved this recognition.

Economic growth remains robust

On the economic front, 2023 was a year of normalisation in Georgia, with real GDP growth of 7.5% on the back of still strong net FX inflows. The GEL has stabilised and is now more aligned with its long-term trend, while inflation is already undershooting the NBG's target, enabling a gradual easing cycle towards a neutral monetary policy stance. Importantly, substantial international reserves and fiscal buffers have been accumulated, strengthening the economic foundations in case of any unwanted shocks.

Economic activity was also strong in Uzbekistan with 6.5% real GDP growth in the fourth quarter and 6.0% in 2023. Moreover, inflation has slowed to 8.8%, down from 12.3% a year ago. As inflation declines, this may prove supportive for UZS exchange rate dynamics going forward.

Strong financial and operating performance continued in 4Q 2023

Turning to our operating performance, the final quarter saw a continuation of the strong revenue trends we have seen throughout the year. In 4Q 2023, our operating income reached GEL 639 million, up 6% year-on-year, despite the abnormally high FX revenues we received in 4Q 2022. Net interest income rose by 24% year-on-year, supported by net interest margin increasing by 40 bps year-on-year to 6.7% in 4Q 2023. Additionally, net fee and commission income increased by 16% year-on-year. Our costs rose by 27% year-on-year in 4Q 2023 primarily due to robust growth of the business in the final quarter and performance-related remuneration in recognition of the year's strong operating performance.

Our customer base continues to increase, with our digital MAU reaching 5.2 million at the Group level by end 2023, up by 1.4 million customers in the past 12 months. Our DAU/MAU ratio stood at 33% as more of our customers engage with us on a daily basis, while the Georgian business digital DAU/MAU ratio stood at 46%.

Credit growth remains robust. Our Group's gross loan book increased by 21% year-on-year as of 31 December 2023 on a constant currency basis, while our asset quality remained healthy in 4Q 2023, translating into 0.8% cost of risk, up by 20bps year-on-year, with the share of NPLs just 2.0%. On the funding side, our Group's customer deposits increased by 13% year-on-year on a constant currency basis.

Our financial strength in terms of liquidity and capital positions remains very strong. As of 31 December 2023, our CET1, Tier 1 and Total Capital ratios for the Georgian bank stood at 17.4%, 19.6% and 22.1%, respectively, and remained comfortably above the minimum regulatory requirements by 3.1 pp, 3.0 pp and 2.3 pp, respectively. At the same time, we continue to operate with a high liquidity buffer, with our net stable funding (NSFR)2 and liquidity coverage (LCR)2 ratios standing at 120% and 115%, respectively.

Above 25% ROE in Georgia in 2023 combined with dynamic growth in Uzbekistan

As for the core elements of our business, Georgia continues to deliver excellent profitability, with 24.7% ROE in 4Q 2023 and 25.5% for FY 2023. On the balance sheet side, gross loans increased by 19% year-on-year on a constant currency basis.

I am also pleased to announce that our digital financial services businesses in Uzbekistan delivered another quarter of dynamic growth and improving profitability. Profit in 4Q 2023 amounted to GEL 20 million, while the profit for the full year totalled GEL 59 million, or 5% of the Group's total profit, with 26.0% ROE. As of the end of 2023, TBC UZ's retail loans amounted to GEL 797 million, up by 129% year-on-year, giving us an unsecured consumer / micro loan market share[2] of 14%, and accounting for 10% of the Group's total retail loans. At the same time, retail deposits reached GEL 581 million, up by 76% year-on-year, accounting for 3.0% retail deposit market share2.

In 2023, our digital lifestyle ecosystem, TNET, continued to deliver good growth, with GEL 164 million gross merchandise value (GMV) for the full year, up by 59% year-on-year, driven by strong progress in the lifestyle and e-commerce verticals.

Finally, I would like to express my gratitude to all our shareholders for their ongoing support as we work towards achieving our strategic goals in the coming years. We have much to be proud of for our achievements in 2023, but we are already working hard to make 2024 an even more successful year for TBC and its stakeholders.  

 


 

Economic Overview

Georgia

Economic growth remains robust

Even as growth normalises, Georgia's economic activity remained strong in 4Q 2023 with 6.8% real GDP growth YoY bringing the full year 2023 growth to 7.5%.

External sector - normalisation of inflows

The negative impact of lower international commodity prices on both exports and imports noticeably affected external sector activity in 4Q and full year 2023. Specifically, exports and imports denominated in US dollars decreased by -0.3% and -2.7% YoY in 4Q which caused their growth for the full year to moderate to 9.1% and 14.0%, respectively. Importantly, these commodity price dynamics particularly affected domestic commodity exports, while re-exports performed strongly. At the same time, the notable increase of the share of IT services in Georgian exports continued, with a major driver being the arrival of migrants in 2022.

Given the high base effect caused by elevated immigration in 2022, tourism inflows decreased by 12.6% YoY in 4Q 2023 as migrants are gradually being counted as residents by the NBG and hence being excluded from the tourism sector, while growth for the full year was 17.3%. At the same time, the share of conventional tourism in total inflows has increased recently as spending excluding visitors from Russia, Belarus and Ukraine increased by 38.2% YoY. Therefore, while the migration peak has likely passed, conventional tourism inflows have at least had a balancing impact. Also, despite decreasing notably in 4Q, remittances also maintained a positive momentum throughout the year after adjustment for Russia, increasing by 27.9%[3] YoY. A high base effect combined with a significant decline in debt instruments and lower reinvestments drove a 22.3% annual reduction in FDIs to Georgia in 9M 2023. Neverthless, taking the record high level in 2022 into account, foreign direct investments in 2023 also appear solid. 

Fiscal consolidation under way

It is important to highlight that the strong recent economic growth is not a result of fiscal stimulus. In fact, fiscal consolidation is under way. After hitting 9.2% of GDP in 2020 and a lower, but still large, level of 6.0% in 2021, the budget deficit[4] stood at 3.0% in 2022 and 2.8% in 2023.

Credit growth has accelerated

As of December 2023, bank credit increased by 17.0% YoY, against 14.8% growth at the end of 3Q 2023 and 12.1% in December 2022, at constant exchange rates[5]. At the same time, as inflation remained stably low, the YoY growth in real credit increased from 14.1% in September to 16.5% in December 2023.

Low inflation enables monetary policy easing

As a result of a broadly stable GEL and sustained disinflationary pass-through from international markets, CPI inflation stabilised well below the NBG target of 3%, standing at 0.4% YoY in December. Domestic and service inflation measures also normalised around the target. Due to low inflation, the NBG delivered the year's fourth rate cut of 50 basis points in December, reducing the monetary policy rate (MPR) to 9.5% (and it has since been cut by a further 50 bps to 9.0% in January 2024).

Despite low inflation, a reduced MPR and seasonal depreciation expectations, improved net inflows alongside NBG interventions helped the GEL to remain stable relative to the USD throughout the fourth quarter, after some volatility during the previous quarters, driven by the normalisation of foreign currency inflows. Throughout the year, NBG purchased USD 1,449 million and sold USD 169 million. The USD/GEL stood at 2.69 at the end of December, almost unchanged from 2.68 USD in September 2023 and 2.7 USD at the end of December 2022.

Uzbekistan

Uzbekistan also demonstrated robust economic activity with 6.5%[6] growth in the fourth quarter and 6.0% for the full year 2023. External trade was strong as exports of goods increased by 28.7% and imports by 33.3% YoY in 4Q, and by 25.4% and 26.3%6 for the full year 2023, respectively. Retail loan growth was 47.2% YoY in 2023, with mortgage credit expanding by 25.2% and non-mortgage by 66.0%[7]. Annual inflation decreased slightly from 9.2% in September to 8.8% in December, with a more pronounced deceleration evident when compared to 12.3% in December 20227. The CBU kept its monetary policy rate unchanged at 14.0% in the fourth quarter, delivering only one, 100 basis point rate cut throughout 2023 in March. The UZS stood at 12,339 relative to the USD at the end of December 20237, depreciating by 10% compared to December 2022, while the REER (real effective exchange rate) remained broadly stable.

Economic outlook remains supportive

After two successive years of double-digit growth in Georgia, economic activity moderated somewhat but remained strong in 2023 at 7.5%.  Further normalisation is expected with Georgia's real GDP increasing by 5.6% in 2024 and 5.4% in 2025, according to TBC Capital projections, while the baseline for Uzbekistan stands at around 5.5% for the next couple of years.

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



 

Unaudited Consolidated Financial Results Overview for 4Q 2023

This statement provides a summary of the business and financial trends for 4Q 2023 for TBC Bank Group plc and its subsidiaries. The financial information and trends are unaudited.

Total assets and total liabilities for 31-Dec-2022 were restated due to replacement of IFRS 4 with IFRS 17. For more details, please refer to appendix 8.

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

Net Interest Income

In 4Q 2023, net interest income amounted to GEL 441.7 million, up by 23.6% and 3.2% on a YoY and QoQ basis, respectively.

The YoY rise in interest income of GEL 165.4 million, or 25.7%, was mostly attributable to an increase in interest income from loans related to a rise in the respective yield by 0.6 pp, as well as an increase in the loan portfolio of GEL 3,868.7 million, or 21.3%.

The QoQ increase in interest income of GEL 56.8 million, or 7.5%, was mainly related to an increase in interest income from loans on the back of growth in the loan portfolio of GEL 1,708.5 million, or 8.4%, as well as slight growth in loan yields by 0.1 pp.

Interest expense increased by GEL 81.2 million, or 28.2%, on a YoY basis, mainly related to an increase in the deposit portfolio of GEL 2,339.0 million, or 13.0%, and a 0.8 pp growth in deposit costs.

On a QoQ basis, interest expense increased by GEL 43.0 million, or 13.2%, primarily driven by an increase in the deposit portfolio of GEL 1,653.1 million, or 8.8%, and a 0.2 pp growth in deposit rates.

In 4Q 2023, our NIM stood at 6.7%, up by 0.4 pp and down by 0.2 pp on a YoY and QoQ basis, respectively.

In thousands of GEL

 4Q'23

 3Q'23

 4Q'22

Change YoY

Change QoQ

Interest income

810,428

753,658

644,981

25.7%

7.5%

Interest expense*

(368,693)

(325,724)

(287,535)

28.2%

13.2%

Net interest income

441,735

427,934

357,446

23.6%

3.2%


 

 

 

 

 

NIM

6.7%

6.9%

6.3%

0.4 pp

-0.2 pp

* Interest expense includes net interest gains from currency swaps

 

Non-Interest Income

In 4Q 2023, our net fee and commission income increased by 15.5% YoY and increased by 5.7% on a QoQ basis. The YoY increase was mainly related to increased payments transactions. In 4Q 2023, our Uzbek business contributed 19% to the Group's net fee & commission income.

In 4Q 2023, net gains from currency operations were down by 50.8% on a YoY basis, due to abnormally high FX revenues in 4Q 2022, while they increased by 1.9% on a QoQ basis.

In thousands of GEL

Non-interest income

 4Q'23

 3Q'23

 4Q'22

Change YoY

Change QoQ

Net fee and commission income

110,099

104,152

95,332

15.5%

5.7%

Net gains from currency derivatives, foreign currency operations and translation

68,228

66,968

138,777

-50.8%

1.9%

Net insurance income

9,090

9,798

8,218

10.6%

-7.2%

Other operating income

10,124

6,367

4,459

NMF

59.0%

Total non-interest income

197,541

187,285

246,786

-20.0%

5.5%

 

Credit Loss Allowance

Credit loss allowance for loans in 4Q 2023 amounted to GEL 40.6 million, while cost of risk stood at 0.8%. The increase in credit loss allowance for loans was mainly driven by strong loan book growth as well as normalisation of CoR.

In thousands of GEL

 4Q'23

 3Q'23

 4Q'22

Change YoY

Change QoQ

Credit loss allowance for loans to customers

(40,640)

(42,595)

(27,002)

50.5%

-4.6%

Credit loss allowance for other transactions

(6,839)

(3,564)

(6,052)

13.0%

91.9%

Total credit loss allowance

(47,479)

(46,159)

(33,054)

43.6%

2.9%

Operating income after expected credit losses and non-financial asset impairment losses

591,797

569,060

571,178

3.6%

4.0%


 

 

 



Cost of risk

0.8%

0.9%

0.6%

0.2 pp

-0.1 pp

 

Operating Expenses

In 4Q 2023, our operating expenses rose by 26.9% and 16.7% on a YoY and QoQ basis, respectively. The YoY increase was mainly driven by overall business growth, while the QoQ increase was related to the seasonally high costs in the fourth quarter of 2023.

In thousands of GEL

Operating expenses

 4Q'23

 3Q'23

 4Q'22

Change YoY

Change QoQ

Staff costs

(139,766)

(121,056)

(103,764)

34.7%

15.5%

Allowance of provision for liabilities and charges

-

(34)

(140)

NMF

NMF

Depreciation and amortisation

(28,741)

(29,286)

(27,181)

5.7%

-1.9%

Administrative and other operating expenses

(85,993)

(67,711)

(69,410)

23.9%

27.0%

Total operating expenses

(254,500)

(218,087)

(200,495)

26.9%

16.7%







Cost to income

39.8%

35.4%

33.2%

6.6 pp

4.4 pp

Georgian financial services' cost to income

35.4%

31.5%

29.7%

5.7 pp

3.9 pp

For the definition of the Georgian financial services, please refer to appendix 4.

Profit

Our profit increased by 30.2% and decreased by 3.0% on a YoY and QoQ basis, respectively, and amounted to GEL 291.4 million. During the quarter, our Uzbek operations contributed GEL 20.4 million or 7% of the Group's profit.

Income tax expense decreased on a YoY basis, driven by the one-off tax charge in 4Q 2022, due to changes in the Georgian taxation model.

As a result, in 4Q 2023 our ROE stood at 25.2%, while our ROA reached 3.7%.

 In thousands of GEL

 4Q'23

 3Q'23

 4Q'22

Change YoY

Change QoQ

Profit before tax

337,297

350,973

370,683

-9.0%

-3.9%

Income tax expense

(45,856)

(50,485)

(146,909)

-68.8%

-9.2%

Profit for the period

291,441

300,488

223,774

30.2%

-3.0%





 

 

ROE

25.2%

27.6%

22.3%

2.9 pp

-2.4 pp

Georgian financial services' ROE

24.7%

26.4%

21.0%

3.7 pp

-1.7 pp

ROA

3.7%

4.1%

3.1%

0.6 pp

-0.4 pp

Georgian financial services' ROA

3.8%

4.2%

3.3%

0.5 pp

-0.4 pp

 

Funding and Liquidity

As of 31 December 2023, the total liquidity coverage ratio (LCR), as defined by the NBG, was 115.3%, above the 100% limit, while the LCR in GEL and foreign currency (FC) stood at 109.8% and 120.1%, accordingly, above the respective limits of 75% and 100%.

Over the same period, the net stable funding ratio (NSFR), as defined by the NBG, stood at 119.9%, compared to the regulatory limit of 100%.

 

Dec'23

Sep'23

Change QoQ

Minimum net stable funding ratio, as defined by the NBG

100.0%

100.0%

0.0 pp

Net stable funding ratio as defined by the NBG

119.9%

124.1%

-4.2 pp

 




Net loans to deposits + IFI funding

96.1%

96.9%

-0.8 pp

Leverage (Times)

6.8x

6.7x

0.1x

 




Minimum total liquidity coverage ratio, as defined by the NBG

100.0%

100.0%

0.0 pp

Minimum LCR in GEL, as defined by the NBG

75%

75.0%

0.0 pp

Minimum LCR in FC, as defined by the NBG

100.0%

100.0%

0.0 pp

 




Total liquidity coverage ratio, as defined by the NBG

115.3%

114.1%

1.2 pp

LCR in GEL, as defined by the NBG

109.8%

105.7%

4.1 pp

LCR in FC, as defined by the NBG

120.1%

121.0%

-0.9 pp

Regulatory Capital for Georgian Bank

As of 31 December 2023, our capital ratios remained at a strong level and as a result, our CET1, Tier 1 and Total Capital ratios stood at 17.4%, 19.6% and 22.1%, respectively, above the minimum regulatory requirements by 3.1 pp, 3.0 pp and 2.3 pp, accordingly.

The QoQ decreases in all CET1, Tier 1 and Total capital adequacy ratios were largely driven by high portfolio growth and annual operational RWA growth.

 

In thousands of GEL

Dec'23

Sep'23

Change QoQ

CET 1 Capital

4,235,033

3,966,901

6.8%

Tier 1 Capital

4,772,913

4,502,561

6.0%

Total Capital

5,374,301

5,058,696

6.2%

Total Risk-weighted Assets

24,336,690

22,668,335

7.4%

 




Minimum CET 1 ratio

14.3%

14.4%

-0.1 pp

CET 1 Capital adequacy ratio

17.4%

17.5%

-0.1 pp

 




Minimum Tier 1 ratio

16.6%

16.8%

-0.2 pp

Tier 1 Capital adequacy ratio

19.6%

19.9%

-0.3 pp

 




Minimum total capital adequacy ratio

19.8%

19.9%

-0.1 pp

Total Capital adequacy ratio

22.1%

22.3%

-0.2 pp

Loan Portfolio

As of 31 December 2023, the gross loan portfolio reached GEL 22,073.7 million, up by 8.4% QoQ, or by 7.4% on a constant currency basis.

In 4Q 2023, our Georgian financial services loan portfolio increased by 7.8% on a QoQ basis and reached GEL 21,257.7 million, with 6.8% growth on a constant currency basis. Over the same period, our Uzbek portfolio increased by 26.1% and stood at GEL 796.9 million, which translated into growth of 27.3% on a constant currency basis.

In thousands of GEL

Gross loans and advances to customers

Dec'23

Sep'23

Change QoQ

Georgian financial services (Georgia FS)*

21,257,692

19,715,795

7.8%

Retail Georgia

7,513,229

7,131,727

5.3%

GEL

5,000,607

4,716,516

6.0%

FC

2,512,622

2,415,211

4.0%

CIB Georgia

8,283,723

7,385,494

12.2%

GEL

3,061,811

2,598,832

17.8%

FC

5,221,912

4,786,662

9.1%

MSME Georgia

5,480,822

5,203,680

5.3%

GEL

2,868,942

2,747,953

4.4%

FC

2,611,880

2,455,727

6.4%

Uzbekistan

796,930

632,013

26.1%

UZS

796,930

632,013

26.1%

Total gross loans and advances to customers**

22,073,679

20,365,135

8.4%

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


4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

Loan yields

12.7%

12.6%

12.1%

0.6 pp

0.1 pp

GEL

14.6%

14.8%

15.1%

-0.5 pp

-0.2 pp

FC

8.7%

8.6%

7.7%

1.0 pp

0.1 pp

UZS

41.7%

41.9%

42.6%

-0.9 pp

-0.2 pp

Georgia FS

11.7%

11.7%

11.6%

0.1 pp

0.0 pp

GEL

14.6%

14.8%

15.1%

-0.5 pp

-0.2 pp

FC

8.7%

8.5%

7.7%

1.0 pp

0.2 pp

Uzbekistan

41.7%

41.9%

42.6%

-0.9 pp

-0.2 pp

UZS

41.7%

41.9%

42.6%

-0.9 pp

-0.2 pp

Total loan yields*

12.7%

12.6%

12.1%

0.6 pp

0.1 pp

* Total loans yields include Azerbaijan

Loan Portfolio Quality

Our PAR 90 to gross loans ratios improved for both our Georgian and Uzbekistan in 4Q 2023. The decrease in PAR ratio was mainly driven by an overall improvement in portfolio quality. Over the same period, our NPL ratio remained stable.

PAR 90

Dec'23

Sep'23

Change QoQ

Georgia FS*

1.1%

1.2%

-0.1 pp

Retail Georgia

0.8%

0.9%

-0.1 pp

CIB Georgia

0.7%

0.5%

0.2 pp

MSME Georgia

2.2%

2.5%

-0.3 pp

Uzbekistan

1.9%

2.1%

-0.2 pp

Total PAR 90**

1.1%

1.2%

-0.1 pp

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

 

In thousands of GEL
Non-performing Loans (NPL)

Dec'23

Sep'23

Change QoQ

Georgia FS*

425,061

399,230

6.5%

Retail Georgia

127,102

129,162

-1.6%

CIB Georgia

114,130

94,940

20.2%

MSME Georgia

183,829

175,128

5.0%

Uzbekistan

15,006

13,584

10.5%

Total non-performing loans**

440,750

413,520

6.6%

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

NPL to gross loans

Dec'23

Sep'23

Change QoQ

Georgia FS*

2.0%

2.0%

0.0 pp

Retail Georgia

1.7%

1.8%

-0.1 pp

CIB Georgia

1.4%

1.3%

0.1 pp

MSME Georgia

3.4%

3.4%

0.0 pp

Uzbekistan

1.9%

2.1%

-0.2 pp

Total NPL to gross loans**

2.0%

2.0%

0.0 pp

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

 

Dec'23

Sep'23

NPL Coverage 

Provision Coverage

Total Coverage***

Provision Coverage

Total Coverage***

Georgia FS*

73.4%

142.2%

82.5%

148.6%

Retail Georgia

120.4%

179.5%

136.0%

189.2%

CIB Georgia

46.9%

110.6%

52.0%

111.4%

MSME Georgia

57.5%

136.0%

59.5%

138.8%

Uzbekistan

222.3%

222.3%

199.9%

199.9%

Total NPL coverage**

79.8%

146.3%

87.6%

151.6%


* 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

Given strong asset quality trends, in 4Q 2023 our cost of risk (CoR) remained within the expected range and stood at 0.8%.

In 4Q 2023, due to strong asset quality dynamics, the CoR for our Georgia FS remained broadly stable on both a YoY and QoQ basis and amounted to 0.6%. Over the same period, CoR for our Uzbek business decreased by 2.7 pp and 2.4 pp on YoY and QoQ basis, respectively and amounted to 4.9%. The decrease in Uzbekistan was mainly driven by improved portfolio quality.

Cost of risk (CoR)

4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

Georgia FS*

0.6%

0.7%

0.5%

0.1 pp

-0.1 pp

Retail Georgia

0.1%

1.1%

0.5%

-0.4 pp

-1.0 pp

CIB Georgia

0.3%

0.0%

0.1%

0.2 pp

0.3 pp

MSME Georgia

1.8%

0.9%

0.9%

0.9 pp

0.9 pp

Uzbekistan

4.9%

7.3%

7.6%

-2.7 pp

-2.4 pp

Total cost of risk**

0.8%

0.9%

0.6%

0.2 pp

-0.1 pp

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

Deposit Portfolio

As of the end of December 2023, the total deposit portfolio amounted to GEL 20,375.5 million, up by 8.8% QoQ or by 8.2% on a constant currency basis.

In 4Q 2023, the Georgian financial services deposit portfolio increased by 8.7% on a QoQ basis and reached GEL 19,900.3 million, up by 8.1% on a constant currency basis. Over the same period, our Uzbek deposit portfolio increased by 12.8% and stood at GEL 581.5 million, which translated into growth of 13.9% on a constant currency basis.

 

In thousands of GEL

Customer accounts

Dec'23

Sep'23

Change QoQ

Georgia FS*

19,900,342

18,300,484

8.7%

Retail Georgia

7,469,587

7,097,710

5.2%

GEL

2,532,317

2,224,730

13.8%

FC

4,937,270

4,872,980

1.3%

CIB Georgia

10,200,321

8,973,868

13.7%

GEL

6,105,284

5,015,787

21.7%

FC

4,095,037

3,958,081

3.5%

MSME Georgia

1,900,459

1,733,864

9.6%

GEL

1,052,675

943,887

11.5%

FC

847,784

789,977

7.3%

MOF

515,079

611,017

-15.7%

GEL

515,079

611,017

-15.7%

Uzbekistan

581,483

515,586

12.8%

FC

1,864

1,640

13.7%

UZS

579,619

513,946

12.8%

Total customer accounts**

20,375,498

18,722,415

8.8%

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

 

4Q'23

3Q'23

4Q'22

Change YoY

Change QoQ

 Deposit rates

5.1%

4.9%

4.3%

0.8 pp

0.2 pp

 GEL

8.1%

8.2%

7.9%

0.2 pp

-0.1 pp

 FC

1.1%

0.9%

0.8%

0.3 pp

0.2 pp

 UZS

25.0%

24.4%

26.9%

-1.9 pp

0.6 pp

Georgian financial services

4.5%

4.4%

3.9%

0.6 pp

0.1 pp

 GEL

8.1%

8.2%

7.9%

0.2 pp

-0.1 pp

 FC

1.1%

0.9%

0.8%

0.3 pp

0.2 pp

Uzbek business

24.9%

24.4%

26.9%

-2.0 pp

0.5 pp

    FC

3.8%

4.1%

0.0%

3.8 pp

-0.3 pp

UZS

25.0%

24.4%

26.9%

-1.9 pp

0.6 pp

Total deposit rates*

5.1%

4.9%

4.3%

0.8 pp

0.2 pp

* Total deposits rates include MOF deposits



 

Preliminary Unaudited Consolidated Financial Results Overview for FY 2023

This statement provides a summary of the business and financial trends for FY 2023 for TBC Bank Group plc and its subsidiaries. The financial information and trends are unaudited.

Total assets and total liabilities for 31-Dec-2022 were restated due to replacement of IFRS 4 with IFRS 17. For more details, please refer to appendix 8.

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

Net Interest Income

In FY 2023, net interest income amounted to GEL 1,635.8 million, up by 26.8% on a YoY basis.

The YoY rise in interest income by GEL 617.2 million, or 26.5%, was mostly attributable to an increase in interest income from loans related to a GEL 3,868.7 million, or 21.3%, increase in the respective portfolio, as well as a 1.0 pp rise in the respective yield.

YoY interest expense increased by GEL 271.5 million, or 26.1%, mainly related to an increase in the deposit portfolio of GEL 2,339.0 million, or 13.0%, and a 1.1 pp growth in deposit cost.

In FY 2023, our NIM stood at 6.7%, up by 0.7 pp on a YoY basis.

In thousands of GEL

FY'23

FY'22

Change YoY

Interest income

2,948,056

2,330,838

26.5%

Interest expense*

(1,312,258)

(1,040,786)

26.1%

Net interest income

1,635,798

1,290,052

26.8%


 

 


NIM

6.7%

6.0%

0.7 pp

* Interest expense includes net interest gains from currency swaps

 

Non-Interest Income

Total non-interest income amounted to GEL 737.7 million in FY 2023, decreasing by 5.5% YoY, primarily due to a normalisation of FX revenues, offset by significant growth in fee and commission income.

In 2023 our net fee and commission income increased by 27.8% on a YoY basis, related to increased payments transactions in both Georgia and Uzbekistan. Our Uzbek business contributed 18% of the Group's net fee and commission income.

In thousands of GEL

Non-interest income

FY'23

FY'22

Change YoY

Net fee and commission income

412,325

322,666

27.8%

Net gains from currency derivatives, foreign currency operations and translation

256,924

398,866

-35.6%

Net insurance income

31,290

29,203

7.1%

Other operating income

37,163

29,977

24.0%

Total non-interest income

737,702

780,712

-5.5%

 

Credit Loss Allowance

Credit loss allowance for loans in FY 2023 amounted to GEL 162.7 million, which translated into 0.8% cost of risk. The increase in credit loss allowance for loans was mainly driven by strong loan book growth as well as normalisation of CoR.

In thousands of GEL

FY'23

FY'22

Change YoY

Credit loss allowance for loans to customers

(162,659)

(118,943)

36.8%

Credit loss allowance for other transactions

(18,081)

(13,957)

29.5%

Total credit loss allowance

(180,740)

(132,900)

36.0%

Operating income after expected credit and non-financial asset impairment losses

2,192,760

1,937,864

13.2%


 



Cost of risk

0.8%

0.7%

0.1 pp

 

Operating Expenses

In FY 2023, our operating expenses rose by 24.2% on a YoY basis. This growth was mainly driven by overall business growth, both in Georgia and Uzbekistan.

In thousands of GEL

Operating expenses

FY'23

FY'22

Change YoY

Staff costs

(472,972)

(374,816)

26.2%

Allowance of provision for liabilities and charges

(155)

(2,200)

-93.0%

Depreciation and amortisation

(115,975)

(101,197)

14.6%

Administrative and other operating expenses

(269,825)

(213,107)

26.6%

Total operating expenses

(858,927)

(691,320)

24.2%

 



Cost to income

33.4%

2.8 pp

Georgian financial services' cost to income

28.9%

3.0 pp

 

Profit

In FY 2023, we delivered strong profitability and generated GEL 1,140.0 million in profit, up by 13.6% YoY, driven by strong core revenue growth and asset quality trends. Our Uzbek operations contributed GEL 59.3 million or 5% of the Group's 2023 profit.

 The YoY decrease in income tax expense is mainly driven by a one-off tax charge in 2022, due to changes in the Georgian taxation model.

As a result, our ROE and ROA for full year 2023 were 26.5% and 3.9%, respectively.

In thousands of GEL

FY'23

FY'22

Change YoY

Profit before tax

1,333,833

1,246,544

7.0%

Income tax expense

(193,858)

(243,205)

-20.3%

Profit for the period

1,139,975

1,003,339

13.6%

 



 

ROE

26.5%

27.0%

-0.5 pp

Georgian financial services' ROE

25.5%

26.0%

-0.5 pp

ROA

3.9%

3.8%

0.1 pp

Georgian financial services' ROA

4.0%

4.1%

-0.1 pp

 



 

Loan Portfolio

As of 31 December 2023, the gross loan portfolio reached GEL 22,073.7 million, up by 21.3% YoY or 21.2% on a constant currency basis.

By the end of December 2023, the Georgian financial services' loan portfolio increased by 19.2% on a YoY basis and reached GEL 21,257.7 million, with 18.6% growth on a constant currency basis. Over the same period, our Uzbek loan portfolio more than doubled, reaching GEL 796.9 million.

In thousands of GEL

Gross loans and advances to customers

Dec'23

Dec'22

Change YoY

Georgian financial services (Georgia FS)*

21,257,692

17,839,697

19.2%

Retail Georgia

7,513,229

6,753,242

11.3%

GEL

5,000,607

4,374,224

14.3%

FC

2,512,622

2,379,018

5.6%

CIB Georgia

8,283,723

6,301,961

31.4%

GEL

3,061,811

2,455,229

24.7%

FC

5,221,912

3,846,732

35.7%

MSME Georgia

5,480,822

4,803,986

14.1%

GEL

2,868,942

2,627,760

9.2%

FC

2,611,880

2,176,226

20.0%

Uzbekistan

796,930

347,695

NMF

UZS

796,930

347,695

NMF

Total gross loans and advances to customers**

22,073,679

18,204,971

21.3%

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


FY'23

FY'22

Change YoY

Loan yields

12.6%

11.6%

1.0 pp

GEL

14.9%

15.5%

-0.6 pp

FC

8.5%

7.0%

1.5 pp

UZS

42.3%

42.7%

-0.4 pp

Georgia FS

11.8%

11.2%

0.6 pp

GEL

14.9%

15.5%

-0.6 pp

FC

8.5%

7.0%

1.5 pp

Uzbekistan

42.3%

42.7%

-0.4 pp

UZS

42.3%

42.7%

-0.4 pp

Total loan yields*

12.6%

11.6%

1.0 pp

* Total loans yields include Azerbaijan

 

Loan Portfolio Quality

As of 31 December 2023, our asset quality metrics remained strong with NPL to gross loans at 2.0%, driven by strong portfolio performance in both Georgia and Uzbekistan. Over the same period our PAR 90 remained broadly stable for both Georgia and Uzbekistan.

Par 90

Dec'23

Dec'22

Change YoY

Georgia FS*

1.1%

1.2%

-0.1 pp

Retail Georgia

0.8%

1.2%

-0.4 pp

CIB Georgia

0.7%

0.4%

0.3 pp

MSME Georgia

2.2%

2.2%

0.0 pp

Uzbekistan

1.9%

2.0%

-0.1 pp

Total PAR 90**

1.1%

1.2%

-0.1 pp

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

 

In thousands of GEL
Non-performing Loans (NPL)

Dec'23

Dec'22

Change YoY

Georgia FS*

425,061

388,585

9.4%

Retail Georgia

127,102

146,167

-13.0%

CIB Georgia

114,130

80,307

42.1%

MSME Georgia

183,829

162,111

13.4%

Uzbekistan

15,006

6,794

120.9%

Total non-performing loans**

440,750

397,444

10.9%

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

 

NPL to gross loans

Dec'23

Dec'22

Change YoY

Georgia FS*

2.0%

2.2%

-0.2 pp

Retail Georgia

1.7%

2.2%

-0.5 pp

CIB Georgia

1.4%

1.3%

0.1 pp

MSME Georgia

3.4%

3.4%

0.0 pp

Uzbekistan

1.9%

2.0%

-0.1 pp

Total NPL to gross loans**

2.0%

2.2%

-0.2 pp

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

 

Dec'23

Dec'22

NPL Coverage 

Provision Coverage

Total Coverage***

Provision Coverage

Total Coverage***

Georgia FS*

73.4%

142.2%

91.0%

153.2%

Retail Georgia

120.4%

179.5%

146.6%

190.3%

CIB Georgia

46.9%

110.6%

57.9%

119.9%

MSME Georgia

57.5%

136.0%

57.3%

136.2%

Uzbekistan

222.3%

222.3%

184.0%

184.0%

Total NPL coverage**

79.8%

146.3%

93.7%

155.6%


* 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

In FY 2023, our cost of risk (CoR) was within the expected range at 0.8%.

The CoR for our Georgian financial services remained stable YoY and stood at 0.7%, while CoR for our Uzbek business amounted to 6.0%, down by 0.8 pp on YoY basis, driven by improved portfolio quality.

Cost of risk (CoR)

FY'23

FY'22

Change YoY

Georgia FS*

0.7%

0.6%

0.1 pp

Retail Georgia

0.8%

1.4%

-0.6 pp

CIB Georgia

0.1%

0.0%

0.1 pp

MSME Georgia

1.4%

0.5%

0.9 pp

Uzbekistan

6.0%

6.8%

-0.8 pp

Total cost of risk**

0.8%

0.7%

0.1 pp

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

 

Deposit Portfolio

The total deposit portfolio amounted to GEL 20,375.5 million as of end 2023, increasing by 13.0% YoY or 13.2% on a constant currency basis.

As of 31 December 2023, the Georgian financial services' portfolio increased by 11.8% on a YoY basis to GEL 19,900.3 million, with 11.7% growth on a constant currency basis. Over the same period, our Uzbek portfolio almost doubled and stood at GEL 581.5 million.

In thousands of GEL

Customer accounts

Dec'23

Dec'22

Change YoY

Georgia FS*

19,900,342

17,799,899

11.8%

Retail Georgia

7,469,587

6,536,649

14.3%

GEL

2,532,317

1,905,377

32.9%

FC

4,937,270

4,631,272

6.6%

CIB Georgia

10,200,321

9,249,232

10.3%

GEL

6,105,284

5,136,442

18.9%

FC

4,095,037

4,112,790

-0.4%

MSME Georgia

1,900,459

1,761,342

7.9%

GEL

1,052,675

908,024

15.9%

FC

847,784

853,318

-0.6%

MOF

515,079

412,442

24.9%

GEL

515,079

412,442

24.9%

Uzbekistan

581,483

330,976

75.7%

FC

1,864

1,160

60.7%

UZS

579,619

329,816

75.7%

Total customer accounts**

20,375,498

18,036,533

13.0%

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

 

FY'23

FY'22

Change YoY

 Deposit rates

5.0%

3.9%

1.1 pp

 GEL

8.3%

7.7%

0.6 pp

 FC

0.9%

0.9%

0.0 pp

 UZS

24.9%

24.1%

0.8 pp

Georgian financial services

4.5%

3.6%

0.9 pp

 GEL

8.4%

7.7%

0.7 pp

 FC

0.9%

0.9%

0.0 pp

Uzbek business

24.9%

24.1%

0.8 pp

    FC

4.2%

0.0%

4.2 pp

UZS

24.9%

24.1%

0.8 pp

Total deposit rates*

5.0%

3.9%

1.1 pp

* Total deposit rates include MOF deposits

Additional Disclosures

1)   TBC Bank - Background

TBC Bank Group PLC ("TBC PLC") is a public limited company registered in England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank") and a group of companies that principally operate in Georgia in the financial sector. TBC PLC also offers non-financial services via TNET, the largest digital ecosystem in Georgia. Since 2019, TBC PLC has expanded its operations into Uzbekistan by operating fast growing retail digital financial services in the country. TBC PLC is listed on the London Stock Exchange under the symbol TBCG and is a constituent of the FTSE 250 Index. It is also a member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap Index.

TBC Bank, together with its subsidiaries, is a leading universal banking group in Georgia, with a total market share of 39.3% of customer loans and 40.1% of customer deposits as of 31 December 2023, according to data published by the National Bank of Georgia on the analytical tool Tableau.

2)   Consolidated Financial Statements and Key Ratios 4Q 2023

Consolidated Statement of Financial Position

In thousands of GEL 

Dec'23

Sep'23

ASSETS



Cash and cash equivalents

3,764,087

2,648,469

Due from other banks

47,941

38,954

Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan

1,577,074

1,904,010

Loans and advances to customers

21,722,107

20,003,021

Investment securities measured at fair value through other comprehensive income

3,475,461

3,071,046

Bonds carried at amortised cost

73,963

65,289

Finance lease receivables

400,411

364,077

Investment properties

15,235

20,629

Investments in associates

4,204

3,940

Current income tax prepayment

435

16,062

Deferred income tax asset

7,400

10,721

Other financial assets

280,268

259,771

Other assets

431,477

449,322

Premises and equipment

513,340

481,867

Right of use assets

120,077

116,262

Intangible assets

471,383

442,989

Goodwill

59,964

59,964

TOTAL ASSETS

32,964,827

29,956,393

LIABILITIES     

 

 

Due to credit institutions

4,395,182

3,330,925

Customer accounts

20,375,498

18,722,415

Other financial liabilities

358,522

515,000

Current income tax liability

67,945

17,958

Deferred income tax liability

50,957

109,854

Debt Securities in issue

1,426,174

1,432,393

Provision for liabilities and charges

21,060

20,384

Other liabilities

123,218

93,184

Lease liabilities

91,879

88,893

Subordinated debt

868,730

788,116

Redemption liability

365,480

363,871

TOTAL LIABILITIES

28,144,645

25,482,993

EQUITY     

 

 

Share capital

1,690

1,682

Shares held by trust

(75,609)

(75,470)

Share premium

295,605

272,930

Retained earnings

4,433,496

4,145,795

Merger reserve

402,862

402,862

Share based payment reserve

23,677

12,672

Fair value reserve for investment securities measured at fair value through other comprehensive income

12,345

10,855

Cumulative currency translation reserve

(44,824)

(42,759)

Other reserve

(365,513)

(363,869)

Equity attributable to owners of the parent

4,683,729

4,364,698

Non-controlling interest

136,453

108,702

TOTAL EQUITY

4,820,182

4,473,400

TOTAL LIABILITIES AND EQUITY

32,964,827

29,956,393

 

Consolidated Income Statement and Other Comprehensive Income

In thousands of GEL 

4Q'23

3Q'23

4Q'22

Interest income

810,428

753,658

644,981

Interest expense

(368,693)

(325,724)

(287,535)

Net interest income

441,735

427,934

357,446

Fee and commission income

192,341

170,479

166,042

Fee and commission expense

(82,242)

(66,327)

(70,710)

Net fee and commission income

110,099

104,152

95,332

Insurance contract revenue

33,665

35,056

29,852

Reinsurance service result

1,161

(3,245)

(2,564)

Insurance service claims and expenses incurred

(25,736)

(22,013)

(19,070)

Net insurance income

9,090

9,798

8,218

Net gains from currency derivatives, foreign currency operations and translation

68,228

66,968

138,777

Net gains from disposal of investment securities measured at fair value through other comprehensive income

8

1,553

926

Other operating income

10,372

4,443

3,388

Share of profit of associates

(256)

371

145

Other operating non-interest income

78,352

73,335

143,236

Credit loss allowance for loans to customers

(40,640)

(42,595)

(27,002)

Credit loss recovery/(allowance) for finance lease receivable

1,129

(3,035)

558

Credit loss (allowance)/recovery for performance guarantees and credit related commitments

(612)

644

(1,217)

Credit loss allowance for other financial assets

(4,890)

(963)

(4,416)

Credit loss allowance for financial assets measured at fair value through other comprehensive income

(407)

(497)

(521)

Net (impairment)/recovery of non-financial assets

(2,059)

287

(456)

Operating income after expected credit and non-financial asset impairment losses

591,797

569,060

571,178

Staff costs

(139,766)

(121,056)

(103,764)

Depreciation and amortisation

(28,741)

(29,286)

(27,181)

Allowance of provision for liabilities and charges

-

(34)

(140)

Administrative and other operating expenses

(85,993)

(67,711)

(69,410)

Operating expenses

(254,500)

(218,087)

(200,495)

Profit before tax

337,297

350,973

370,683

Income tax expense

(45,856)

(50,485)

(146,909)

Profit for the period

291,441

300,488

223,774

Other comprehensive income, net of tax:




Items that may be reclassified subsequently to profit or loss:




Movement in fair value reserve, net of tax

1,491

(5,607)

12,147

Exchange differences on translation to presentation currency

(2,065)

(5,955)

(17,919)

Net other movements

(33)

-

-

Other comprehensive expense for the period, net of tax

(607)

(11,562)

(5,772)

Total comprehensive income for the period

290,834

288,926

218,002

Profit attributable to:




 - Shareholders of TBCG

287,699

299,022

217,756

 - Non-controlling interest

3,742

1,466

6,018

Profit for the period

291,441

300,488

223,774

Total comprehensive income is attributable to:




 - Shareholders of TBCG

287,092

287,460

211,984

 - Non-controlling interest

3,742

1,466

6,018

Total comprehensive income for the period

290,834

288,926

218,002

* Interest expense includes net interest gains from currency swaps

 

  Key Ratios 4Q'23

Average Balances

The average balances included in this document are calculated as the average of the relevant monthly balances as of the end of each month. Balances have been extracted from TBC's unaudited and consolidated management accounts, which were prepared from TBC's accounting records. These were used by the management for monitoring and control purposes.

Ratios (based on monthly averages, where applicable)

4Q'23

3Q'23

4Q'22

 




Profitability ratios:




ROE1

25.2%

27.6%

22.3%

ROA2

3.7%

4.1%

3.1%

Cost to income3

39.8%

35.4%

33.2%

NIM4

6.7%

6.9%

6.3%

Loan yields5

12.7%

12.6%

12.1%

Deposit rates6

5.1%

4.9%

4.3%

Cost of funding7

5.7%

5.4%

5.0%





Asset quality & portfolio concentration:




Cost of risk9

0.8%

0.9%

0.6%

PAR 90 to Gross Loans9

1.1%

1.2%

1.2%

NPLs to Gross Loans10

2.0%

2.0%

2.2%

NPL provision coverage11

79.8%

87.6%

93.7%

Total NPL coverage12

146.3%

151.6%

155.6%

Credit loss level to Gross Loans13

1.6%

1.8%

2.0%

Related Party Loans to Gross Loans14

0.1%

0.1%

0.1%

Top 10 Borrowers to Total Portfolio15

6.1%

6.0%

5.3%

Top 20 Borrowers to Total Portfolio16

9.1%

8.9%

8.3%





Capital & liquidity positions:




Net Loans to Deposits plus IFI Funding17

96.1%

96.9%

88.5%

Net Stable Funding Ratio18

119.9%

124.1%

n/a

Liquidity Coverage Ratio19

115.3%

114.1%

n/a

Leverage20

 6.8x

 6.7x

 7.3x

CET 1 CAR (Basel III)21

17.4%

17.5%

n/a

Tier 1 CAR (Basel III)22

19.6%

19.9%

n/a

Total 1 CAR (Basel III)23

22.1%

22.3%

n/a


For the ratio definitions and exchange rates, please refer to appendix 12.

 

3)   Consolidated Financial Statements and Key Ratios FY 2023

Consolidated Statement of Financial Position

In thousands of GEL 

Dec'23

Dec'22

ASSETS



Cash and cash equivalents

3,764,087

3,860,813

Due from other banks

47,941

41,854

Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan

1,577,074

2,049,985

Loans and advances to customers

21,722,107

17,832,606

Investment securities measured at fair value through other comprehensive income

3,475,461

2,885,088

Bonds carried at amortised cost

73,963

37,392

Repurchase receivables

-

267,495

Finance lease receivables

400,411

312,334

Investment properties

15,235

22,154

Investments in associates

4,204

3,721

Current income tax prepayment

435

430

Deferred income tax asset

7,400

16,705

Other financial assets

280,268

235,963

Other assets

431,477

422,928

Premises and equipment

513,340

442,886

Right of use assets

120,077

112,625

Intangible assets

471,383

383,198

Goodwill

59,964

59,964

TOTAL ASSETS

32,964,827

28,988,141

LIABILITIES

 


Due to credit institutions

4,395,182

3,940,660

Customer accounts

20,375,498

18,036,533

Other financial liabilities

358,522

294,546

Current income tax liability

67,945

1,647

Deferred income tax liability

50,957

112,877

Debt Securities in issue

1,426,174

1,361,573

Provision for liabilities and charges

21,060

19,908

Other liabilities

123,218

101,736

Lease liabilities

91,879

84,770

Subordinated debt

868,730

590,148

Redemption liability

365,480

477,329

TOTAL LIABILITIES

28,144,645

25,021,727

EQUITY

 


Share capital

1,690

1,681

Shares held by trust

(75,609)

(7,900)

Treasury shares

-

(25,541)

Share premium

295,605

269,938

Retained earnings

4,433,496

3,745,191

Merger reserve

402,862

402,862

Share based payment reserve

23,677

1,090

Fair value reserve for investment securities measured at fair value through other comprehensive income

12,345

5,467

Cumulative currency translation reserve

(44,824)

(35,858)

Other reserves

(365,513)

(477,329)

Equity attributable to owners of the parent

4,683,729

3,879,601

Non-controlling interest

136,453

86,813

TOTAL EQUITY

4,820,182

3,966,414

TOTAL LIABILITIES AND EQUITY

32,964,827

28,988,141

 

 

Consolidated Income Statement and Other Comprehensive Income

In thousands of GEL 

FY'23

FY'22

Interest income

2,948,056

2,330,838

Interest expense*

(1,312,258)

(1,040,786)

Net interest income

1,635,798

1,290,052

Fee and commission income

676,350

543,099

Fee and commission expense

(264,025)

(220,433)

Net fee and commission income

412,325

322,666

Insurance contract revenue

129,798

111,597

Reinsurance service result

(6,470)

(7,783)

Insurance service claims and expenses incurred

(92,038)

(74,611)

Net insurance income

31,290

29,203

Net gains from currency derivatives, foreign currency operations and translation

256,924

398,866

Net gains from disposal of investment securities measured at fair value through other comprehensive income

5,880

5,811

Other operating income

30,626

23,814

Share of profit of associates

657

352

Other operating non-interest income

294,087

428,843

Credit loss allowance for loans to customers

(162,659)

(118,943)

Credit loss allowance for finance lease receivable

(4,038)

(720)

Credit loss allowance for performance guarantees and credit related commitments

(904)

(2,721)

Credit loss allowance for other financial assets

(9,943)

(10,155)

Credit loss (allowance)/recovery for financial assets measured at fair value through other comprehensive income

(1,066)

862

Net impairment of non-financial assets

(2,130)

(1,223)

Operating income after expected credit and non-financial asset impairment losses

2,192,760

1,937,864

Staff costs

(472,972)

(374,816)

Depreciation and amortisation

(115,975)

(101,197)

Allowance of provision for liabilities and charges

(155)

(2,200)

Administrative and other operating expenses

(269,825)

(213,107)

Operating expenses

(858,927)

(691,320)

Profit before tax

1,333,833

1,246,544

Income tax expense

(193,858)

(243,205)

Profit for the period

1,139,975

1,003,339

Other comprehensive income, net of tax:



Items that may be reclassified subsequently to profit or loss:



Movement in fair value reserve, net of tax

6,878

16,329

Exchange differences on translation to presentation currency

(8,966)

(26,355)

Net other movements

(33)

-

Other comprehensive expense for the period, net of tax

(2,121)

(10,026)

Total comprehensive income for the period

1,137,854

993,313

Profit attributable to:



 - Shareholders of TBCG

1,124,180

995,206

 - Non-controlling interest

15,795

8,133

Profit for the period

1,139,975

1,003,339

Total comprehensive income is attributable to:



 - Shareholders of TBCG

1,122,059

985,180

 - Non-controlling interest

15,795

8,133

Total comprehensive income for the period

1,137,854

993,313

* Interest expense includes net interest gains from currency swaps

 

 

 

Key Ratios FY'23

Average Balances

The average balances included in this document are calculated as the average of the relevant monthly balances as of the end of each month. Balances have been extracted from TBC's unaudited and consolidated management accounts, which were prepared from TBC's accounting records. These were used by the management for monitoring and control purposes.

Ratios (based on monthly averages, where applicable)

FY'23

FY'22

 



Profitability ratios:

 


ROE1

26.5%

27.0%

ROA2

3.9%

3.8%

Cost to income3

36.2%

33.4%

NIM4

6.7%

6.0%

Loan yields5

12.6%

11.6%

Deposit rates6

5.0%

3.9%

Cost of funding7

5.6%

4.9%




Asset quality & portfolio concentration:

 


Cost of risk9

0.8%

0.7%

PAR 90 to Gross Loans9

1.1%

1.2%

NPLs to Gross Loans10

2.0%

2.2%

NPL provision coverage11

79.8%

93.7%

Total NPL coverage12

146.3%

155.6%

Credit loss level to Gross Loans13

1.6%

2.0%

Related Party Loans to Gross Loans14

0.1%

0.1%

Top 10 Borrowers to Total Portfolio15

6.1%

5.3%

Top 20 Borrowers to Total Portfolio16

9.1%

8.3%




Capital & liquidity positions:

 


Net Loans to Deposits plus IFI Funding17

96.1%

88.5%

Net Stable Funding Ratio18

119.9%

n/a

Liquidity Coverage Ratio19

115.3%

n/a

Leverage20

 6.8x

 7.3x

CET 1 CAR (Basel III)21

17.4%

n/a

Tier 1 CAR (Basel III)22

19.6%

n/a

Total 1 CAR (Basel III)23

22.1%

n/a

 

For the ratio definitions and exchange rates, please refer to appendix 12.

 

4)   Business Line Definition

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

Georgian financial services 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:

 

·      Corporate and investment banking (CIB) - a legal entity/group of affiliated entities with an annual revenue exceeding GEL 20.0 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 sub-segment or transferred to the MSME sub-segment on a discretionary basis. In addition, CIB includes Wealth Management (WM) private banking services to high-net-worth individuals with a threshold of US$ 250,000 in assets under management (AUM), as well as on a discretionary basis;

·      Retail - non-business individual customers;

·      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.

 

5)   Financial Disclosures by Business Lines

Consolidated Statement of Financial Position Dec'23

In thousands of GEL 

Georgia FS

Uzbekistan*

Payme

TBC UZ

Other**

Group

ASSETS

 

 



 


Cash and cash equivalents

3,687,618

81,171

1,544

79,735

(4,702)

3,764,087

Due from other banks

47,867

1,344

6,929

1,344

(1,270)

47,941

Mandatory cash balances with National Bank of Georgia and the Central Bank of Uzbekistan

1,572,506

4,568

-

4,568

-

1,577,074

Loans and advances to customers

20,945,584

763,575

-

763,575

12,948

21,722,107

Investment securities measured at fair value through other comprehensive income

3,475,461

-

-

-

-

3,475,461

Bonds carried at amortised cost

12,271

61,692

-

61,692

-

73,963

Finance lease receivables

363,303

29,616

-

29,616

7,492

400,411

Investment properties

15,235

-

-

-

-

15,235

Investments in associates

18,817

-

-

-

(14,613)

4,204

Current income tax prepayment

16

-

-

-

419

435

Deferred income tax asset

-

7,005

-

7,005

395

7,400

Other financial assets

286,431

11,930

5,411

7,573

(18,093)

280,268

Other assets

411,050

16,454

5,127

11,327

3,973

431,477

Premises and equipment

491,943

15,741

5,860

9,881

5,656

513,340

Right of use assets

112,613

5,576

1,315

4,261

1,888

120,077

Intangible assets

359,476

31,335

5,648

25,687

80,572

471,383

Goodwill

28,197

1,912

-

1,912

29,855

59,964

TOTAL ASSETS

31,828,388

1,031,919

31,834

1,008,176

104,520

32,964,827

LIABILITIES     

 




 

 

Due to credit institutions

4,337,726

105,293

-

105,293

(47,837)

4,395,182

Customer accounts

19,900,341

581,483

-

588,520

(106,326)

20,375,498

Other financial liabilities

328,285

21,617

1,824

19,793

8,620

358,522

Current income tax liability

67,800

-

-

-

145

67,945

Deferred income tax liability

50,932

-

-

-

25

50,957

Debt Securities in issue

1,257,347

-

-

-

168,827

1,426,174

Provision for liabilities and charges

21,060

-

-

-

-

21,060

Other liabilities

101,907

8,726

2,190

7,590

12,585

123,218

Lease liabilities

83,891

6,491

1,491

5,000

1,497

91,879

Subordinated debt

868,730

-

-

-

-

868,730

Redemption liability

-

-

-

-

365,480

365,480

TOTAL LIABILITIES

27,018,019

723,610

5,505

726,196

403,016

28,144,645

EQUITY     

 




 

 

Share capital

29,148

330,622

1,254

329,368

(358,080)

1,690

Shares held by trust

-

-

-

-

(75,609)

(75,609)

Share premium

521,190

35,723

-

35,723

(261,308)

295,605

Retained earnings

4,324,043

(22,146)

30,077

(52,223)

131,599

4,433,496

Merger reserve

-

67

67

-

402,795

402,862

Share based payment reserve

(76,554)

-

-

-

100,231

23,677

Fair value reserve for investment securities measured at fair value through other comprehensive income

12,345

-

-

-

-

12,345

Cumulative currency translation reserve

-

(35,924)

(5,069)

(30,855)

(8,900)

(44,824)

Other reserves

-

(33)

-

(33)

(365,480)

(365,513)

Equity attributable to owners of the parent

4,810,172

308,309

26,329

281,980

(434,752)

4,683,729

Non-controlling interest

197

-

-

-

136,256

136,453

TOTAL EQUITY

4,810,369

308,309

26,329

281,980

(298,496)

4,820,182

TOTAL LIABILITIES AND EQUITY

31,828,388

1,031,919

31,834

1,008,176

104,520

32,964,827

* Includes intra-group eliminations

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


 

Consolidated Income Statement and Other Comprehensive Income 4Q'23

In thousands of GEL 

Georgia FS

Uzbekistan**

Payme

TBC UZ

Other

***

 Group

Interest income

726,956

81,460

200

81,454

2,012

810,428

Interest expense*

(331,535)

(37,905)

(87)

(38,012)

747

(368,693)

Net interest income

395,421

43,555

113

43,442

2,759

441,735

Fee and commission income

160,918

30,768

21,300

21,276

655

192,341

Fee and commission expense

(72,030)

(10,100)

(2,051)

(19,779)

(112)

(82,242)

Net fee and commission income

88,888

20,668

19,249

1,497

543

110,099

Net insurance income

8,858

-

-

-

232

9,090

Net gains/(losses) from currency derivatives, foreign currency operations and translation

71,186

(330)

(9)

(321)

(2,628)

68,228

Net gains from disposal of investment securities measured at fair value through other comprehensive income

8

-

-

-

-

8

Other operating income

8,398

1,160

1,095

65

814

10,372

Share of loss of associates

(256)

-

-

-

-

(256)

Other operating non-interest income

88,194

830

1,086

(256)

(1,582)

87,442

Credit loss (allowance)/recovery for loans to customers

(32,107)

(8,703)

-

(8,703)

170

(40,640)

Credit loss recovery/(allowance) for finance lease receivable

1,551

(546)

-

(546)

124

1,129

Credit loss allowance for performance guarantees and credit related commitments

(611)

-

-

-

(1)

(612)

Credit loss (allowance)/recovery for other financial assets

(4,694)

(196)

(115)

(81)

-

(4,890)

Credit loss allowance for financial assets measured at fair value through other comprehensive income

(339)

(68)

-

(68)

-

(407)

Net (recovery)/allowance of non-financial assets

(2,360)

-

-

-

301

(2,059)

Operating income after expected credit and non-financial asset impairment losses

533,943

55,540

20,333

35,285

2,314

591,797

Staff costs

(115,887)

(11,215)

(2,645)

(8,570)

(12,664)

(139,766)

Depreciation and amortisation

(27,109)

(2,489)

(379)

(2,110)

857

(28,741)

Administrative and other operating expenses

(59,497)

(18,476)

(5,256)

(13,298)

(8,020)

(85,993)

Operating expenses

(202,493)

(32,180)

(8,280)

(23,978)

(19,827)

(254,500)

Profit before tax

331,450

23,360

12,053

11,307

(17,513)

337,297

Income tax expense

(42,835)

(2,927)

(30)

(2,897)

(94)

(45,856)

Profit for the period

288,615

20,433

12,023

8,410

(17,607)

291,441

Profit attributable to:



 

 



 - Shareholders of TBCG

288,614

20,433

12,023

8,410

(21,348)

287,699

 - Non-controlling interest

1

-

-

-

3,741

3,742

Profit for the period

288,615

20,433

12,023

8,410

(17,607)

291,441

* Interest expense includes net interest gains from currency swaps

** Includes intra-group eliminations

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

 

 

Consolidated Income Statement and Other Comprehensive Income FY'23

In thousands of GEL 

Georgia FS

Uzbekistan**

Payme

TBC UZ

Other

***

Group

Interest income

2,687,756

253,264

288

253,258

7,036

2,948,056

Interest expense*

(1,189,267)

(120,650)

(337)

(120,596)

(2,341)

(1,312,258)

Net interest income

1,498,489

132,614

(49)

132,662

4,695

1,635,798

Fee and commission income

571,311

101,241

76,631

60,596

3,798

676,350

Fee and commission expense

(236,621)

(27,112)

(6,958)

(56,043)

(292)

(264,025)

Net fee and commission income

334,690

74,129

69,673

4,553

3,506

412,325

Net insurance income

31,557

-

-

-

(267)

31,290

Net gains from currency derivatives, foreign currency operations and translation

273,443

(191)

-

(191)

(16,328)

256,924

Net gains from disposal of investment securities measured at fair value through other comprehensive income

5,880

-

-

-

-

5,880

Other operating income

22,804

1,228

1,096

132

6,594

30,626

Share of profit of associates

657

-

-

-

-

657

Other operating non-interest income

334,341

1,037

1,096

(59)

(10,001)

325,377

Credit loss (allowance)/recovery for loans to customers

(131,532)

(32,279)

-

(32,279)

1,152

(162,659)

Credit loss (allowance)/recovery for finance lease receivable

(2,167)

(2,042)

-

(2,042)

171

(4,038)

Credit loss allowance for performance guarantees and credit related commitments

(903)

-

-

-

(1)

(904)

Credit loss allowance for other financial assets

(9,390)

(553)

(381)

(172)

-

(9,943)

Credit loss allowance for financial assets measured at fair value through other comprehensive income

(998)

(68)

-

(68)

-

(1,066)

Net impairment of non-financial assets

(2,140)

-

-

-

10

(2,130)

Operating income after expected credit and non-financial asset impairment losses

2,020,390

172,838

70,339

102,595

(468)

2,192,760

Staff costs

(395,003)

(39,562)

(9,918)

(29,644)

(38,407)

(472,972)

Depreciation and amortisation

(102,479)

(8,974)

(1,161)

(7,813)

(4,522)

(115,975)

Allowance of provision for liabilities and charges

(155)

-

-

-

-

(155)

Administrative and other operating expenses

(194,844)

(59,230)

(14,377)

(44,949)

(15,751)

(269,825)

Operating expenses

(692,481)

(107,766)

(25,456)

(82,406)

(58,680)

(858,927)

Profit before tax

1,327,909

65,072

44,883

20,189

(59,148)

1,333,833

Income tax expense

(187,968)

(5,743)

(43)

(5,700)

(147)

(193,858)

Profit for the period

1,139,941

59,329

44,840

14,489

(59,295)

1,139,975

Profit attributable to:



 

 



 - Shareholders of TBCG

1,139,908

59,329

44,840

14,489

(75,057)

1,124,180

 - Non-controlling interest

33

-

-

-

15,762

15,795

Profit for the period

1,139,941

59,329

44,840

14,489

(59,295)

1,139,975

* Interest expense includes net interest gains from currency swaps

** Includes intra-group eliminations

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

 

 

 

Consolidated Key Ratios by Business Lines

4Q'23

Georgia FS

Uzbekistan

Group

Profitability ratios:

 



ROE1

24.7%

29.7%

25.2%

ROA2

3.8%

8.7%

3.7%

Cost to income3

35.4%

49.5%

39.8%

NIM4

6.2%

22.6%

6.7%

Loan yields5

11.7%

41.7%

12.7%

Deposit rates6

4.5%

24.9%

5.1%

Cost of funding7

5.3%

24.0%

5.7%





Asset quality & portfolio concentration:

 



Cost of risk8

0.6%

4.9%

0.8%

PAR 90 to Gross Loans9

1.1%

1.9%

1.1%

NPLs to Gross Loans10

2.0%

1.9%

2.0%

NPL provision coverage11

73.4%

222.3%

79.8%

Total NPL coverage12

142.2%

222.3%

146.3%

 

FY'23

Georgia FS

Uzbekistan

Group

Profitability ratios:

 



ROE1

25.5%

26.0%

26.50%

ROA2

4.0%

7.9%

3.9%

Cost to income3

31.9%

51.9%

36.2%

NIM4

6.3%

22.4%

6.7%

Loan yields5

11.8%

42.3%

12.6%

Deposit rates6

4.5%

24.9%

5.0%

Cost of funding7

5.2%

24.2%

5.6%





Asset quality & portfolio concentration:

 



Cost of risk8

0.7%

6.0%

0.8%

PAR 90 to Gross Loans9

1.1%

1.9%

1.1%

NPLs to Gross Loans10

2.0%

1.9%

2.0%

NPL provision coverage11

73.4%

222.3%

79.8%

Total NPL coverage12

142.2%

222.3%

146.3%

 

For the ratio definitions and exchange rates, please refer to appendix 12.

 

 

6)   Market shares[8] in Georgia

Market shares

Dec'23

Sep'23

Dec'22

Change YoY

Change QoQ

Total loans

39.3%

39.1%

39.5%

-0.2 pp

0.2 pp

Individual loans

38.1%

38.0%

38.3%

-0.2 pp

0.1 pp

Legal entities loans

40.7%

40.5%

40.9%

-0.2 pp

0.2 pp

Total deposits

40.1%

37.5%

40.3%

-0.2 pp

2.6 pp

Individual deposits

36.0%

36.6%

38.1%

-2.1 pp

-0.6 pp

Legal entities deposits

44.9%

38.5%

42.9%

 2.0 pp

 6.4 pp

 

 

 

7)   Subsidiaries of TBC Bank Group PLC[9] 


Ownership / voting

Country

Year of incorporation

Industry



Subsidiary

% as of
31-Dec 2023



JSC TBC Bank

99.9%

1992

Banking


United Financial Corporation JSC

99.5%

2001

Card processing


TBC Capital LLC

100.0%

1999

Brokerage


TBC Leasing JSC

100.0%

2003

Leasing


TBC Kredit LLC

100.0%

1999

Non-banking credit institution


TBC Pay LLC

100.0%

2008

Payment Processing


TBC Invest LLC

100.0%

2011

Financial services


TBC Asset management LLC

100.0%

2021

Asset Management


JSC TBC Insurance

100.0%

2014

Insurance


Redmed LLC

100.0%

2019

Healthcare E-commerce


T NET LLC

100.0%

2019

Ecosystem


    Index LLC

100.0%

2009

Ecosystem


    TKT UZ

100.0%

2019

Retail Trade


Artarea.ge LLC

100.0%

2012

PR and marketing


Marjanishvili 7 LLC

100.0%

2020

Customer experience servicing


Space JSC

100.0%

2021

Software Services


 Space International JSC

100.0%

2021

Digital banking platform


TBC Group Support LLC

100.0%

2020

Group risk and knowledge centre


Inspired LLC (Payme)*

100.0%

2011

Payment Processing


TBC Bank JSC UZ

60.2%

2020

Banking


    TBC Fin Service LLC

100.0%

2019

Retail Leasing


TBC International Holdings Limited**

100.0%

2023

Financial services


    Tpay LLC

100.0%

Georgia

2023

Financial services


* In May 2023 TBC Bank Group PLC finalized acquisition of remaining 49% interest in Inspired LLC

** TBC International Holdings Limited and Tpay LLC were established in 2023.

 

8)   Replacement of IFRS 4 with IFRS 17

The adoption of IFRS 17 has affected the financial reporting processes and procedures of the Group, as applications of the core principles outlined above has required additional information to be gathered and processed, as well as additional judgements to be made by the management. To ensure the smooth and timely adoption of IFRS 17, the Group launched a separate implementation project. After the transition to IFRS 17, the Group used a premium allocation approach for its insurance subsidiary for the following insurance contracts: motor insurance, border MTPL, property insurance, agro (crop) insurance, health-related insurance liability and other insurance with product classification of insurance contract and measurement model of premium allocation approach.

The Group has applied this approach retrospectively to all of its portfolios of insurance contracts.

9)   Legal and regulatory matters

When determining the level of provision to be set up with regards to such matters, or the amount (not subject to provisioning) to be disclosed in the financial statements, the management seeks both internal and external professional advice. The management believes that the provision recorded in these 4Q and full year 2023 results report is adequate and the amount (not subject to provisioning) need not be disclosed as it will not have a material adverse effect on the financial condition or the results of future operations of the Group.

 

10) Loan Book Breakdown by Stages According IFRS 9

In millions of GEL
Total loans*

Dec'23

Sep'23

Dec'22

Stage

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

1

20,337

105

18,674

98

16,395

107

2

1,320

88

1,305

102

1,413

99

3

417

159

386

162

397

166

Total

22,074

352

20,365

362

18,205

372

 







Georgia FS Retail

Dec'23

Sep'23

Dec'22

Stage

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

1

6,853

45

6,438

46

5,987

56

2

553

44

584

61

625

71

3

107

64

110

68

141

87

Total

7,513

153

7,132

175

6,753

214

 







Georgia FS CIB

Dec'23

Sep'23

Dec'22

Stage

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

1

7,760

19

6,960

18

5,761

19

2

410

2

330

1

458

1

3

114

33

95

31

83

26

Total

8,284

54

7,385

50

6,302

46

 







Georgia FS MSME

Dec'23

Sep'23

Dec'22

Stage

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

1

4,981

24

4,680

23

4,324

24

2

321

31

358

31

318

24

3

179

50

166

51

162

45

Total

5,481

105

5,204

105

4,804

93

 







Uzbekistan

Dec'23

Sep'23

Dec'22

Stage

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

Gross loans

Loan loss provisions

1

755

17

593

10

329

6

2

26

6

25

6

11

2

3

16

10

14

11

8

5

Total

797

33

632

27

348

13

* Total loans include Azerbaijan loan portfolio and intra-group eliminations

 

11) Glossary

Terminology

Definition

BVPS

Book value per share.

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.

 

12) 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. 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.

19. 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.

20. Leverage equals total assets to total equity.

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.

Exchange Rates

To calculate the QoQ growth of the Balance Sheet items without the currency exchange rate effect, we used the US$/GEL exchange rate of 2.6783 as of 30 September 2023. To calculate the YoY growth without the currency exchange rate effect, we used the US$/GEL exchange rate of 2.7020 as of 31 December 2022. As of 31 December 2023, the US$/GEL exchange rate equalled 2.6894. For P&L items growth calculations without the currency effect, we used the average US$/GEL exchange rate for the following periods: 4Q 2023 of 2.6943, 3Q 2023 of 2.6215, 4Q 2022 of 2.7339, FY 2023 of 2.6280, FY 2022 of 2.9156.



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

[2] Based on data published by the Central Bank of Uzbekistan.

[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 Uzstat.

[7] Based on data published by Central Bank of Uzbekistan.

[8] Based on data published by National Bank of Georgia on the analytical tool Tableau.

[9] TBC Bank Group PLC became the parent company of JSC TBC Bank on 10 August 2016.

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